Living past age 100

Do you think that you will live past the age of 100? If you’re under the age of 35 today, odds are that you will.

I am writing this week’s column on my long flight home from this year’s global meeting of the financial planning profession where I was honored to attend and represent Canada.

Each year, the leaders of the professional bodies of each member country meet at a different host’s location to share best practices, common struggles and new research in the financial planning world.

A very interesting part of this year’s discussion was on how financial planning needs to evolve in the face of continuously increasing life expectancies. In the past, the financial planning process was somewhat easier to predict through your working years (roughly 40-45 years) and your retirement years (20 years or so).

But the above assumed that you would pass away in your early to mid-eighties at most. As people started to live longer, financial plans began building in a cushion of sorts in case the retiree lived into their 90’s. But what about now when we’re predicting the bulk of the next generation to live to at least 105 years of age?

Current retirement methodology simply won’t keep up. Unless deep seated social change occurs, a longer lifespan will be viewed as a curse and not a gift for many. The bulk of our population will not be able to retire at the same age that our parents and grandparents did and may have to work until their physical and mental capacity no longer allows for an enjoyable retirement stage.

The answer is more complex than simply adding a few extra years of retirement income needs. The entire life cycle needs to be rethought at some stage. People may no longer view age 65 as the “standard” retirement age and many may want or need to work well into their 80’s or even their 90’s.

The basic cycle of go to school, work and then retire may need to be re-thought as well if people have any hope of enjoying some of their golden years. Some new plans may include a retirement “break” of sorts from age 60-70 and then go back to work for another 20 years or other such ideas that are not currently part of the normal work-life structure.

Recent mortality studies have estimated that over 50% of those Canadians born in 2007 will live past the age of 104 and this number keeps climbing each year. Will this next generation continue to follow the retirement path that their grandparents took? Or will they start making changes at an early age to adapt this traditional way of thinking?

Individuals, companies and governments all have a role to play in ensuring we structure our lives differently, so we can make the most of a longer life. I hope that the younger part of our population takes heed to this issue now so that they can begin to plan for what the new normal will bring because at the end of the day, it falls on you to ensure your longer lifespan is a gift and not a curse.