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How increased lifespans are reshaping retirement security across the US
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By Logan Brown, M.S. for Abacus Global ManagementOct. 22 2025, Updated 10:18 a.m. ET
How increased lifespans are reshaping retirement security across the US
One of the many upsides to living in the 21st century is that average life expectancies are higher than ever before, and so people who make it to retirement age can expect to enjoy many more years of health and happiness than their parents and grandparents.
This creates concerns at a state and national level, as the aging population puts pressure on various systems that were designed and implemented long before current lifespan trends came to pass. It also poses potential problems for individuals, as the question of financial security in retirement becomes more acute when people can reasonably expect to live longer while relying on the pension provisions they have put in place.
So, is there a genuine crisis brewing, or can we expect increasing life expectancies to be manageable with the right planning? The team at Abacus Global Management, Inc. set out to answer this question by letting the data do the talking.
The Growth of Golden Years Living
The latest statistics from the CDC, published for 2023, indicate an average life expectancy of 78.4 years. This represents a nearly one-year increase compared to 2022’s data, indicating just how rapidly lifespans are increasing year-on-year.
What’s more pertinent to our discussion is the life expectancy for someone who reaches 65. This is 19.5 years on average, meaning that a person who chooses to end their career at this point will have nearly two decades ahead of them.
There is a gender gap here, with women who reach 65 living for 20.7 years, while men can expect to live for 18.2 years if they survive to this point.
The Retirement Savings Conundrum
Interpreting the data on retirement security is comparatively tricky, since there’s a significant gap between those with significant sums squirreled away and those with more modest pots. This makes averages less useful without further scrutiny.
Vanguard’s latest report on saving habits exemplifies this. The median account balance reported for 2023 was $35,286. This represents the exact midpoint in every account across this particular provider’s customer base.
However, the average holding for that year was $134,128, with this figure driven well beyond the median by a smaller number of people who had set aside significantly more cash than is typical. In fact, just 15% of customers had more than $250,000 saved, while 53% had under $40,000.
Fidelity’s figures offer a little more clarity. Here, data on 401(k) and IRA balances are divided generationally. Baby boomers lead the pack with $249,300, with Gen X coming close behind with $192,300. Millennials have $67,300 on average, while Gen Z brings $13,500 to the table, which is understandable, given that many members of this group are only just entering the world of work or are still in full-time education.
It’s also worth touching on data drawn from the Survey of Consumer Finances, which paints its own picture of the current state of retirement savings. The most recent survey, conducted in 2022, reveals that family retirement accounts average $87,000. That’s up from $75,350 in 2019.
The Growing Gap
So, people are living longer and getting older, and average retirement pots are increasing, albeit modestly. What really matters is the affordability of retirement. Inflation remains an issue, and individuals with fixed post-retirement incomes must consider this when seeking to maintain their quality of life.
Data from the Federal Reserve Bank of St. Louis shows that the average annual expenditure for over-65s is $60,087. The math is simple: You’ll need $5,000 a month to keep up with the cost of modern living, or $1,171,696 over 19.5 years.
The Social Security retirement benefit may account for a portion of this, although it is a long way short of the $5,000 mark. For instance, recipients were paid out $1,976 for January of 2025, meaning that they’d need over $3,000 from their personal retirement assets to close the gap.
The Retirement Shortfall
While $1.17 million is a daunting figure, retirees don't have to fund it all from their personal savings. Social Security provides a crucial income stream. With the average monthly benefit at $1,976 ($23,712 per year), the typical retiree can expect to receive about $462,000 from Social Security over their 19.5 years of retirement.
This leaves a gap of roughly $710,000 that must be covered by personal savings, pensions, and investments.
When this required savings number is compared to reality, the true scale of the problem emerges. According to Vanguard's 2023 "How America Saves" report, the median retirement account balance was just $35,286. Even the average balance, skewed by high-net-worth individuals, was only $134,128. This reveals a staggering shortfall of nearly $700,000 for the typical American retiree.
The Bottom Line
There are variations in lifespan based on age, gender, socioeconomic status, race, and many other factors. These same variables influence average incomes, savings, and other assets. So drawing conclusions about your own circumstances from top-level data is not possible.
What is obvious is that if you’re still working now, you’ll live longer than you would if you’d been born into any earlier generation. As such, preparing for life after work requires more thought and a firmer commitment sooner rather than later.
The retirement gap is real, and the cost of living is only going to increase as time passes. Saving early and investing wisely will stand you in good stead for a future in which the only certainty is that you’ll need a firm financial footing to enjoy retirement, rather than just subsisting on state payouts.
This story was produced by Abacus Global Management and reviewed and distributed by Stacker.
