We all want to live longer, we also want our partners, parents and grandparents to live longer.
Medical advances and better social care are making this possible giving greater life expectancy.
However the System in the form of pensions, elderly care, and just plain quality of life have not kept up.
Important decisions are being made, based on increased Life Expectancy which affect the retirement future.
Yet their effects in retirement do not appear to be fully understood, with many misconceptions.
Life expectancy is the time in which the population at a given age is halved.
Currently at age 65 for males this is 17.5 years and 20 years for females.
It tends to be misunderstood being taken as the time you can expect to live, whereas you have an even chance of living that long; for males your odds are 10 to 1 of living to 70 and 5 to 1 of living to 75.
The actual technical term is mortality rate, derived from birth, death and migration data, which is reducing.
Reduced mortality occurs from birth to death but its major effect occurs before retirement. The problem is therefore from the numbers entering retirement rather than increased longevity in retirement.
Mortality rates increase rapidly with age; the rate at 89 is ten times that at 65, which is ten times that at 39.
Projections of the population in retirement based on Life tables suggest these could increase over the next twenty five years by 50%, the majority of this, some 90%, from new entries.
However actual population figures show mortality rates some four times higher than life tables, which suggest future rates of increase much lower than this, due to historical reasons. Over the past 28 years the retired population has increased by 17%. Why the threefold increase?
Recent claims of the population number reaching age 100 by 2060 would require that no one currently between 50 and 65 would die over the next 50 years. A miraculous advance in the control of ageing.
There is confusion over increases in population overall and the effects in retirement.
If the population doubles over the next 50 years, the main rise will be in the under 65’s, creating problems in employment. If in work and saving for a pension then the effects in retirement are small.
The reaction has been one of panic - delay retirement; cut benefit; increase contributions and cut costs.
It pays no regard to the Social effects or the individual’s quality of life or needs in retirement.
The earlier you can retire the better, at 65 you have, at best, some ten years of active life before body parts start to wear out, from 75 on life slows down, you doze off in the afternoon and need to make an effort to do anything. The mind is willing but the body weak.
Forcing people to delay retirement and work is similar to forced child labour, depriving them and eroding precious life time, (from 65 to 70 some 10% will die). It should be a personal choice from age 55 onwards.
The real solution to the Pension crisis and longevity is an increase in pension self-sufficiency for those entering retirement, with a defined benefit and the flexibility to save more to retire early or continue work.
This suggests drastic changes in Pension provision by the State, Public and Private Sectors to make them more attractive, give value for money, better benefits and security in retirement.
Although a problem, increased life expectancy in retirement will have a much lower impact than the doom and gloom would suggest or the drastic reaction would merit. More on this in later blogs.
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