Retirees are underestimating how long they will live

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2 years ago

July 3, 2023

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A significant share of older Americans underestimate how long their retirement is going to last: i.e., how long they are going to live.

Most people know that the average American lives to an age between 75 and 80. Less well known, apparently, is that life expectancy rises with age. At age 60, an American man can expect to reach 82; a woman, 85.

That knowledge is called longevity literacy, and many of us don’t have it. In a 2022 survey by the insurer TIAA, one-quarter of Americans underestimated the life expectancy of a 60-year-old. Another 28 percent said they didn’t know it.

Even among baby boomers, the youngest of whom are nearing 60, more than two-fifths of survey respondents either guessed low on longevity or punted on the question.

“We were kind of shocked to get the data,” said Surya Kolluri, the head of TIAA Institute, which produced the report.

Kolluri said he was particularly dismayed over the large share of respondents who could not answer the longevity question, which was multiple choice.

“We gave them the answer and they still said, ‘Eh, I don’t know,’” he said.

Confusion over human lifespan complicates the business of planning for retirement, a phase of life for which many Americans are already underprepared.

More than two-fifths of baby boomers have no retirement savings, even as the postwar generation enters retirement years, census data show.

The median boomer household held $134,000 in retirement savings in 2019, according to a NerdWallet analysis.

By most accounts, even that figure is not nearly enough. Human longevity doesn’t stop rising at 60. An American who retires at 65 can expect to live to 85, according to Social Security projections.

“We don’t know why people are so off in their expectations,” said Gal Wettstein, a senior research economist at Boston College. “I think there is some evidence that people don’t account for the fact that they’ve already lived to a certain age when they try to guess how long they might live.”

The biggest financial risk facing retirees is “outliving your savings,” Wettstein said, citing research from the school’s Center for Retirement Research.

That fact, too, is lost on many Americans. People approaching retirement wrongly assume that stock market volatility is their biggest financial peril, Wettstein said. In fact, the far greater risk is “living so long that your money runs out.”

Increasing lifespans ranks as one of the great human advances of the past century. An American born in 1900 could expect to reach 47. By 1950, life expectancy had risen to 68. U.S. lifespan peaked at 79 in 2019, then dropped during the COVID-19 pandemic.

The longevity bonus has become more pronounced over time, as we outlive various perils that killed our forebears. A Stanford researcher examined people who live past 65 in developed countries and found that human lifespans increase by three years with every generation.

But such nuances are lost on many people outside the scholarly community.

Researchers at the Employee Benefit Research Institute have repeatedly surveyed Americans of all ages about longevity and found consistent befuddlement.

“One of the consistent things is that there were 20 percent of people who don’t know, who couldn’t give an answer,” said Craig Copeland, director of wealth benefits research at the institute. “So, you’re starting out with one-fifth of people with no idea of how long they were going to live.”

Retirees fared somewhat better on survey questions about longevity. In 2022, Copeland said, more than half of retired persons demonstrated knowledge that an American at 65 can expect to live 20 more years. Even in this group, however, one-fifth of respondents didn’t answer the question.

Boston College researchers have found that many working-age Americans are “pessimistic about how long they are going to live,” and underestimate their own expected longevity, Wettstein said.

Even people in their 50s and 60s “tend to think they’re not going to live very long, or not as long as the life expectancy of a person their age,” he said. “Where that kind of flips is in people’s 70s, which is late for making decisions about retirement.”

Women show much greater longevity literacy than men. In the TIAA survey, 43 percent of women answered the lifespan question correctly, compared to 32 percent of men.

“That concerns me,” Kolluri said of the male respondents, “because what it implies to me is that they’re incurring longevity risk, that they will outlive their money.”

People with greater literacy about human lifespans are more likely to save for retirement, Kolluri said. They are also more likely to have calculated how much money they will need. And they are more likely to be satisfied in retirement.

Lack of longevity literacy leaves many Americans unprepared to finance retirement. There are other factors.

Millions of Americans count on Social Security to see them through retirement. But monthly Social Security checks to retired workers average around $1,800, much less than the typical family spends in retirement.

Prior generations of retirees tapped employer-funded pensions. That income source has gradually given way to employer-sponsored retirement plans.

Yet, according to an AARP analysis, nearly half of Americans have no access to retirement plans at work, especially at smaller firms with fewer employees.

