Shoppers worry outliving financial savings as AI and longevity upend retirement math

More than half of Americans fear they are going to withdraw an excessive amount of from their retirement financial savings and run out of cash earlier than they die and new analysis means that worry is grounded in a scientific miscalculation of how lengthy retirement really lasts.

The 2026 TIAA Retirement within the Age of AI and GLP-1s Survey, carried out by KRC Research amongst 1,000 U.S. adults aged 18 to 65 between July 27 and July 31, 2026, finds that 53% of respondents are most involved about outliving their financial savings, in comparison with simply 21% who fear about underspending.

Eight in 10 Americans report monetary fears about dwelling longer, compounded by synthetic intelligence (AI) and GLP-1 drugs, a category of medicine initially developed to deal with diabetes and weight problems which have proven vital results on longevity.

The findings sharpen a dialog across the hole between how lengthy shoppers assume they are going to dwell in retirement and the way lengthy they’re statistically prone to dwell, which is wider than most respect, whereas the instruments accessible to shut it are underused.

The longevity hole shoppers will not be seeing

Tim Pitney, Managing Director and Head of Lifetime Income Distribution at TIAA in Cambridge, Massachusetts, has spent years documenting the longevity miscalculation that runs through American retirement planning. The downside, he says, begins with a quantity that shoppers know however misapply.

“You get to 65, you survived some other main healthcare points or disasters, and now your longevity is just not 78, it is extra akin to love 87 or 88,” Pitney informed InvestmentNews. “And then for a pair, for one to outlive, it is into the 90s, 94, 95 or so.”

Workers are likely to anchor their retirement planning on common life expectancy at start – roughly 78 averaged throughout women and men – with out accounting for what reaching retirement age really does to these odds. A consumer who has made it to 65 is not dealing with common mortality threat; they’ve already survived the occasions that drive down inhabitants averages. Their related planning horizon is a decade longer than their instinct tells them.

For advisors, that recalibration has direct penalties for drawdown technique, asset allocation, and the dialog round assured earnings. A retirement earnings plan constructed for a 78-year-old horizon is structurally totally different from one constructed to maintain a pair’s joint life expectancy into the mid-90s, and the distinction issues most within the selections made at or close to the purpose of retirement.

Forty-three % of survey respondents will not be assured that conventional retirement planning strategies can hold tempo with longer lifespans. That determine rises to 49% amongst girls and 47% amongst Gen Z employees – two consumer segments whose planning horizons advisors could also be systematically underestimating.

What AI and GLP-1s are doing to the retirement calculus

The survey introduces two forces which can be actively disrupting shoppers’ sense of what their retirement will price and advisors’ capability to mannequin it with confidence.

On the healthcare price facet, American employees are almost evenly break up on what AI will do to retirement bills: 27% imagine AI will improve prices by producing costly new breakthrough therapies; 22% imagine it’ll decrease prices via better effectivity and accessibility; 20% anticipate no vital monetary affect; and 32% merely have no idea.

Seventy-seven % already establish rising healthcare prices as a direct menace to their retirement plans; a priority that sits alongside the rising price of dwelling and inflation, cited by 80% of respondents.

GLP-1 drugs add a second dimension of uncertainty. If medicine initially developed for metabolic circumstances show to increase wholesome lifespans meaningfully, the longevity assumptions embedded in shoppers’ retirement fashions (and within the actuarial tables that underpin annuity pricing) may have revisiting.

The high monetary fears related to an extended life are acquainted to any advisor who has had a late-career retirement earnings dialog: 46% of survey respondents worry operating out of cash to cowl primary day-to-day bills; 42% fear about inadequate disposable earnings to take pleasure in the additional years; 41% worry the excessive price of long-term medical, reminiscence, or nursing care; and 30% fear about changing into a monetary burden on their youngsters or members of the family.

“An annuity would not care what AI does,” Pitney stated. “Regardless of what occurs – whether or not medical advances lengthen longevity or do not transfer the needle, whether or not rates of interest rise or fall – that assured earnings cost will proceed to reach.”

The rollout sign advisors ought to learn

The TIAA survey knowledge arrives alongside a market dynamic that has direct relevance for advisors advising shoppers on retirement earnings transitions. According to LIMRA, total US retail annuity sales reached a record $464.1 billion in 2025 – a 7% improve 12 months over 12 months and the fourth consecutive annual file.

“Think about individuals who have a complete retirement bundle with their office, perhaps paying all-in prices of 10 to twenty foundation factors,” Pitney stated. “They’re taking their cash out and instantly going out and buying an annuity. But if you do not have the type of earnings companies inside these plans, that is what is going on to occur.”

That foundation level differential is a dialog advisors needs to be initiating proactively with shoppers who’re approaching retirement with vital balances inside employer-sponsored plans. The query of whether or not to roll over, keep within the plan, or entry earnings options contained in the plan carries significant price implications and the reply is never apparent with out steerage.

TIAA is scaling its institutional lifetime earnings options into the broader 401(ok) market in response to this dynamic. By the tip of 2026, the agency expects to serve 1,000 distinctive establishments utilizing personalized options with embedded lifetime earnings in default financial backing choices, reaching roughly $100 billion in property and round a million members by subsequent 12 months. As extra office plans construct credible earnings tiers, the rollover dialog will turn into extra nuanced – and the advisor’s function in navigating it extra consequential.

The survey’s broader message for advisors is in keeping with what the info has been pointing towards for years: shoppers want assured earnings methods, they underestimate how lengthy these methods must final, and they’re more and more anxious about forces – AI, rising healthcare prices, GLP-1-driven longevity extension – that no accumulation technique alone can absolutely deal with.

Forty-three % of survey respondents will not be assured that conventional retirement planning strategies adequately account for the way lengthy retirement now lasts. That is just not a disaster of confidence advisors can speak shoppers out of. It is a gap for the earnings planning dialog that the numbers have lengthy demanded..