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Apr 05 2011

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Extreme Longevity: Exploring Retirement and Social Implications

If you do a little reading or googling, you will see a marked increase in announcements having to do with medical advances in curing and preventing disease. Many new exciting treatments are coming within the next few years due to the convergences of technology and medical sciences.   Many announcements also have implications to extending human lifespan.  This is real, folks. But what will extreme longevity  mean to us and to society?

Extreme Longevity’s Retirement Planning Implications

In this earlier post  [ Elements of Your Retirement Plan ] I raised some of the key questions that extreme longevity will  soon pose to anyone doing  Retirement Planning.  Indications are that in 10 to 20 years  all the emerging medical advances will mean that not only will we live a long, long time … but we will live it in excellent health!   This transition will occur in steps, and will have many financial implications to individuals.

For instance, intially the coming explosion in medical advances will mean we will be able to cure and prevent most of the big diseases. This means more older people living longer.  Still, until the medical advances are wide-ranging, the prospects of living to 110 and beyond will put a big strain on personal finances.  We will need and want more money to fund emerging treatments and cures not yet covered by medical plans.

Not convinced?  Imagine a few years into the future. You are 72 years old and you develop an inoperable brain tumour.  Doctors give you only a few months to live. Then you hear that a new drug that targets and dissolves your tumour gets approved in Columbia.  Will you spend the $70,000 it will take to get a cure?  It used to be that many people would say, “No! I’ve lived a full life and I don’t want to exhaust my spouse’s nest egg just so I could live a few more years.”  BUT, in a few years, the headlines will be full of amazing medical advances. Most diseases are soon curable.  Supplements and drugs are even reversing the effects of aging! Gene therapies and stem cell innovations are making us look and feel great.  Now don’t you think many more would say “Yes, let’ do it! I’ll start a business later to help fund our expenses and tennis club dues.”

Retirement income will need to last much much longer. Sources of retirement income such as private and government pension plans may need to get scaled back. Those without ample finances and able to earn an income, will likely need to consider continuing to work – or going back to work.  The kids will need to stop calculating their upcoming inheritances (or course there is always that lottery fantasy…).

Extreme Longevity’s  Societal Implications

Canada’s medical system already has some holes in it with long waiting times, hospital and doctor shortages, and many new drugs not covered.  In the US, the medical system is already vastly underfunded. How much more strain is possible?  On the other hand, there will definitely be some savings as future medical cures and preventative medicine reduces the frequency of long, drawn-out expensive hospital care.

Private pension plans and Government funded pensions (like Canadas Old Age Security and Social Security in the US) are designed to pay out lifetime, and sometimes inflation-indexed incomes.  But pensions are not designed to pay out to retirees for 50 or 80+ years! This is especially true given the baby-boom demographics of a much smaller working population behind the boomer to pay into the plans.

The miracle of compounding will have longer to work it’s magic. The rich will get richer – if they can avoid the  creative-destruction of technology’s advances and the big claws of inflation and government taxation. Income disparity, which continues to cause much social disruption and unrest, will likely widen.  Will the poor get poorer?  The internet levels the field in terms of access to information and knowledge. The current extraordinary advances in water filtration will soon introduce much wider access to cheap, clean water. These and other innovations could mean rapid progress in alleviating extreme poverty.

While longer lifespans brings with it an increase in global population, environmental technologies may prevent what many think is inevitable environmental degradation.

This is all pretty amazing stuff.  A regular slap to one’s face is necessary to realize – it is happening now.

…more discussion on implications soon….  Make sure you enter your email in the Subcribe By Email box at the right to get notified of future articles. 

Michael

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