Pew Research Center projects that by 2050 one out of every five Americans will be age 65 or older. According to the MacArthur Research Network on an Aging Society, by 2050 women will live on average to 89-94 years of age and men will live to 83-86. This is higher than the government’s current projection of 83-85 for women and 80 for men, mainly due what the group believes is the government’s underestimation of advances in biotechnology.
For a society, the economic implications are enormous. Just a few years longer in average lifespan will increase spending $3.2 to $8.3 trillion more in today’s dollars.
Humans are living longer, but what does that mean when it comes to financial planning?
The aging concept of retirement is about pulling back--taking vacations, golfing, riding bicycles. However with longer lifespans, people may want a more active retirement strategy. The question will be how to anticipate not just the expenses for this entirely new life stage that is uncharted territory.
Financial advisors will need to become “longevity navigators.” They will need to provide retirement solutions, not just money-making plans or products. People’s needs will vary and expand as lifespans increase: contractors who know how to remodel an aging-friendly kitchen; transportation options for aging residents in the suburbs; downsizing consultants. Technology will aid people even more--there will be a new budget titled “Tech enabled” for technology use in the home.
Ultimately, financial planning will look even more relationship-oriented than it currently is. Robo advising services will supplement a financial advisor’s strategy, but not overtake it. Advisors will need to be even more empathetic to their client’s needs and proactive to creating successful strategies as aging slows.
Furthermore, as women take an even larger lead in financial decisions among U.S. households, it is important they have an advisor who listens to them and makes them feel respected.
TABER Asset Management in a fiduciary based registered investment advisory located in Des Moines, IA.. Please call 515-557-1860 or email us at firstname.lastname@example.org to inquire about our investment management and financial planning services.