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“Purpose and productivity, not just perpetuity”

“Purpose and productivity, not just perpetuity”

And, I quote. This is from an article by Marc Freedman, founder and chief executive officer of Encore.org, that was published in the Wall Street Journal entitled “How to Make the Most of Longer Lives”. The article takes a new look at longevity and what it means to have (and finance) an increasingly longer post midlife.

At the highest level, there are 2 compounding factors which year-over-year are reshaping the demographics of the US and our world: 1) all baby boomers have crossed the 50 years of age threshold as of 2014 with >10,000 turning 65 daily in the US, and 2) thanks to modern medicine and healthier lifestyles, people are living longer. Today, according to the article which sites several resources the average life expectancy for a 65-year-old American is 19.3 years. But, what do we do with those years? Are older Americans an asset or a liability?

Just to provide a bit of context:

  • Today 13-14% of people in the US are over the age of 65. By 2050 it will be 20% (CMS).
  • In 2011, for every retiree there were 3.3 members of the workforce helping to finance retirement. By 2030 this will fall to 2.3. (Medicare Trustee 2012 Report).
  • Healthcare costs have reached an unsustainable 3.2 trillion in the US (and growing) driving 1 in 4 seniors into bankruptcy (Journal of General Internal Medicine, 2013).
  • Caregiving, itself, has become a real financial burden on our economy. The cost of informal caregiving in terms of lost productivity to U.S. businesses is $17.1 to $33 billion annually (MetLife Study of Working Caregivers and Employer Health Costs: National Alliance for Caregiving. 2010).
  • This is not just a Boomer problem. As the last Boomers turn 85, the first Millennials will turn 67, and as of this year, Millennials outnumber Boomers.  This means we can expect at least a century of demographic shifts towards a more mature population.

So is it even conceivable to finance 50+ years of retirement? Must these years be productive?

In the late 1800’s life expectancy reached ~40 years. Then midlife was 20 years. Is it time for us to think about changing our perception on age and aging again?  Is 65 the new 50 and 75 the new 65? What would this mean in real terms…pushing out the retirement age? Clamping down on discriminatory employment practices (think ageism)? Redefining the role that seniors play within our society to tap into their experience, knowledge and wisdom in support of meaningful contribution?

Denying the problem exists is not a winning strategy. This is not a Boomer-only problem. Allowing our support systems to collapse will have wide ranging impacts on all generations. Time to heighten the conversation.

We’d love your thoughts and ideas.

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