What If You Live to 120?Don Shaughnessy
In Arles France, on Monday 4 August 1997, Jeanne Calment died. I am sure that many other people died that day, but Jeanne Calment is special. When she died she was 122 years 164 days old. We should notice. If many of us live to 120 then our social services and ideas about what life should mean will change.
The ability to age successfully is more common than it was only a few decades ago, yet old norms remain. Retire at 65? Why? 130 years ago, 65 was ancient. In 1881 Bismarck in Germany, proposed mandatory retirement at 65 with government pensions. At that time life expectancy was less than 10 years. Today it is about 17 for males and over 20 for females. The similar retirement age today would be in the late 70′s.
It gets more challenging as we go forward. The US Department of health and Human Services has estimated that of all the people 65 or old in 2050, 10% will be more than 89. Today it is about 3%.
The Baby Boom demographic will last a long time and medical science could develop something that make us last much longer than the estimates. What if instead of 24% of people being over 65, in 2050 it turned out that 35% were and of those a quarter of them were over 89. Hopefully most of them will decide to keep working past 65 or 67 or whatever it becomes. Otherwise, financial Armageddon.
Being poor at 30 is not necessarily forever. Being poor at 90 is forever.
Society as a whole and people specifically will need to change attitudes and expectations. While there is no guarantee you will live to be 100, there is a higher probability than there used to be and that probability is growing.
Most people have the hope that they will live a long life. Some financial plans build in elements that assume death by the mid-80′s. Leveraged life insurance is one. Try to avoid plans wherein you get what you want and then are punished. Running out of money at life expectancy by design is not a wise strategy. On the other hand, maybe it does not matter. A typical 85 year-old will starve to death in less than 10 days. Build very long plans.
On a happier note, you could implement some of Jeanne Calment’s longevity tricks.
- Have some money. She made a life tenancy deal on her apartment at age 90 whereby she would get 2,500 francs per month for life and the buyer would get the apartment on her death. She outlived both the buyer and his wife.
- Be physically involved. She enjoyed tennis, swimming and cycling but apparently was neither athletic or particularly health conscious.
- Have interests. She enjoyed piano and took up fencing when she was 85.
- Watch your diet. She put olive oil on everything and enjoyed red wine.
- Get rid of bad habits. She quit smoking at 117 and gave up her weekly kilo of chocolate at 119.
- Be immune to stress. “If you can’t do anything about it, don’t worry about it.”
- Stay sharp and interested. Reply to a friend taking their leave at her 117th birthday party. Upon hearing the wish. “Until next year, perhaps.” she replied, “I don’t see why not! You don’t look so bad to me.”
Or maybe her explanation makes most sense. “Perhaps God has forgotten me.” If God forgets you, make sure you have the money and the excitement to enjoy your life.
Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.