What's missing from Americans' plans to live long

Many Americans aren't fully grasping the financial implications of living longer lives.

That's a key finding in a recent report, "How Americans Manage Their Finances," a collaboration between the University of Southern California and the Society of Actuaries. While some people are taking appropriate steps to live long lives, others don't make long-term thinking a priority or they engage in wishful thinking.

It might help if you compare the steps you're taking to those who were surveyed.

People age 60 and over were asked if, in the past three years, they had retired or done any planning for retirement. "No" was the answer researchers got from 58 percent of people 60 to 69 and 87 percent of people 70 and over.

But anybody age 60 and over should be doing some planning for retirement. Even if you've already retired, you'll at least want to check how your retirement investments are performing and monitor your spending to make sure your assets have a good chance to last the rest of your life (and your spouse's life, if you're married).

People who had retired or planned for retirement during the past three years were asked which time period was most important for planning their family's spending and savings. Only 31 percent of those 60 to 69 and 35 percent of those 70-plus answered that they planned their spending and saving over periods longer than 10 years.

The odds are great, however, that most people in these age groups will live much longer than 10 more years. How you'll save and spend should be very important parts of your retirement planning.

When the same group was asked for the most important time period for planning their retirement, their answers were better: 63 percent of people 60 to 69 said "for the rest of my life" or "the rest of my life and my spouse's life," and 69 percent age 70 or older answered similarly.

Unfortunately, that still leaves roughly one-third of older Americans who do no planning to make sure their money will last as long as they do.

The survey also asked respondents about the specific retirement planning issues they considered:

• Ability to pay your bills in the longer term: 64 percent of people 60 to 69 and 77 percent of people 70-plus answered yes.
• How inflation will increase your expenses: 65 percent of people 60 to 69 and 61 percent of people 70-plus answered yes.
• Support for your spouse after your death: 41 percent of people 60 to 69 and 32 percent of people 70-plus answered yes.
• How to cope financially with a major illness: 50 percent of people 60 to 69 and 66 percent of people 70-plus answered yes.
• How to cope financially with a long stay at a nursing home: 38 percent of people 60 to 69 and 53 percent of people 70-plus answered yes.

By the way, "yes" is the right answer for each of the above questions, and it serves as a good checklist to compare with your planning.

The study also showed a low prevalence of planning for long-term care needs, which is another important retirement planning step. Only 23 percent of people 60-69 and 41 percent of people 70-plus have made plans for long-term care, if needed.

The fact is, many people have the potential to live a very long time -- to your 90s or even age 100. Nobody said it would be easy to support yourself financially for that long without some planning. Look at it this way: The time you might spend planning your retirement is a good price to pay for those extra years of life.