May 13, 2011

Planning Our Future, Before We Get Too Old

Boomers will need to shape their future by saving enough, planning well and managing their resources in order to become less vulnerable

The Boston Globe published a fascinating piece in early May called The Future of Old.  Its starting point is a familiar one to those involved in retirement planning – changing demographics:  “Demographers predict that by 2030, average life expectancy will have climbed past 80 and people over 65 will account for more than 20 percent of the country’s population.” 

The consequences of these changes will, of course, be substantial:  “As America grows increasingly gray, the needs and desires of the elderly will become a more important and more visible part of the culture – and the years after age 65 will account for an increasingly large portion of our lives,” wrote newspaper reporter Leon Neyfack.

So what will this new old age look like?  One key factor will be that “’[r]etirement’ in today’s sense is likely to shrivel and be pushed later into life.”  

Some experts even expect a new phase of life to emerge:  “Just as adolescence became a household concept in the early 20th century that was shorthand for a whole set of behaviors, desires, and difficulties, so too will this as-yet-unnamed period — starting somewhere around 55 and continuing roughly through one’s mid-80s — become synonymous with a particular mode of life, a sort of second adulthood during which a person is not only active and autonomous but motivated by new professional and personal goals,” explains Neyfack. 

And, not surprisingly, there is much hope placed on technology’s ability to impact and alter the future of aging for the better.

But amidst hopes for better and more fulfilling senior years are major concerns too, beginning with health care:  “There are still unknowns, such as how and whether America will keep funding the health care system the old now count on, or whether the prevalence of dementia will continue to grow or be vanquished by medicine.”  Indeed, “43 percent of people over 85 show symptoms of Alzheimer’s disease.” 

Moreover, money and thus retirement planning is crucial in that “the most promising changes up ahead will only be within reach of those who can afford them.” 

According to the article, at least implicitly, things are so bad that the whole system will need to be overhauled:  “the affordability of retirement — the extent to which the 20th-century benefits contract with old people will survive — is ultimately an issue that has to be worked out politically. To the extent that it depends on postponing benefits and rationing health care for retirees, that question will be harder, not easier, to solve as the politically powerful boomer generation fills out the ranks of retirees.”

I suspect that we Boomers will also have to come to grips with the reality that this “social contract” is really something we created for ourselves and foisted upon our children without their input and consent.  The extent to which they accept that burden remains an open and difficult question.

Obviously, the extent to which we boomers take charge of our own futures by saving enough, planning well and managing our resources appropriately will go a long way toward helping us become less vulnerable to the vagaries of political fortune and expediency (not to mention economic realities). 

How well we do individually and how well our industry does in motivating and serving our various constituencies will speak volumes about our own personal futures and the future of our country as a whole.

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