People are hardwired for short-term thinking, posing a challenge to long-term planning.
“We find it difficult to think too far ahead and take steps today that have benefits far into the future,” says Andrew J. Scott, author of the new book “The Longevity Imperative: How to Build a Healthier and More Productive Society to Support Our Longer Lives.”
“But this is not about sacrificing your earlier years in return for healthy, more prosperous later years. Want to take time off now to travel? That is fine if you can work for another year later on.”
Here’s what Scott recently told Yahoo Finance about why people need to take the possibility of longer lives seriously, edited for length and clarity:
Andrew, why did you write this book now?
This topic still doesn’t get enough coverage. It’s a trend that I think we’ve got wrong. We focus too much on an aging society, which is always about decline and problems. And I think we need to focus on a new reality, which is that the younger middle age could now expect to become old, and 50% of children born in the US can expect to live into the late 80s or early 90s. So we have to seize the opportunities longer lives make — not just longer, but healthier and productive for longer.
What do you mean by the term “longevity imperative?”
First, we are now likely to become very old. That used to be a minority outcome. Now, it’s a majority. Two, we fear getting old. We worry about outliving our health, our finances, our skills, our relationships, our sense of purpose. So put those two together, and you get the imperative. What are you going to do now to maximize your chances of aging? You can change how you age when you’re 80, but it’s a lot easier to do it when you’re 50, 40, or 30.
What’s the difference between an aging society and a longevity society?
An aging society is always negative. The focus is on decline and the end of life. Longevity society says you have more time ahead of you. What do you want to do with that time?
So, how do we pay for longer lives? And what does this mean for our careers and how we manage them?
We’ve got to be productive for longer and work for longer. And it’s very hard to sugarcoat that pill. You’ve got to think, how do I work for longer? And that, of course, is about your health. It’s about your skills. It’s also about what occupation you’re doing. Does your current occupation let you carry on working? Will your firm support you? And do you want to carry on working longer? Should you consider a big career change now because you will have to think about working for longer. This isn’t just some abstract concept. It’s a very real issue.
How can we mix it up to make aging great?
In the 20th century, we created the three stages of life— education, work, retirement. And that work was often a linear career path. You are probably not going to have those three stages of life now. What we’ll start doing is taking more leisure time on this side of retirement.
So your last job might be part-time, or you’ll take a career break. Maybe you’ll start work later in life. You may have several stages in your career.
Sometimes, you may be focused just on money and working very hard. Other time you spend caring for family and parents or children. There will be a multi-stage life with different aims.And that’s where I think the mixing up comes in. There may be a time when you’re no longer earning as much as you used to, but that’s OK because you are taking a job that suits you better. It may be that you used to be in charge of things and now you are not. But that’s OK. It doesn’t matter if your income is less at times if you’re still earning over a longer life, because it’s the amount of money you earn over your lifetime that matters more.
Read more: Retirement planning: A step-by-step guide
Should we retire retirement?
I think retirement has already disappeared. The idea that everyone comes to a hard stop at the same age has already gone. Some people are working full time, some go part time, some retire and they unretire. People age in very diverse ways.
If we’re going to live longer, what should people be thinking about in terms of their financial behavior?
It’s a really complicated problem. I wish I could give a simple answer. It’s really managing your career, making sure you’ve got the skills to carry on working. And I think that’s the key thing because whatever shocks happen — and shocks happen in life. We’re living longer, but there will be a health shock, there may be a divorce shock, there may be a job shock. And if you’ve got the human capital to go back out and earn again, that solves a lot of financial problems.
I thought the statistics about who really does benefit from the longevity bonus is fascinating. What’s behind that?
We all want to slow down aging, but we found a way to speed up aging, which is poverty. To me, that is the greatest indicator of how we age. It’s important to realize how life expectancy in America depends a great deal on where exactly you lie on a frighteningly broad spectrum of social status. The gap in life expectancy between the richest 1% and the poorest 1% is 15 years for men and 10 years for women.
What are the intangibles in our financial lives we should consider?
A long life is about time, and it’s about how you use your time at different stages in life. Money is a way to do that. Lots of people get freaked out by financial planning because they’re not comfortable with numbers. But everyone plans with time every day. First of all, you have to explore what do I want to do over my life? When do I want to work? What do I want to do in retirement? If you’re living a longer life and all you do is just work for longer, that solves your financial problem. But it doesn’t solve the real problem.
You have to think about whether you are investing in your productive assets, by which I mean your human capital and skills and knowledge that you can carry on working the way you want. Then there are your vitality assets. And these are sort of two types. They’re your health and your friendships. By health, I mean physical and mental health. Finally there’s your ability to deal with change.
You sum it all up with the idea that the key to a better, longer life is relationships and human connection. Can you share more about that sentiment?
I’m an economist. I talk about health, science, and economics. There’s this technocratic side, but why do we want to live a good life and what makes it a good life? We are social creatures. And I’ve learned from studying this that if I really want to be happy and fulfilled, it’s relationships.
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