The 100 year life

Your writer has five grandchildren between the ages of two and five. On a recent holiday I read “The 100 year Life” by Gratton and Scott, two UK academics whose book is rapidly becoming a must-read.

For children born in the West today, there is more than a 50 per cent chance of living to be over 105. A century ago, there was less than a 1 per cent chance of living to that age.

This is not science fiction. If you are now 20, you have a 50 per cent chance of living to 100. If you are now 40, you have an even chance of reaching 95. If you are now 60, you have a 50 per cent chance of reaching 90 or more.

Q: Is this a blessing or a curse?

A: A blessing, according to the authors. Healthier lifestyles and rapid progress in medical treatments mean that many of today’s later onset illnesses will be controlled or disappear.

Q: How do you plan for such a long life span?

A: That’s the 64,000 dollar question.

Without realising it, we are used to thinking of life in three stages: Growing up and education to about age 20. Then working to 60-65. Then retiring and enjoying our free time, till frailty and ultimately our death. This is changing and it has already started.

Government policy is behind the curve, it must catch up.

Pensions were only ever meant to pay out for 10 to 15 years. As we saved through 40 years or more of our working life, it was achievable to fund our retirement. So how the heck do we fund 40 years of retirement?

Reality shows that many of today’s 60 to 80 year olds are not retiring. Many continue to work, often part time. They sell the skills they have built over the years and enjoy the best of both worlds. 

Flexible pensions allow them to take a smaller part of their pension and add earned income. They enjoy the sense of purpose of continued working, the social interaction with business colleagues, a satisfactory income, and yet some time to relax.

This is the new world of 60-80 year olds today. They need professional financial planning assistance to get this programme in motion. Government policy is behind the curve, it must catch up. Once you have drawn down even a small part of your retirement pension then incredibly low new pension contribution limits apply. Why shouldn’t you be able to top up your pension pot again?

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