Workers who do save for retirement often don’t save enough. In the latest Retirement Confidence Survey from the Employee Benefit Research Institute, only 64 percent of workers voiced confidence that they would have enough money to live comfortably through their retirement years.

Another measure, Boston College’s National Retirement Risk Index, finds that roughly half of working-age American households are at risk of being financially unprepared for retirement.

Just as worrisome, perhaps, only about one-third of households are aware that they are unprepared.

Many families overestimate how much money they have on hand for retirement and underestimate how much more they will need. Homeowners often focus too much on the rising value of their home, and too little on how much they owe on the mortgage. Workers with retirement accounts may underestimate how far those funds will go. A $100,000 retirement nest egg translates to only about $600 in monthly retirement income. Too often, researchers say, a household has two wage earners but only one partner actively saving for retirement.

Outliving one’s retirement savings is only the largest among several risks Americans face when entering retirement. Another is covering the costs of long-term care.

More than half of Americans entering retirement today will eventually require “long-term services and supports,” at an average cost of $120,900, according to federal research.

“A semi-private room in a nursing home is about $100,000 a year, and that is a lot of money,” Wettstein said. “No doubt, for a lot of people, that would run through their savings very quickly.” UPS reaches deal that lowers chances of nationwide Teamsters strike Teamsters say strike still on the table at UPS

A recent analysis by the National Council on Aging found that 80 percent of people over 60 lack the financial resources to cover long-term care.

“You have this idea that Medicare will cover some of those costs, whereas in fact Medicare doesn’t generally cover most of those costs,” said Genevieve Waterman, director of economic and financial security at the National Council on Aging.

Worried about financing retirement? The National Council on Aging offers an Age Well Planner, and many investment sites feature retirement income calculators.

Entertainment

Jeff Bezos’s Venice wedding celebrations begin with star-studded party after fresh protests

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1 hour ago

June 26, 2025

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Jeff Bezos's Venice wedding celebrations begin with star-studded party after fresh protests

Jeff Bezos and Lauren Sanchez’s star-studded wedding celebrations in Venice have begun, with VIP guests including the Kardashians descending on the Italian city.

The billionaire Amazon founder and his journalist fiancee waved to onlookers as they left a luxury hotel to travel to their pre-wedding reception by water taxi on Thursday evening.

Hollywood star Orlando Bloom was seen flashing a peace sign to fans as he left Venice’s Gritti Palace Hotel and he was soon followed by TV presenter Oprah Winfrey, who smiled and waved.

Kim and Khloe Kardashian travelled to the reception with their mother Kris Jenner – who snapped a picture of the pair on a water taxi – and other notable figures in town for the nuptials include Ivanka Trump and Jared Kushner.

Some 200-250 A-list guests from showbusiness, politics and finance are expected to attend the events, with the wedding and its parts estimated to cost €40m-€48m (£34m-£41m).

Bezos, his soon-to-be wife and their famous guests have taken over numerous locations in the city, with the couple staying in the luxury Aman hotel, where rooms go for at least €4,000 per night.

The first of the weekend’s many wedding parties is taking place in the cloisters of Madonna dell’Orto, a medieval church that hosts masterpieces by 16th century painter Tintoretto.

While the couple and their A-list guests were all smiles, some in Venice are not happy about the wedding – with protesters seeing it as an example of the city being gift-wrapped for ultra-rich outsiders.

An activist climbed one of the poles in the main St Mark’s Square on Thursday, unfurling a banner which said: “The 1% ruins the world.”

Elsewhere, a life-size mannequin of Bezos clutching an Amazon box was dropped into one of the city’s famous canals.

Jeff Bezos and Lauren Sanchez’s wedding in numbers

€48m price tag

The wedding and its parts are expected to cost €40m-€48m (£34-£41m), Luca Zaia, the president of Venice’s local government, said on Tuesday.

This includes sizeable charity donations from the Amazon founder, including €1m (£850k) to Corila, a consortium that studies Venice’s lagoon ecosystem, local media has reported.

90 private jets

The first private jets began landing at Venice airport on Tuesday and there will be around 90 in total, Mr Zaia said.

They’re not all arriving in Venice though, as some have landed at the nearby Treviso and Verona airports.

250 guests

Five of the city’s most luxurious hotels have been booked out to host an estimated 200-250 guests.

These include the celeb favourite Cipriani, where George and Amal Clooney married in 2014.

