Dr. L. Stephen Coles has a truly unique profession: He performs autopsies on supercentenarians — those 110 years or older — in an effort to learn the secrets of living long and resist the onward march of mortality.
But at an upcoming industry conference on the global future of retirement, the executive director of the Los Angeles Gerontology Research Group — a jack of numerous trades including medicine and demography — will be performing an autopsy of the world’s pension systems.
And just as surely as a heart attack can land a patient in the morgue, a too-early retirement age will be listed as a cause on America’s and the world’s death certificates if corrective action is not taken.
Because just as heart disease is often preventable through proper diet and exercise, Coles says the world’s financial problems are just as easily solvable.
“We need to raise the retirement age [currently 66] to 70 on a graduated scale — every year or so to increase it by a year … or our trust fund will go bankrupt,” Coles said in an interview with ThinkAdvisor.
The good news is that the solution is really as simple as that, according to Coles, a lecturer at the UCLA Molecular Biology Institute. With a steady stream of statistics, the demographer and gerontologist acknowledges that average life expectancy is increasing.
“In the U.S., there were 35 million people 65 or older in 2000, 50 million in 2010 and in 2030 there will be 70 million,” he says.
That said, “average life expectancy will increase, but maximum lifespan is unlikely to increase,” a scenario that insurance company actuaries have investigated.
“All actuaries who act as advisors to life insurance companies can see on tables that the most valuable predictors for average life expectancy is not the age of that individual but where they live, their gender and whether they’re smokers or not … and no insurance company I know of has gone bankrupt by using this method,” he says.
So while average life expectancy has indeed risen from 50 in 1900 to 87 in 2014, Coles, whose research group has been called the world’s authority on the population of people aged 110 or older, says the world’s 7.1 billion people contain just 71 validated supercentenarians.
And America’s wealth is sufficient to support this expanded senior demographic with merely the simplest financial planning.
“We can sustain it if there’s money in the bank — you have to do the necessary calculations to see the rate of new people that are living long enough to draw money from the [Social Security] trust fund,” Coles says.
“In the U.S. we have a pay-as-you-go system in which people pay into the system working till 65, then past age 66, people are taking money out of the system. If we make sure net withdrawals equal net input, we’re home free.”
While the solution seems simple enough, Coles is “skeptical” that the U.S. or other Western societies will make the necessary administrative changes any time soon.
“In Paris, there were riots in the streets,” he recalls of the 2010 French pension reform strikes in reaction to a government proposal to raise the normal retirement age from 65 to 67.
And he cites gridlock in the U.S., particularly Tea Party obstructionism, as a barrier to shoring up U.S. public finances any time soon.
“The longer we go without taking corrective action the harder it will be when we bump into this fiscal wall with trust funds going to zero,” Coles says.
In the meantime, seniors today face low bond yields and pension returns, resulting from quantitative easing, at a time of longer retirements, creating a perfect storm for Social Security and Medicare.
So what should the average person do to survive this storm?
“You need to deal with a financial advisor about what level of consumption you’re allowed to take so that you have something to give to your grandchildren,” he says, adding that today’s advisors would do well to increase their awareness of life and health insurance issues that come up for older people.
“People without any real assets to draw on wind up in nursing homes,” he says. “As a physician, I deal with nursing home patients and I see that some are in homes that are exquisite, others are middle of the road and others poor.”
Asked if today’s lower birth rates will compound the inadequacy of public finances, the demographer demurred.
“We think it’s actually a good thing. Just adding new population randomly to solve trust fund issues will cause more harm than good in terms of consumption of natural resources.”
Citing the linguist Noam Chomsky, who said at a public lecture that “human beings on the top end of Western societies are running as fast as they can toward self-destruction,” Coles concurred that fracking and other developments he regards as depredations of the environment are “going to be catastrophic; temperatures will raise due to global warming. We need to produce the proper amount of renewable energy sources,” he says.
While Coles is given to pondering “the sustainability equation” environmentally, financially, his day to day work involves mysteries of supercentenarian lives, and there, too, he has encountered a puzzling phenomenon.
Jeanne Calment, whose lifespan of 122 years is the oldest Coles’ group has documented, was a smoker.
So, too, another supercentenarian he met with at UCLA:
“In the middle of our interview she lifts up cigarette,” Coles recalls. “I said, ‘As a doctor I cannot approve of this bad behavior on your part,’” to whose gentle jibe his interlocutor replied: “What are you going to do about it? The last doctor who focused on that is dead.”
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