Never run out of retirement income.
What you'll get from this article
- A 104-year-old retiree serves as a triumph and cautionary tale. Everyone—employers, advisors and employees—must consider longer lifespans when planning for retirements.
- Many Americans underestimate how long they’ll live, jeopardizing how much money they’ll have in retirement. Adding fixed annuities to retirement plan lineups are one way to ensure lifelong income.
- Retirement is now a significant life stage, often a full third of life. Employee benefits need to encompass spending plans, wellness programs and long-term care.
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Dr. Gerald Meyer’s longevity story is an amazing triumph. It’s also a cautionary tale.
Meyer’s story is a triumph for one obvious reason: He’s alive and
He’s hardly slowed down since. If anything, he’s busier than most folks.
Meyer spent 30 of his retirement years serving as president of a company developing green coal processing technologies.
In his mid-80s, he rode his Harley Davidson halfway across Alaska to present a paper at an American Chemical Society meeting in Fairbanks.1 An avid runner, Meyer competed for years in the National Senior Games, most recently running the 50 meters in the Wyoming regionals last June.2
A chart says that your lifetime is supposed to be so and so. I am way beyond that.
- Dr. Gerald Meyer
So why is Meyer’s story also a cautionary tale? It’s a reminder that retirement savers must account for potentially longer-than-expected lifespans, in terms of both money saved and time spent. As of the end of 2023, Meyer was one of 1,479 TIAA participants aged 100 or older (which means about 1.5% of all American centenarians are TIAA clients).3
Not everyone will make it to 100, of course, but living to age 90 and beyond is no longer a rarity. Many of the luminaries we lost at the end of 2023—Henry Kissinger, Charlie Munger, Roslyn Carter, Sandra Day O’Connor—lived well into their 90s.
According to the TIAA Institute, 30% of men and 40% of women aged 65 today are likely to live to at least age 90, and the likelihood is even higher for the educated and affluent. Yet few Americans understand the amount of retirement years they should be planning for, a notion known as
What longevity illiteracy costs us
Poor longevity literacy proves costly in two ways. The obvious one is financial. According to the Employee Benefits Research Institute, more than 40% of U.S. households are expected to
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When Meyer retired at age 70, he wasn’t planning on 34 years of retirement. He’s been a client of TIAA since his 30s and began receiving monthly annuity payments after turning 67. “I’m ahead of the game,” says Meyer, who acknowledged having little investment expertise when he opened his account.
“Having a dependable annuity, I think, as the basis of your retirement is essential,” he says. “You continue to receive the money as long as you’re alive.”
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The consequences of poor longevity literacy extend beyond finances. According to Dr. Joseph Coughlin, director of the Massachusetts Institute of Technology’s AgeLab, too much of today’s planning is built around an outdated vision of retirement—a vision that’s essentially the polar opposite of what makes Gerald Meyer’s retirement so inspiring.
“What we call retirement today is not a brief trip to Disney and a few beach walks with the grandchildren,” Coughlin says in an interview with Surya Kolluri, head of the TIAA Institute. “It’s actually one-third of your adult life. It’s an entire life stage.”
What we call retirement today ... [is] actually one-third of your adult life. It’s an entire life stage.
- Dr. Joseph Coughlin
Rethink retirement
Greater longevity puts different demands on anyone advising employers on their employee retirement plans, Coughlin says. Advisors need to think not only about plans for saving and investing but about
“Wealth advisors and financial investment advisors now need to look across the lifespan. I call it whole engagement,” says Coughlin. The lessons for financial advisors working with individual clients also apply to employers.
“People want to talk about their portfolio for about 10 minutes, and then they want to talk about their well-being and who’s going to take care of them [when they get older]. If you have those conversations about how they’re going to spend the money, you’ll be amazed at how deep and emotional and empathetic you will be seen, and how the client will be more engaged with you than ever.”
Do you know the role annuities can play in financially secure retirements? Learn more
Employers need to think more creatively, beyond people’s financial lives. In his 2017 book, “The Longevity Economy,” Coughlin writes about the challenge companies face when it comes to retaining older workers.
Older workers tend to be more productive, which is why employers tend to prefer they retire later rather than sooner. A big reason some people opt for early retirement, according to Coughlin, is because their employers didn’t offer proper accommodations and incentives to stay.
Creative new retirement trends
Coughlin tells the story of how BMW retained more of its older workforce by making minor changes in factory design. BMW added low-impact wood flooring in lieu of concrete, provided ergonomic benches and chairs and instituted rotating work assignments, all in order to reduce repetitive-stress injuries.
The result? Absenteeism fell, the defect rate fell even more and productivity improved 7%.
Some workers just want a more gradual off-ramp. Executive search firm Korn Ferry has suggested some employers adopt a so-called “legacy track” for older employees who still want to contribute but may not want to work full-time.6 Coughlin endorses the idea but noted it requires flexibility from workers, too.
“Employers do need to think more creatively about sliding people into different positions and about offering flexibility,” says Coughlin. “We see universities trying to do that with emeritus professors, who still have an office and privileges and still sit on committees. We see some employers like IBM, Procter & Gamble and GSK that have created pools of experts from their retiree population.
“At the same time, we also need to ensure our employees realize that just because they have 35 years on the job, it does not mean they keep the same pay grade if they change roles or change tracks.”
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Testimonials have been provided by current clients, and no direct or indirect compensation was given in return. No material conflicts of interest exist on the part of the individual(s) giving the testimonial, resulting from their relationship with the adviser. Results experienced by individuals may not be representative of the experience of other clients, and there is no guarantee of future performance or success.
1 “Sustained by Science,” Chemical and Engineering Science, volume 93, issue 29, July 20, 2015.
2 “103-year-old runner shares his tips for living a long life,” Today.com, July 10, 2023.
3 TIAA Analytics, December 31, 2023.
4 An unrecognized barrier to retirement income security: Poor Longevitylongevity literacy. TIAA Institute and the Global Financial Literacy Excellence Center, August 2023.
5 Retirement Savings Shortfalls: Evidence from EBRI’s 2019 Retirement Security Projection Model, 2019.
6 “Staying on: Why workers aren’t retiring,” Korn Ferry, April 25, 2023.
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This material is for informational or educational purposes only and is not fiduciary investment advice, or securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.
TIAA Institute is a division of Teachers Insurance and Annuity Association of America (TIAA), New York, NY.