Here’s some good news: After falling in recent years, U.S. life expectancy rose in 2025, the Census Bureau says, to a record 79.4.
That’s up from 79.25 the year before. Women, on average, can expect to live a bit longer than that; men, a bit less.
That’s the good news.
Now, the not-so-good. Living longer means we’ll need more money. For most Americans, that’s the problem. Can we afford to live longer?
Nearly two-thirds of us — 64% — fear we’ll run out of money before we die. In fact, says a study by the Allianz Center for the Future of Retirement, we’re more afraid of this than death itself. The fear is greatest, Allianz says, among Generation X (70%), who are in their 40s and 50s and fast approaching retirement; and millennials (66%). What about baby boomers, the youngest of whom are now 61 and retiring at the rate of some 10,000 per day? Here too, the fear is great: 61% of boomers are afraid they’ll run out of money.
They should be scared. According to the Federal Reserve’s latest data (albeit from 2022), the median savings balance stands at $87,000. Median means that half have more than this, while half have less. It certainly isn’t much when you consider that just one expense that we’ll all face in retirement — healthcare costs — far exceeds what we have saved.
Let’s be generous here and say that the median savings figure from 2022 grew as much as the S&P 500 SPX in 2023 and 2024 (about 55% over the past two years, a fabulous return). That would boost the $87,000 to about $134,000. Of course, tens of millions of Americans aren’t in the market, and if they were, who’s to say they see those kinds of returns? But, again, for argument’s sake, let’s say the median retirement savings figure is $134,000.
Set against this is an estimate of retiree healthcare costs, which is updated every year by Fidelity Investments, the Boston-based asset-management giant. Fidelity’s latest forecast is $172,000. That’s how much the average 65-year-old may need to shell out — in after-tax savings — to cover healthcare expenses in retirement. Again, because women generally live a bit longer than men, they’ll need more than men.
There are caveats, of course. How much you’ll need depends on several factors, including when and where you retire and how healthy you are. Fidelity adds that “it also depends on which accounts you use to pay for healthcare — e.g., 401(k), HSA, IRA, or taxable accounts; your tax rates in retirement; and potentially even your gross income.”
Even so, it has been clear for many years that the likely cost of just one big-ticket item — healthcare — dwarfs what most people have salted away for retirement.
Rising costs for everything from electricity — where costs, says the utility advocacy firm PowerLines, are “significantly outpacing inflation,” to groceries — the Trump administration says food prices rose 3.1% last year — mean it’s easy to see why retirees will continue to feel pinched. And pinched for longer, it seems, since lifespans are beginning to grow again.
A recent survey from the National Endowment for Financial Education confirms the pressure that Americans are under. The NEFE study said 88% of respondents felt financially stressed as 2026 dawned — and 77% experienced a financial setback in 2025. “As we enter 2026, Americans are facing ongoing challenges and reporting some of the highest levels of financial concern we’ve seen in quite some time,” Dr. Billy Hensley, NEFE’s president and chief executive, said in a statement.
For many, difficult choices loom. When should you retire? When should you take Social Security? Should you — and can you — move to a more affordable town? Should you — and can you — keep working? If you’re married, what about your spouse’s situation and resources? And what about your proximity to your children and grandchildren, if you have them?
These are all big, often intertwined matters to be weighed. There’s no one answer here, as everyone’s situation is different. My recommendation is to consult a trusted financial adviser if you have access to one.
Meanwhile, as life expectancy inches higher and financial stress grows, here are three big things to ponder:
You can take this as early as 62. About one-third of seniors do. Many need the cash to pay for healthcare expenses until Medicare kicks in at 65. On the other hand, each year you wait to claim benefits, you’ll get approximately 8% more. That’s quite an incentive, because if you think you’ll live into your 80s or beyond — as more seniors do — you may need that extra cash. On the other hand, the Social Security trust fund is projected to be exhausted by 2033, which could mean cuts of at least 19%, according to current government projections. Talk about a dilemma: Take a lower amount now, or hold out for more in a few years and risk having it cut.
Most financial advisers will tell you to keep working as long as you can, because a paycheck, possible health benefits and access to tax-advantaged retirement accounts — hopefully with your employer kicking in some cash — could ease the financial stress that so many people feel.
If you own a home and are single, you could sell and the first $250,000 in profit is tax-free. If you’re married? The first $500,000 is. Given the dearth of savings I mentioned earlier in this column, this one thing could be a game-changer. A quarter or half-million tax-free? Think about that. The spring selling season is about to begin.
So life expectancies are rising again, that’s good news. If you consider your situation, explore your options with a trusted financial adviser and make a few careful moves, you could reduce some of the stress that you might have. This, too, would be good news.
One of the questions traders always ask me is how important trading psychology is to a newbie.
In this old man’s humble opinion, sound trading psychology...
