Financial advisors seeking to help clients prepare for retirement face the challenge that retirement itself is in flux. Changes in economic conditions, lifestyles, life and health expectancies and technological capabilities all promise — or threaten — to transform what retirement will be like, and how it will compare to people's hopes and expectations.
Some perspective on the future, of retirement and more, may be gained by reviewing past visions that turned out to be wrong or at least highly premature. One broad lesson of such retro-futures is that predictions of sweeping change often are overblown; another is that sweeping change, when it does occur, frequently bears little resemblance to predictions.
Consider the scenario below. Though it reads like science fiction, it is from a serious-minded report, with the sober title “Commercial Space Transportation Study,” that was presented to NASA by a consortium of aerospace companies in 1994 to assess various potential uses of space. One possibility raised was retirement in orbit:
“For long-term residences in space, the elderly may be some of the people who could benefit from living in reduced gravity conditions … Without the heavy weight of gravity pulling down on them, elderly people may find themselves far more self-sufficient than they were on Earth. If they were only able to get around a little in their room and dress themselves while on the ground, they may find that they are able to get around enough to completely take care of cleaning, cooking, or other chores. In some cases, they may want to perform some type of job. It is possible that very little staff would be required to maintain a retirement center in space because the tenants could care for themselves.”
The study weighed some pros and cons of space retirement: “Additional benefits to living in space would be the novelty of it, the great view, and the experience of renewed health because of reduced gravity. Psychologically, it would be necessary to screen tenants in order to avoid those with neurological problems. Another disadvantage would be proximity to friends and relations. It would be hoped that at least one close friend or relative could make the transfer to space living also, or that communications would be adequate for satisfying the tenant's need for old friends on Earth.”
When might space retirement get started? The year 2015! The report offered a scenario of “hundreds of people” living in orbit this year, many of them retirees. In reality, the number of people in orbit recently has stood at six (with no retirees). Moreover, NASA has relied on Russia to ferry astronauts to the International Space Station, since one thing that actually has been retired, not in space but from it, is the U.S. space shuttle fleet.
A number of companies, including Boeing and SpaceX, currently are working to develop a new generation of spacecraft aimed at making Earth orbit more accessible and affordable. Space enthusiasts, moreover, hope that future tech advances will in time allow settlements to be built on the moon, Mars and other celestial bodies. Still, anyone on Earth today who is entertaining thoughts of retiring in space would be well-advised to have a backup plan.
Robots for Retirees
Consider another futuristic retirement scenario: retirees getting help from household robots. Here's a description of that prospect from a 2014 article in the magazine U.S. News and World Report:
“In the not too distant future robots may play a role in the care of senior citizens. Researchers in the field of artificial intelligence have long dreamed of creating human-like intelligence in machines and empowering them to perceive their environment and take actions that solve problems. Robotics has been used for years in a variety of jobs across manufacturing and is even being employed to assist in surgical procedures. Given the growing numbers of seniors across the globe, a little help from our mechanical friends might ease the burden on caregivers and improve the quality of life for those cared for.”
Perhaps this scenario will end up in the same category of defunct or delayed visions as space retirement homes, along with personal jetpacks, too-cheap-to-meter nuclear energy and more. Robot servants, like these other potential products, are a longtime staple of science fiction; and (notwithstanding the self-propelled vacuum Roomba) their reality has fallen short of the hopes and hype of tech visionaries. Good robotic help remains hard to find.
Still, given current progress in robotics and computing, the idea of automated assistants aiding the elderly in coming decades does not seem so farfetched — and surely is a better bet than the retirement-in-orbit scenario. To get an early sense of how or whether this prospect is shaping up, keep an eye on Japan, a nation that has both a quickly aging population and a particular affinity for robots.
If robotic retirement aides do become a thing, financial advisors would do well to keep close tabs on the trend. For one thing, such a scenario would be a major investment opportunity, with attractive targets including robot makers and robo-services distributors. And making sure clients can pay for their robo-care (do their long-term policies cover it?) will become an advisory responsibility. Retirees with household robots might be a challenging client niche, though, as they seem likely also to be quite comfortable with robo-advisors. As always, human advisors will need to be creative to stay competitive amid tech transformation.
Technology's development is full of surprises. Consider video calling. Having been touted in sci-fi and futurism, it seemed for a time to be headed for a slot alongside flying cars in the scrapheap of unfulfilled visions. Many people apparently did not even want face-to-face contact while making phone calls.
Then video calling did become available, through Skype and other services, and now it has entered mainstream life. Part of its appeal, perhaps, is that it is often done via computer rather than being something people are expected to do anytime they are talking on the phone.
Certainly, video calling has had an effect on retirement, providing a new means for the elderly to stay in touch. (It is a key channel by which my 5-year-old son speaks to his out-of-state grandparents.) Various other impacts of the information revolution also have given retirees new ways of doing things — the ability to order groceries online, for instance, or to easily look up the backgrounds of doctors and other professionals (including, advisor reader, yourself).
Technology already is transforming retirement. Keeping an eye on its impacts will be a growing part of the job of retirement-focused advisors, even if helping clients get a room with a great orbital view does not seem to be in the cards anytime soon.
--- Check out 5 Sci-fi Trends in Wealth Management