Why America gets a 'D' grade when it comes to retirement

By Jessica Hall

Looking at areas such as money, care, health and housing, the U.S. comes up short

U.S. adults are generally underprepared to live well in older age, according to a new report.

America barely gets a passing grade when it comes to retirement, scoring an average of a "D."

U.S. adults are generally underprepared to live well in older age, according to the "longevity preparedness index," or LPI, from John Hancock, developed with the research institute MIT AgeLab. The LPI tools measured American adults' readiness to thrive in older age, looking at areas including social connection, finance, daily activities, care, home, community, health and life transitions.

"It's frankly no longer just about how much you've saved for retirement or even about how healthy you are - it's also about where you'll live, how you'll get where you need to go, how you'll fill your days, and who you will share your time with," said Brooks Tingle, president and chief executive of John Hancock. "And the results of the index tell us that while some people are preparing for longer lives, there is much more we can and should be doing."

The categories were evaluated on a scale of 0 to 100, along with an overall score that represents the average of the domain scores. In a survey of over 1,300 adults, U.S. consumers on average scored a 60 out of 100 overall - equivalent to a grade of "D."

The weakest areas came in care (score of 42), home (score of 56), and health (score of 56), while the strongest areas were community (score of 70) and social connection (score of 69) domains, which measure things like having friends and family you can rely on and living in an area with access to recreation spaces, health services and transportation.

"The LPI is more than a measurement tool - it is a research-based framework that seeks to redefine how we think about preparing for later life," said Joe Coughlin, founder and director of the MIT AgeLab and a MarketWatch contributor. "While health and wealth security are key, between those two vital bookends are the routines and assumptions that make up daily life. The LPI seeks to spark public awareness and action to prepare people for living what is likely to be a full one-third of their adult lives."

The findings come as the U.S. population aged 65 and older is projected to surge from 58 million to 82 million by 2050, according to the U.S. Census Bureau. And one-fifth of an individual's life, on average, is now expected to be lived in a state of illness, according to a study in the National Library of Medicine. Meanwhile, almost four in 10 people will face financial instability as they age, according to the World Economic Forum.

Women outpaced men in most domains, scoring more strongly in areas such as care (score of 43 vs 41), social connection (score of 71 vs 68), daily activities (score of 61 vs 59), and managing life transitions (score of 62 vs 60). Men scored higher than women in the finance domain (score of 65 vs 63).

The weakest link

The biggest longevity blind spot was care - with few U.S. adults knowing who will care for them as they age or how they will afford that care, and many haven't discussed their wishes with family or loved ones, the study found.

"Retirement in America - it's a tale of two cities. There's a subset doing exceptionally well. They're thriving, prepared, ready and leading active lives. The people getting D's or F's - some may be prepared financially but they're isolated and inactive and that leads to a lot of problems," said Joe Casey, managing partner of Retirement Wisdom in Princeton, N.J., and author of "Win the Retirement Game: How to Outsmart the 9 Forces Trying to Steal Your Joy."

"It's not just one thing you need to do to have a successful retirement. Some people are doing exceptionally well and it's not always the ones with the biggest 401(k)s," said Casey, who urges people to invest in their own health and wellness, relationships, learning and fun. Casey also stressed that being of service to others, having creative pursuits, personal growth, and work or projects can give your retirement more meaning.

Ken Dychtwald, chief executive of AgeWave and co-author of the book "What Retirees Want: A Holistic View of Life's Third Age," said that a retirement that could last decades is a relatively new phenomenon in history as people are living longer than ever before.

"It's not unreasonable to contemplate a 20- or 30-year retirement now. It's an extraordinary change. It's not necessarily a bad thing, but we're not prepared for it," Dychtwald said.

"An overwhelming number of people don't have the resources to pay for a 20-year retirement. And tens of millions of retirees have no place to turn for reliable advice on the other dimensions of people's lives. We need a more holistic view that it's not just wealth and health - it's relationships, purpose, friends and coming into a new identity effectively," Dychtwald said.

A successful retirement may start with some baby steps rather than a wholesale makeover of your life.

"Taking some small but intentional steps - such as planning for a new hobby, starting a fitness routine, or having a conversation about care - can lead to a better future and make a big impact on how we spend our later years," Coughlin said.

Robert Laura, founder of the Retirement Coaches Association, said he doesn't see Americans themselves as faring poorly in retirement preparation, but instead, the financial services industry has had the missteps.

"I think the financial services industry has failed and continues to fail consumers by focusing the retirement transition on the financial aspects. Yes, more and more firms are saying they care about more than your money, but if you go to their website, all you see is information about financial products and services," Laura said.

"The new narrative that must take root in the industry is retirement and longevity planning that goes beyond the dollars and cents because running out of money pales in comparison to running out of family, friends, good health, and time," Laura said.

-Jessica Hall

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10-15-25 1907ET