Longevity Is Going To Crush Retirement Plans
The longevity movement, according to its supporters, is alive and well. Many believe that we will see major breakthroughs in technology that will extend the lives of people by many decades.
While there is great debate as to whether we can eclipse the 120 year old mark, many believe that will we see a large number of people in coming decades pushing the 100 year level.
This is in keeping with the advancements that were made already. However, if one believe that everything is information, then the advancements we make in that area will end up extending to biology.
Certainly this would be welcomed news for individuals, it brings on a host of financial issues.
Retirement plans are already woefully underfunded. Many, if not all pension funds, find themselves short of the required assets needed to pay their future obligations. Then there are the individuals who are lacking the money, especially in the United States, to retire with the expected lifespan as it is now.
Life insurance policies are based upon actuarial tables. If these shift radically, things will really be upset.
Presently, there are more centurians than ever before. This is mirrored by every age group of seniors. Throughout the world, we are facing aging populations as declining birth rates are being offset by people living longer. From an economic perspective, this is exactly the opposite that is required.
With less people of working age who are paying into the system along with more people taking from it, we can see how governments and private funds will find themselves in an upside-down situation.
Of course, for those who are self funding their retirement through their own contributions, are they in a position to be able to handle living another couple decades?
Considering that most, at least in the United States, are already in trouble regarding their retirement, the answer is obviously no.
The radical life extension is not going to have much impact on those in their 70s already. They will miss any gains that are made. However, this is not true for those in their 40s and below. Those age brackets have a good possibility of gaining some extra years due to breakthroughs.
Fortunately, these are the ones who should have the time to fund their retirement plans. The challenge is that, like those ahead of them, they are already falling behind.
Working out way down to the Millennials, the age group that should be able to best fund things long term, they are having problems getting started. Many of them are already burdened with student loans meaning that a portion of their cashflow is going to debt repayment.
Then we have to consider that many cannot find good paying jobs as the wage market is tough due to the threat of automation. Here we see added pressure on them in terms of setting aside money for later in life.
We also have the variable about the trust people have in markets. What we saw the last couple of months is that the average investors is playing short-handed when it comes to this arena. The major institutions are jumping people's trades in an effort to scalp a few percentages off each trade.
Over time, this adds up a lot of money being siphoned from the retail investors.
Perhaps crypto will help the younger generations. They are the ones more apt to get involved as compared to the older ones. This could well set up to be a great approach considering the explosive growth rate.
Society is facing major changes due to demographics. As we get older, automation is going to have to step in to make up for a lot of shortcomings. Elderly people require care, something that could be difficult to do with humans in an inverted society based upon age.
What will thinks look like if the life expectancy shoots up over 90 in the next couple decades? We are already ill-prepared as things stand now.
The longevity could crush what is left of retirement plans.
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