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Retirement Planning for Future 100-Year-Olds

Millions of Americans should be planning for a retirement that lasts past their 100th birthday.


In 1900, the life expectancy for an American woman was 48 years. By 2000, it had climbed to 80. And it continues to inch higher today, thanks to a number of technological and social factors. 

More and more Americans are expected to live into their 90s and even past 100. In 1990 there were about 1 million Americans over the age of 90. Today there are nearly 2.3 million — including 1.6 million women. By 2060 there will be 9.3 million; these future 90-year-old women are about 45 years old today.

Thousands of people. Data Source: United Nations.

In other words, roughly the current population of New Jersey will be 90 or older by 2060. By 2100, the number of nonagenarians (and older) will climb to 17.3 million — approximately the combined population of Ohio and Indiana.

The surge in the number of those living past 100 follows a similar trajectory. This group has grown from about 32,000 in 1990 to 72,000 today. In another 25 years nearly 200,000 Americans — or roughly the population of Salt Lake City —  will be 100 or older. By 2100 there will be 1.7 million people over the age of 100.

Thousands of people. Data Source: United Nations.

More than 80 percent of Americans 100 or older today are women. Though that percentage is expected to gradually decline, it will continue to skew female; by 2100, about two out of every three 100-year-olds will be women.

Aging Demographics Globally

The U.S., of course, is not alone in this trend. By 2060 there will be 6.6 million people over the age of 100 globally, including 1.4 million in China.

Thousands of people. Data Source: United Nations.

By 2100, the number of 100-year-olds will rise to more than 26 million globally. The geography of this demographic reflects the huge population growth that will take place in many emerging markets — particularly those in Asia.

Thousands of people. Data Source: United Nations.

Caveats

There are a couple of obvious but important notes about the charts above. Firstly, while the growth in the oldest demographics is enormous it is coming off of an extremely small base. The odds of living past 90 or even 100 are still quite low. Currently, the life expectancy for an 80-year old is about 88. A 90-year old is expected to live until the age of 94.

Data source: Social Security Administration.

Even though the number of Americans living past 90 will surge in coming decades, this will likely not be a universal experience. There are currently about 22.1 million Americans age 55 to 59. The UN projections used to create the charts above above indicate that 630,000 — about 2.8 percent of those in the current 55-to-59 bucket — will be over the age of 100 in 2060.

Similarly, there are about 20.7 million Americans currently between the ages of 15 and 19. The 1.7 million expected to be 100 or older in 2100 represents just 8.4 percent of this figure. (These probabilities are slightly high, because some of those who will be over 100 in 2060 are already 60-plus and some of those who will be over 100 in 2100 are already older than 19.)

Data Source: United Nations.

In other words, your odds of making it past 100 are still relatively slim. If you’re a fit, healthy, non-smoker, however, the likelihood increases significantly. For relatively affluent and healthy 45-year old women who avoid risky behavior, a life expectancy calculator maintained by the University of Pennsylvania predicts a median lifetime of 95 years with an upper quartile of nearly 103 years (meaning that there is a 25 percent chance of living past age 103).

Secondly, forecasting is hard — especially when constantly changing technology can have a major impact on the outputs. The number of 100-year-old Americans walking around in 2011 will probably differ quite a bit from the 1.7 million projected in the most recent revision completed by the UN.

Retirement Planning

Millions of Americans alive today — including hundreds of thousands in their 40s and older — will enjoy their 100th birthday. That also means prolonged retirements; many of those retiring at 60 will spend more of their life as a retiree than as an employee.

Rising life expectancy and increased odds of making it past 100 are by no means insurmountable obstacles in retirement planning. Discussion and consideration of these possibilities is a worthwhile topic for anyone planning to retire.

About the Author: Michael Johnston

Michael Johnston is senior analyst for Fund Reference, and also serves as COO of parent company Poseidon Financial. His investment expertise has been featured in The Wall Street Journal, Barron’s, and USA Today, among other publications. He resides in Chicago.

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