30 water taxis

Attendees of course aren’t hopping on public water buses to get around the city’s many islands.

The wedding’s organisers have booked at least 30 water taxis for them to use instead.

In a bid to keep demonstrators away from Thursday’s party, the city council banned pedestrians and water traffic from the area surrounding the venue, from 4.30pm local time to midnight.

The couple will exchange their vows on Friday, on the small island of San Giorgio, opposite St Mark’s Square.

Another party will follow on Saturday – the venue for which was changed at the last-minute earlier this week.

Environment

Xiaomi received over 200,000 real orders for its Tesla killer in just 3 minutes

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2 hours ago

June 26, 2025

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Xiaomi received over 200,000 real orders for its Tesla killer in just 3 minutes

Xiaomi has confirmed receiving over 200,000 real orders for its Tesla killer, the YU7, in just three minutes. We are referring to actual orders, with a soon-to-be non-refundable deposit.

Today, Xiaomi launched its second vehicle, the YU7, coming just four years after establishing its EV division and less than a year after introducing its first car, the SU7.

For years, we laughed at the media calling every new EV a ‘Tesla killer’, but over the last few weeks, we have reported how the YU7 might be the first real one.

At the launch event, CEO Lei Jun was not shy about making comparisons to Tesla.

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While the CEO praised the automaker for its leading efficiency and ADAS system, Lei Jun released a series of slides that favorably compared the YU7 to the Model Y.

It started with a comparison of the entire dimensions of both vehicles (image translated via Google):

Xiaomi’s CEO then claimed that the new YU7 had a significantly quite cabin with much less road noises than Tesla’s best-selling SUV (image translated via Google):

In my first drive of the YU7, I did note that the cabin was ultra quiet and demonstrated it briefly in my Youtube video about the new electric SUV:

[embedded content]

The double-panned acoustic glass all around helps with that, but the vehicle’s suspension is also optimized for noise, as well as active noise cancellation throughout the car.

Xiaomi also claimed that the vehicle, especially its electro-shading sunroof, was able to keep the cabin much cooler in extreme heat than Tesla’s Model Y (image translated via Google):

Lei Jun even shared a tweet that he posted about challenging Tesla Model Y’s best-selling crown and then truly went on the attack with pricing.

Ahead of today’s event Xiaomi had already shared a lot of information about the YU7, but pricing was the last significant piece of the puzzle.

The CEO decided to release with a direct comparison of each variant to Tesla’s own Model Y variant, and it was pretty brutal.

The base YU7 starts at just 253,500 RMB (equivalent to $35,300 USD) – 10,000 RMB less than Tesla, and it offers more than 200 extra km in range (image translated via Google):

As for the YU7 Pro, it starts at 279,900 RMB (equivalent to $39,000 USD), more than 30,000 RMB less than Tesla’s Model Y Long Range and it also compares quite favorably on the main features, including range (image translated via Google):

Finally, the YU7 Max was announced at 329,900 RMB (equivalent to $46,000 USD), 25,000 RMB less than Model Y Performance, and the specs are not even close:

With these incredibly favorable comparisons to Tesla’s best-selling SUV, it’s not surprising that Xiaomi has received record demand for the YU7.

It reported having received over 200,000 orders for the new electric vehicle within 3 minutes of opening orders at 10PM local time on Thursday.

It’s also important to note that these orders represent a genuine show of interest. This is not a Cybertruck situation where Tesla claimed to have over 1 million reservations, but ended up only selling about 50,000 units.

People ordering the vehicle need to place a 5,000 RMB (~700$) deposit, which only remains refundable for a few days before the order becomes locked in.

Xiaomi has already started production of the YU7 and made units available for delivery (with configurations limited to those pre-arranged by their designers) for almost immediate delivery.

Electrek’s Take

It’s hard to overestimate just how much this shook up the industry. At an average sale price of $40,000, that’s about $8 billion in sales that Xiaomi booked in 3 minutes.

I would expect the tally to increase past 400,000 in the coming days, and it will likely lock up a significant portion of potential buyers in the segment, particularly Model Y, for an extended period.

Tesla was already experiencing problems in China and had to offer record incentives to maintain its sales, but it will now face even greater challenges in the second half of the year.

I expect that Tesla will quickly launch its lower priced stripped down Model Y to try to help demand following this beating.

