A significant swath of Americans now expect to spend almost 40 years in retirement, with about 1 in 8 workers planning to stop working before they turn 61. At the same time, most workers say they want to live until they’re 100. 

That means some workers are eyeballing a four-decade retirement, an ambitious goal that comes with serious downsides. Among them: How to fund almost 40 years of retirement at a time when most workers are far from reaching their savings goals. 

The findings, from a recent survey from financial services firm Corebridge Financial, underscore the gap between Americans’ lofty dreams for their golden years versus their financial realities. The median retirement savings balance for people who are between 55 to 64 — just years from potentially stepping back from work — is $185,000, according to NerdWallet.

“100 is a very long and fulfilling life, and that’s pretty optimistic and great to see,” Bryan Pinsky, president of individual retirement at Corebridge Financial, told CBS MoneyWatch. “That optimism and hope does come with a little bit of tension — only 27% are very or extremely confident that they won’t outlive their retirement savings.”

In fact, the survey, which polled about 2,300 adults, found that only about 4 in 10 respondents believe their savings will last 20 years in retirement, suggesting that while more Americans want a three- or four-decade retirement, few expect they’ll have funds that will stretch that long. 

The rule of thumb for retirement savings is to draw down 4% of one’s retirement assets each year. That means someone with $185,000 saved in a 401(k) will have annual income of $7,400 from their savings — hardly a big cushion, especially if one needs extra medical care or assisted living in old age.

Even more troubling are the 3 in 10 Americans over 59 years old who don’t have a penny saved for retirement. Those workers are likely to spend decades in old age surviving solely on Social Security, a plan that’s geared to replace only a portion of one’s working income. The typical retiree on Social Security receives $22,800 annually from the program — above the poverty line, but hardly enough to fund a cushy retirement.

Only about 10% of Americans between the ages of 62 and 70 are both retired and financially stable, Teresa Ghilarducci, a professor at The New School for Social Research in New York and a retirement expert, recently told CBS MoneyWatch. Increasingly, her research has found, many seniors need to return to work to earn extra money despite being “retired.” 

The realities of longevity risk 

Longevity risk is a cornerstone of retirement planning that few Americans understand, Stanford University expert Annamaria Lusardi told CBS MoneyWatch last year. This issue involves understanding how long you’re likely to live once you hit retirement age, with many Americans underestimating this figure — and therefore failing to sock away enough money to support themselves.

On the other hand, workers who believe they’ll live until 100 might be motivated to stash away more money for their retirement years.

Interestingly, Gen Z, the youngest generation in the workforce, is also the most optimistic about reaching their centennial anniversaries, with about 63% saying they want to reach the milestone. That’s about 10 percentage points higher than baby boomers or Gen X. 

That could explain why Gen Z is taking retirement more seriously than older generations did at their age. About 3 in 10 Gen Zers (who are between 11 to 26 years old) currently have a 401(k) or IRA, compared with 1 in 10 Gen Xers when they were the same age in 1989, according to a recent study from the Investment Company Institute.

How to fund a 40-year retirement

Asked how to fund a retirement that can stretch almost 40 years, Pinsky noted that it’s important for workers to start saving. And he encouraged workers to visit a financial planner or expert who can help them devise a retirement plan. 

“What is most important is recognizing whatever your retirement plan is, you need to revisit it on a regular basis,” he added. 

That’s good advice for people who have access to employer-sponsored retirement plans, but experts like Ghilarducci point out that the U.S. retirement system is failing millions of Americans. For one, many workers lack access to 401(k)s and other employer-sponsored matches, especially people who are gig workers, low-wage employees or unpaid caretakers for family members. 

Saving early is key, given the power of compound interest, but many young workers are strapped by student loans and the high cost of living and thus may not feel able to set away funds. 

To be sure, millions of workers retire every year, even if they don’t have the $1.8 million that Americans say they need to retire comfortably. But retirement is increasingly something enjoyed by the rich, with Ghilarducci’s research finding that low-income workers typically spend about 12 years in retirement, while the rich spend about 20 years in retirement.