The Longevity Imperative (draft)

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.