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Retirement Planning > Saving for Retirement

Moshe Milevsky: Are You as 'Old' as You Think You Are?

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What happens when a 65-year-old baby boomer discovers they’re biologically a 45-year-old Gen Xer? Answer: After whooping it up, they’re ripe for a hefty retirement-plan overhaul.

The tantalizing notion of biological age is the focus of York University finance professor Moshe Milevsky’s new book, “Longevity Insurance for a Biological Age: Why Your Retirement Plan Shouldn’t Be Based on the Number of Times you Circled the Sun” (PiLECo Ventures-March 14, 2019).

In an interview with ThinkAdvisor, the annuity authority discusses how biological age, which he deems true age, can determine the best way to generate income for the rest of one’s life.

Scientific advances in testing have shown that the number of years you’ve lived and your biological age are not the same.

One way of measuring physiological age is by the length of telomeres, which are found at the ends of chromosomes. As biomarkers of aging, longer, as opposed to shorter, telomeres suggest a longer life expectancy. Another method is called DNA methylation, which looks at tissues and cells.

So, you can be younger than you think, and that finding would augur a longer life. Alternately, you can be older than you think, which, alas, would likely forecast the opposite.

In the former scenario, Milevsky points out, a client’s biological age and therefore longer life expectancy would set the stage for a change in asset allocation — probably a greater proportion of equities and, possibly, the purchase of an annuity.

Financial advisors who broach the subject of biological age with clients as early as now stand to differentiate themselves by being ahead of this particular curve, the professor stresses.

Indeed, the idea of biological age is a cool conversation starter that can lead to a more realistic dialogue about asset allocation and risk tolerance, he maintains.

Basing retirement planning on biological age will mean introduction of new types of age-appropriate products, and Social Security claiming strategies will change as well, Milevsky predicts.

A tenured professor at York’s Schulich School of Business who is also a member of the graduate faculty in mathematics and statistics, the Toronto native has given more than 1,000 keynote speeches and seminars worldwide and written 14 books. His newest tome is rooted in a scholarly paper he co-wrote in 2017: “Retirement Spending and Biological Age.”

ThinkAdvisor recently held a phone interview with Milevsky, who is managing director of consulting firm PiLECo and an occasional sales coach. He was speaking by phone from his office in Toronto a few days before leaving on a publicity tour to promote his book.

Besides writing books, which have been translated into six languages, the prolific professor has published more than 60 peer-reviewed scholarly papers, plus hundreds of consumer newspaper and magazine articles.

“I live on [writing] 1,000 words a day!” he enthuses.

Here are highlights of our interview:

THINKADVISOR: Suppose a person has characteristics related to aging, like macular degeneration, but others that are biologically younger than their chronological age? How is that balanced out in determining biological age?

MOSHE MILEVSKY: If you send some blood and saliva to a research firm in South Korea, they’ll send you a report saying that, maybe, your spleen is age 62; your lungs are 79; your liver is — God help us! — 97. Then they average all that out and come up with a combined number.

How far away are we from people identifying themselves by biological age instead of chronological age?

Within five years, I think people will start to associate themselves with their biological age. But I can assure you that if Apple or any other large technology firms embed the [necessary tech] in a phone or other device that we carry around — and I expect companies will — that enables us to measure our biological age, we’ll see it much faster.

Will defining age by biological age, instead of chronological age, bring new opportunities for financial advisors?

The advisors who are learning this conversation and will [bring it up] before clients ask them about it will be in a position to win. Eventually, it’s going to be about differentiating yourself and separating yourself from the pack.

What’s the “conversation”?

First it will often be about getting people to pay attention. The entry point is this novel idea of the difference between biological and chronological age. You start this way and then talk about the usual things like saving more, don’t retire early, don’t spend too much.

So the point is that advisors should learn about this for retirement-planning discussions?

Yes. Part of it is a marketing attempt to use the language of age as opposed to the language of good and bad heath. Nobody wants to say, “I’m in bad health.” Nobody wants to have a conversation about their medical condition with their stockbroker! So advisors should start using the language of biological age in conversations around retirement planning.

