American centenarians will quadruple by 2054, causing money challenges

The number of centenarians in the United States is poised to increase significantly in the coming decades. This longevity poses a major financial challenge to households.

By 2054, there will be about 422,000 Americans aged 100 and older, more than four times the 101,000 in 2024, according to a Pew Research Center analysis of U.S. Census Bureau data.

Centenarians now represent 0.03% of the total U.S. population, a share that is expected to reach 0.1% in three decades, according to the analysis.

Additionally, according to Pew, the centenarian population has nearly tripled in just the last three decades.

Meanwhile, even if Americans don’t reach age 100, more of them will live to be 90 and 95, said John Scott, director of retirement savings at The Pew Charitable Trusts.

This demographic change will put enormous pressure on the traditional notion of retirement financing, experts say.

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“If people are retiring in their 60s, that means retirement funding needs to last for decades,” said Barry Glassman, certified financial planner and founder of Glassman Wealth Services.

“If retirement is going to last that long, then savings also need to last that long,” said Glassman, a CNBC advisory board member.

One of the best ways to protect yourself against depleting your savings is to work longer, retirement experts say.

This is already happening.

By 2032, 25% of men and 17% of women aged 65 and older are expected to be in the labor force, up from 24% and 15%, respectively, in 2022, according to the Population Reference Bureau.

This may be especially necessary as employers have offloaded the responsibility for retirement savings onto workers’ shoulders, moving from pension plans to 401(k)-style retirement plans. Workers must choose how to invest and how much money to save with each paycheck to ensure a comfortable retirement.

But even delaying retirement a few years — from age 65 to 68, for example — can financially “move things significantly,” Glassman said.

“People need to be willing to work longer,” he said.

This generates more years of income and generally allows people to save longer, delay drawing down their nest egg, and defer applying for Social Security benefits.

Social Security, unlike 401(k) plans, offers guaranteed income for life. By delaying filing until age 70, retirees can maximize their monthly checks.

If they have the resources, retirees can also consider purchasing an annuity with part of their savings to generate a guaranteed monthly income like Social Security, Pew’s Scott said.

Retirees can still work part time to provide additional cash flow, Glassman said.

He’s seeing more clients doing this, with professionals becoming consultants in retirement, or radiologists who can work remotely and read medical exams, he said.

“There is a demand for labor in this country,” Scott said.

Staying current in your skills can help retirees find work later if they need to supplement their income, he said.

Of course, working longer will not be possible for everyone.

People may have physically demanding jobs that force them to retire relatively early, or suffer from health complications that require early retirement, for example. Others may not be able to hold a part-time job.

Retirement will likely be full of “healthy, vibrant” years in the decades to come thanks to advances in technology and health care, for example – meaning the idea of ​​working longer, even in physical jobs, isn’t an exaggeration, Glassman said.

He cited marathon statistics as an example: 441 people aged 70 and older completed the New York City Marathon in 2023, or about 0.9% of all runners. This represents an increase from 144 people twenty years earlier, or approximately 0.4% of the total runners.

Outside of work, Americans should try to save as much as they can and start as early as possible, Scott said. Those who receive an employer 401(k) match at work should aim to save enough to get the full match, which is essentially free money, he said.

Responsibilities such as paying off student loans, saving for a house and child care expenses make saving difficult, but even a little bit of saving now will help in the long run, he said .

“Over time, it will add up,” Scott said.