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Environment

BYD denies rumors of cutting EV production, says sales are still growing steadily

Published

2 hours ago

June 26, 2025

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BYD denies rumors of cutting EV production, says sales are still growing steadily

BYD says there’s no slowdown, despite the rumors. After several sources claimed that BYD was cutting EV production in China due to slowing sales, the company is pushing back, saying output is stable and sales are still growing.

Why is BYD cutting EV production in China?

With nearly 382,476 new energy vehicles (NEVs) sold globally in May, BYD is coming off its best sales month of 2025.

Like most carmakers in China, BYD reports monthly NEV sales, which include fully electric vehicles (EVs) and plug-in hybrids (PHEVs).

BYD’s sales are up 39% through the first five months of the year, with over 1.76 million NEVs sold worldwide. Not including its commercial vehicles, BYD’s passenger vehicle sales are up 37% through May, with over 1.73 million units sold.

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Its battery-electric vehicles (EVs) are leading the growth, with sales up 40% through the first five months of 2025 compared to the same period last year.

After a few sources claimed the growth was not enough and the company was already cutting EV production over slowing sales, BYD is shutting down the rumors.

Two people close to the matter told Reuters on Wednesday that BYD had slowed output at several factories in China. They added that the company was also reportedly delaying plans to add lines to expand output.

The sources claimed that BYD has cut night shifts and reduced capacity at some plants by at least a third as it faces rising inventory. One of them reported that at least four BYD plants are now operating at a slower pace.

(Source: BYD)

On Thursday, a seperate source, close to BYD, told CnEVPost that the rumors are not true. According to the person familiar with the matter, BYD’s production remains stable and sales are still growing steadily. The source added that dealer inventory is at reasonable level.

If true, the claims could have been pretty significant, given BYD’s aggressive price cuts last month. On May 23, BYD slashed prices by up to 34% on 22 of its vehicles.

BYD-luxury-EV-Ferrari — BYD Yangwang U8 SUV (left) and U7 luxury EV sedan (right) Source: Yangwang

BYD still expects to sell around 5.5 million vehicles this year, a nearly 30% increase from 2024. Last year, BYD sold over 4.72 million NEVs, up 41% from 2023. However, its annual growth rate has slowed over the past few years.

According to data from CnEVPost, BYD’s annual sales growth rate has declined from 218% in 2021 to 208% in 2022 and 62% in 2023.

BYD-EVs-Europe — BYD “Xi’an” car carrier loading Dolphin Surf EVs for Europe (Source: BYD)

The Reuters report cited a survey from the China Automotive Dealer Association last month found that BYD dealers held one of the highest inventory levels, with an average of 3.21 months. In comparison, the industry-wide average was 1.38 months.

Despite this, BYD is still gaining market share in China. The source told CnEVPost that BYD’s share of the auto market has risen from 15% to 17% in just the past few months

Electrek’s Take

With an intensifying EV price war and a wave of low-cost domestic cars flooding the market, Chinese automakers, including BYD, are now looking overseas to drive growth.

BYD is coming off its sixth consecutive month with record overseas sales in May, having sold over 89,000 NEVs outside of China.

After it topped Tesla in monthly vehicle registrations in Europe and the UK this year, BYD launched its most affordable EV earlier this month. The Dolphin Surf is the European version of its top-selling Seagull EV, which can be bought for under $8,000 in China right now.

BYD’s Dolphin Surf arrives as one of the most affordable vehicles in the UK, starting at just £18,650 (about $25,000).

During the launch event, BYD’s special advisor for Europe, Alfredo Altavilla, called (via Autocar) the Dolphin Surf “the missing piece in the A/B-segment.”

According to Altavilla, BYD is launching vehicles in Europe at a faster rate than any other carmaker. “I have zero problem in saying I don’t think there has ever been such a product offensive done in Europe as the one BYD is doing,” he said during the event.

BYD’s sales are expected to double in Europe this year to around 186,000 units. By 2029, S&P Global Mobility forecasts BYD’s sales could reach around 400,000 in Europe. Between its new plants in Hungary and Turkey, BYD is expected to have a combined annual production capacity of over 500,000 units.

And Europe is just one global market. BYD is already a leading EV brand in overseas markets like Brazil, Thailand, Australia, and several other key markets.

Even if the sources’ claims that BYD is cutting production in China were true, the world’s leading EV maker is still expected to see significant growth overseas over the next few years.

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