Longevity and the New Retirement Landscape

Transcription

1

2 Longevity and the New Retirement Landscape Paul Irving Chairman, Milken Institute Center for the Future of Aging Distinguished Scholar in Residence, USC Davis School of Gerontology

3 Great achievements in history Invention of the wheel Development of agriculture The printing press Copernican revolution Industrial and technology revolutions Extension of life expectancy

4 What caused the increase? Vastly improved sanitation Development of antibiotics Implementation of vaccines Progress against heart disease Investment in bioscience research

5 Cheers! In 1917, King George V sent a congratulary birthday telegram to every citizen of the British Empire who was at least 100 years old. He sent telegrams to 7 men and 17 women. Source: The British Monarchy; Office for National Statistics

6 How many centenarian telegrams did Queen Elizabeth II send in 2011? a. 500 b. 2,500 c. 5,000 d. 10,000 e. 20,000 Source: The British Monarchy; Office for National Statistics

7 Global proportion of the population 60 + Source: Help Age USA Global Age Watch Index

8 Global life expectancy will increase Source: United States Census Bureau, The United Nations

9 Social Security When Social Security was introduced in 1935 The average life span in the U.S. was 61.7 years. Source: U.S. Census Bureau, Statistical Abstract of the United States

10 Increasing diversity in the older U.S. population Population 65+ by race and ethnicity Source: U.S. Census Bureau

11 The great challenges of aging Health Financial Security Purpose

12 Financial burden of disease The total impact of chronic diseases on the U.S. economy including treatment costs and lost productivity is estimated to be $1.3 trillion annually In 2015 total payments for health care, long-term care and hospice for Alzheimer s and other dementias will cost the U.S. $226 billion A 65 year old couple retiring in the U.S. will need an estimated average of $220,000 (in 2014 dollars) to cover medical expenses throughout retirement Source: Milken Institute, Alzheimer's Association, Fidelity

13 Majority of pre-retirees have less than $100k Pre-retiree (age 55-70) households by financial asset levels Source: LIMRA

14 The devolving retirement savings landscape: Change from defined benefit to defined contribution Decrease in sponsorship from employers Low participation Source: Journal of Pension Benefits

15

16 Retirement and disengagement should be packaged with a warning label, saying this is something you may not want to consume. -David Bornstein, Solutions Journalism Network and the New York Times Source: Kauffman Foundation

17 Retirement expectations are changing 65 percent of Baby Boomers plan to work past age 65 or do not plan to retire Source: Transamerica Center for Retirement Studies

18 Older workers still excited about their work Percent of respondents age who agree with statements I am proud to work for my company 91 I am continuing to grow in my work 87 My job is an important part of who I am 83 There is a lot I still plan to accomplish 79 Percent Source: Transamerica Center for Retirement Studies

19 Purpose improves healthspan and lifespan Rush University Medical Center concluded that people with a high level of purpose were 1.5 times more likely to remain free of cognitive decline and 2.4 times more likely to remain free of Alzheimer s disease. Multiple studies show that individuals with meaningful purpose live longer and have a more positive outlook. Yale University found that older individuals with positive selfperceptions of aging lived 7.5 years longer. Sources: Archives of General Psychiatry, Psychological Science, Journal of Intergenerational Relationships, The American Journal of Geriatric Psychiatry, Journal of Personal and Social Psychology

20 Baby Boomers vision out of sync with employer realities Source: Transamerica Center for Retirement Studies

21 Ageism is a problem Americans age who experienced discrimination within the past 5 years Source: AARP

22

23

24

25 I d rather be dead than singing Satisfaction when I m 45. Mick Jagger 22 Mick Jagger 72

26 More older Americans are becoming entrepreneurs Percent of new ventures by founder age group , 24% 55-64, 14% 20-34, 35% 55-64, 23.4% 20-34, 26.2% 35-44, 27% 45-54, 26.3% 35-44, 24.2% Source: Kauffman Foundation

27 If the U.S. longevity economy was a country Global comparison in 2012 GDP $ trillions US 16.2 China 9.1 Longevity Economy 7.1 Japan 4.9 Germany 3.5 France 2.7 Source: Oxford Economics

28 Encore Careers Older adults are a powerful source of talent with the skills, experience and wisdom to tackle society s urgent challenges. They increasingly seek opportunities combining work, service and social impact. 9 Million currently in encore careers 31 Million interested in encore careers Source: Encore.org, MetLife Foundation

29 Lifelong Learning

30 Older adults 65+ online 1 in 3 boomers shop online (spending $7 billion). 1 in 2 boomers are on Facebook 90 percent with an annual household income of $75,000 or more are online 87 percent with a college degree are online Source: Nielsen, PEW Research Center

31 U.S. Millennials Largest (83.1 million), most diverse, most educated generation Digital natives Low on social trust but optimistic about the future of the U.S. 69 percent don t feel they earn enough to lead the lifestyle they want; 88 percent think they ll earn enough in the future Source: White House Council of Economic Advisors, PEW Research Center, Nielsen

32 Challenges for Millennials More student debt, poverty, unemployment, lower levels of wealth and personal income than Xers and Boomers had at the same stage, according to PEW. 56 percent say they are living paycheck to paycheck and are unable to save according to Wells Fargo. Negative 2 percent savings rate in 2014, according to Moody s. 26 percent living in their parents homes in Homeownership for under 35s dropped to 36.2 percent in 2014, according to PEW - lowest level since the U.S. Census Bureau began reporting ownership by age. Source: PEW Research Center, Wells Fargo, Moody s Analytics

33

34 For your consideration Savings and investment are for more than days on the golf course and walks in the sand they re about engagement, health, productivity, learning, and purpose. Re-think the retirement narrative for Boomers, Xers and Millennials. One size doesn t fit all customization, often employing tools of technology, will win the battle for attention, loyalty (and AUM). Increasing longevity will change lives forever will the financial services industry lead?

35 We are continually faced with a series of great opportunities brilliantly disguised as insoluble problems. -John W. Gardner Founder, Common Cause, Experience Corps, PBS, former Secretary of Health, Education and Welfare (HHS)

36

37 Thank Center for the Future of Aging

38 Longevity and the New Retirement Landscape Paul Irving Chairman, Milken Institute Center for the Future of Aging Distinguished Scholar in Residence, USC Davis School of Gerontology

39