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6 Planning Points to Help Clients Live Long and Prosper: Morningstar

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What You Need to Know

  • Since 1900, there has been a 68% increase in average life expectancy, from 47 to 79 years.
  • COVID-19 did reduce life expectancy in the U.S., but it doesn't mean we’ve reached the limits of how long we can live.
  • Saying that people are living too long emphasizes the wrong problem. The problem is we aren’t changing fast enough, Carstensen says.

In the past 120 years, U.S. life expectancy has grown dramatically. Morningstar’s Christine Benz, director of personal investment, and Jeffrey Ptak, chief ratings officer, explored this topic in a recent interview with Laura Carstensen, psychologist and director of the Stanford Center on Longevity, on the podcast “The Long View.”

Indeed, since 1900, there has been a 68% increase in average life expectancy, from 47 years at birth to 78.9 years at birth in 2014. While life expectancy has dipped since then, to 77.8 years in the first half of 2020 — likely due to the opioid crisis and COVID-19 — Carstensen has a long-term, optimistic view of longevity.

“Make no mistake, I believe longer life can, and I believe will, improve the quality of life at all ages,” she said in a 2011 TED Talk.

In that speech, she explained that since 1900, we have “nearly doubled” the life expectancy, which is more than has happened than in the last two millennia. Over the same time period, she added, the fertility rate has dropped, so an age distribution that used to be shaped as a triangle with young people on the bottom is now a rectangle.

In her interview with Benz and Ptak, she discussed behavior that affects lifestyle as well as how wealth can help add to one’s life span. But in the end, even the healthy and wealthy can’t avoid the Grim Reaper.

Here are some points she made in the discussion that advisors can think about when helping clients plan their future.

1. Avoid the Usual Suspects, and Don’t Rely on Genes

Yes, staying healthy includes not smoking and limiting alcohol, as well as getting exercise and having good genes. She noted, however, that “we have learned that genes are not as important as we thought they were to life expectancy. The way we live our lives, lifestyles, contribute much more to how long we live.”

2. Have a Purpose in Life

As she said in the Morningstar interview, “one of the surprising contributors to life expectancy … has been purpose in life. Those people who feel like they matter to a cause or to other people, to their families, those people who have a real sense of strong purpose, live longer than people who don’t. … The people who say, ‘There’s a reason for me being here,’ are [the] ones who do better and live longer.”

3. Education Has More Impact on Longevity Than Wealth

How does wealth factor into longevity? Typically with higher education levels, Carstensen said. “People who have high levels of education are more likely to have higher incomes,” she said. She added that wealth helps those who get sick, “but education seems to be a better predictor than money for staying healthy. But once you get sick, as most of us do at some point in life, then wealth/income predicts better than education, how quickly you will decline.”

4. Perhaps It Should Be ‘Prosper and Live Long’

Wealth has an impact, Carstensen says, but there is conflicting literature on “how much money contributes to life expectancies.” She told Benz and Ptak that some studies show that once one gets beyond the upper class, “you don’t see a lot of increase as you get into the very wealthy.” Others say that for every $10,000 of annual income, people live longer.

The ones who are really at risk are those who live “in austere poverty,” she said.

5. COVID-19 Has Affected Life Expectancy

Carstensen acknowledged that COVID-19 did reduce life expectancy in the United States, but “there is some misunderstanding about that,” she said. “Some people have taken this decline in life expectancy as somehow meaning that we’ve reached the limits of how long we can live. And now we’re even seeing it tick down.”

However, she said that most of the decline in the United States is “being driven by subpopulations, mostly in the Appalachian regions, some southern parts of the country, where we see high rates of drug use and poverty. And we also see higher rates of homicide and suicide.”

She added that ”if we think of [the decline in life expectancy] as just an average, we’re putting in more low numbers into that set of numbers that we calculate the average, and these are due to preventable kinds of problems and consequences.”

6. Living Longer Means Policy Needs to Keep Up

Carstensen doesn’t see a downside to living longer. In her discussion with Benz and Ptak, she pointed out that “what our ancestors did in the 20th century was really reduce premature death … so now people are having a chance to live out their lives,” and have an extra 30 years. “It means more time to chase our dreams and realize our goals and spend [more time] with loved ones.”

Culture also makes a difference to this longer life, such as how much money is saved, how long we work and when we retire, but programs such as Social Security and Medicare are also key.

But one issue today is that the 20th century premise that there will always be more young people. “That’s our problem today … [this] mismatch between policies and the demography,” she said.

The “rectangularized age distribution” needs to be the new base considering our aging population, she said. “There is a crisis on the horizon. … If we do nothing, if we don’t change the way we live, if we don’t rethink these policies or practices, we’re in trouble. But to say we’re living too long … is putting the emphasis on the wrong problem. The problem is we aren’t changing fast enough.”