What would be an example? A client might ask, “I’m 65. Shouldn’t I have more bonds than stocks”? The advisor’s response could be, “You’re not 65; you’re really 52 biologically — so maybe you should have more stocks.” It makes conversations more efficient and creates a better link with the client. As a value proposition, it enables an advisor to keep a moat around their client base so that other advisors don’t take clients from you.

You’re a well-known proponent of annuities. Is the intention of your book to make a case for annuities?

The point of the book isn’t to promote annuities or to push a particular type of annuity. That’s sort of a side show. First, you have to accept the fact that you have a biological age and what that means for retirement planning. I really believe that, in order to position annuities.


It’s tough for someone who’s 60 chronologically to visualize buying an annuity because they might live to be 100. You’re asking them to take an action today that will help them in 30 years. It’s so far away in the future. That’s why we have the “annuity puzzle”: People don’t buy them voluntarily. But when you tell someone of 60 that they might actually be 45, it gets them thinking in a different direction: They’d better get some insurance because they’re much younger than their chronological age.

What do you suggest that an FA say specifically?

If the client asks, “What kind of insurance can I get?” the advisor can say, “Well, there’s a thing called an annuity, and it will protect you for the rest of your life because if indeed you’re much younger than your chronological age, it means that you’re going to live a long time — so you’d better have an annuity.”

Which type of annuity would be appropriate?

For example, a deferred annuity — an annuity that protects your lifetime income. Not an accumulation annuity.

But what if the client’s biological age turns out to be much older than their chronological age?

Then they shouldn’t buy an annuity because it’s not worth it. They’re not going to get much value from it.

How else will addressing biological age change financial planning?

I think there will be products geared toward biological age. Some will put people on a matrix: “This is appropriate for someone who’s 40 years old chronologically but 60 biologically.” Or: “This is appropriate for someone who’s 40 chronologically but 30 biologically.” It will become another spectrum on which we measure people.

What other changes might be expected?

Eventually, they’ll be a movement toward having retirement dates geared toward: “Don’t tell me a date at which you’re going to retire chronologically. Tell me a biological age that you plan to retire.” And Social Security claiming strategies will depend on your and your wife’s biological ages, not your chronological ages.

Anything else?

A lot of regulation is going to change, including [financial] penalties. Now people [typically] start Social Security at 65; at 70 they start pulling out money [of an IRA, for example] because of required minimum distributions. All such ages are chronologically based. In the future, compliance departments will have to adjust to the fact that chronological age isn’t the metric people are willing to use to define themselves.

How will this affect insurance companies?

Ultimately, they’ll have to be careful about product underwriting. If everybody knows a lot more about their mortality prospects, then insurance starts to become problematic [vis a vis risk].

What other way will biological age impact insurance firms?

They’ll use it to incentivize people to take care of themselves. Insurance companies want your biological age to be very young. So you can imagine premiums based on your biological age. They could take measurements every quarter or monthly, average them and say, “I’m sorry. Your biological age is creeping up. We’re going to have to increase your premium.” The client will say, “I’ll exercise more!”

You write about the possibility that younger people whose pensions are due to start as soon as they hit 65 biologically could try to game the system by fraudulently fooling the tests. How would that play out?

They’d have to dupe their blood, urine and saliva into showing they’re in much worse health than they actually are. I don’t think that’s feasible considering it would have to take place over a long period of time and would actually harm people. You’d have to tinker with your DNA and chromosomes.

“The 4% rule of retirement income planning completely ignores aging and longevity and can result in a large disruption in our standard of living,” you write. Please elaborate.

The 4% rule has been criticized for as long as it’s been around. Part of the problem is that it ignores our age entirely. So you just throw your hands up!

Have you had a test to determine your own biological age?

Yes. I’m 50 chronologically, and it came back that I’m 42 biologically. I’m thrilled to be eight years younger! Of course, some people don’t want to know their biological age.

One reason, I assume, is because it would mean facing their mortality.

I don’t like that word! It’s “biological age” — and that’s it. Behavioral economists taught us that language is so important when it comes to conversations around money.

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