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Financially Secure At 100
• James Skinner
What a marvellous thought if we could live to be 100 years old. So many more things to do, places to visit, goals to achieve. Enjoying a fuller life by reading more books or pursuing new hobbies. Sharing joy and pain with more friends and family. Enriching one’s intellect and knowledge as the ultimate aim. On the whole it’s not a bad idea.
In order to accept this change in life span, health is essential. The extension of today's average age from 78/82 to 100 should include the prolongation of good health. The human fitness curve from birth to death should be unchanged.
It is recognised that humans about the age of 65 take, on average, five times more medicine that any other age group. Like for like, should we live to be a 100, this statistic alone would raise that healthy age peg to approximately 85 years old. Our National Health Service would cater for this statistical alteration.
Having said this, the real issue will be in sustaining a prolonged viable lifestyle similar to that of today’s society. This entails meeting all financial challenges related to everyday life. A focus on the alterations to the working versus retired population, (should we reach a century), is the key challenge that we would be faced with.
If we take a close look at what is today’s society, more and more people are retiring early. This is partially due to the dynamics of present working trends. The younger generation tends to progress at a faster pace. The productive contribution to the economy of an average person, therefore, is around 50 to 60 percent of his life. For the first 20 odd years he or she is in a training mode. From the age of approximately 25 to 55 a person enjoys a relatively fruitful and lucrative job or profession until the time arrives for retirement. This would vary between the ages 55 and 65.
These are today’s statistics. But before analysing the ‘what if’ situation regarding age extension, we need to take a look at what exactly is meant by working life and retired life. What are the basic differences and how do they affect the economy of a country?
Whilst a person is employed, self or otherwise, he is generating income, but what is more, he is contributing to the GNP of the nation. He is effectively ‘adding to’ the economy. The moment he retires, and without going into the details of public or private pensions schemes, he virtually stops producing and begins to ‘take from’ that same economy. In a nutshell, that is how the population maintains the balance of growth and wealth of a nation.
Returning to our utopia vision of living to score a century, two scenarios would have to be looked at.
First option would be an assumption that a human continues to work till 65 and then spends the rest of his 35 years in retirement. His productive life would effectively drop to 40 percent. Vital contributions to both National Insurance and pension schemes would stop. On the other hand, the system would have to continue paying out for an extra 20 years. The balance explained in the previous paragraph would be shattered. This would have a catastrophic effect on any developed nations’ economy. New generations entering the workforce would have to maintain a possible bankrupt pension system. In this option, the elderly are not extending their working life by those two extra decades.
The second option at face value would be the more attainable one. The working span would be increased for a further 15 to 20 years and raise the retirement age to 80 or 85. This would certainly relieve the burden on any pension scheme. On the contrary, because a person is in work for a longer period of time, contributions would be spread out. Pension options could be varied at different stages to take into account any political or economic upheavals during the working life of a person.
But how would this affect the workplace?
We would now have a glut of people working and others demanding work. More people for fewer jobs at the existing rate of economic growth. Or so it would seem. Several solutions, and these are not new, could be in line with Socialist doctrine. Reduction of working hours, part time work, splitting of jobs between more people are some solutions to the problem. Certain political parties may argue that these measures would have a negative effect on the economy. The other alternative would be the creation of a greater number of new jobs.
We have, in effect, an increase in the population available for work. This is also an increase in supply and demand. New jobs would, by default already be available to these ‘new’ geriatrics enjoying a greater life span. In effect, compatibility between the generations would have been created and some of the pitfalls mentioned earlier would have vanished.
Two other economical areas need to be mentioned to complete the economic picture of a greater life span. These are taxation and insurance.
Although it may seem strange, if people continued to work until the latter age, tax, with all its complexities would surprisingly be unaffected. Any government, regardless of it political convictions would be taking in the contributions in similar percentages as before. Statistically speaking, it would make no difference.
Insurance is another matter. As far as life insurance was concerned, the companies would have a virtual field day. The mere fact that human beings could live to a ripe old age of 100 would mean that contributions would span over a longer period of time. Payments due to death would still be at the same average rate. Unless monthly dues were reduced, they would be laughing all the way to the bank! That is until the government stepped in with new legislation to curtail abuse.
By and large, and provided good health prevailed, living to be 100 should enrich a nation and its population.
Related links:
Saga Magazine
Fiftyon