The Longevity Imperative
• Lifespans are increasing.
• Healthspans and workspans are not keeping up.
Implications:
o Impact on personal finances.
Will our personal savings and defined contribution pensions be sufficient for our extended lives beyond work and contingencies?
o Impact on public finances.
What will happen to the solvency of public pensions and what will it mean for payouts and contributions?
What is the impact on public healthcare in terms of costs and quality of care?
What is the impact on tax revenues and on the ability to fund public services?
What is the impact on interest rates, term premia, and the ability to raise and service public debt?
o Impact on the economy.
What is the impact on savings rates and thereby on the ability to service public debt?
What is the impact on the labour market?
Will older workers displace younger ones causing greater youth unemployment? What are the social implications?
What is the impact on the size and quality of the labour force?
• Other implications
o Will retirement ages have to rise? Almost surely.
Prescriptions and solutions:
• Lengthening healthspans
o Improve health through healthier lifestyle.
o Improve health through medications and therapies.
o Improve access to healthcare.
o Does work improve health? Answer this question.
• Lengthening workspans.
o Human resource regulations to address ageism.
o Retrain to remain economically relevant.
o Delay and defer retirement.
• Fiscal sustainability
o Raise GST.
o Impose land taxes.
o Consider wealth taxes. This can be complicated.
o Raise retirement ages to match lifespans. This is politically challenging but will have a significant impact.
• Economy
o Provide retraining and continuing education opportunities to match skills with abilities and needs.
o Use of technology such as AI and automation to extend the capabilities of human beings and not just replace them.
o The strategic balance of defined benefit and defined contribution pensions to provide for retirement and contingencies.
o Reform of defined benefit pensions schemes and social security. Back to solvency and adequacy.
o Reform of defined contribution pension schemes and regulation and development of personal financial industry.
• Others:
Areas for investment
• Healthy living.
o Preventative medicine.
o Fitness and activity.
o Diet and nutrition.
• Medicine.
o New medicines such as GLP1.
• Personal finance
o Savings and investment products aimed at longer lifespans.