Will You Still Be Working at 90?

Old age ain't what it used to be.

Once upon a time, people retired at 62 — and were dead by 65.

That ancient time wasn't so long ago, actually; life expectancy in 1900 was 47!

Nowadays, it is increasingly common for people to work well beyond age 62. The interesting part is that people who are working in their 70s and 80s are often involved in careers that are completely unrelated to what they did for the first 40 years of their working lives.

All this is understandable. The health of the average 60-year-old is far better than it was for 60-somethings 50 years ago. Today's "young elders" are also very different culturally from past generations, and there are so many baby boomers (relative to the overall population) that their impact on society will be unprecedented.

One of the nation's leading experts on aging, Ken Dychtwald, PhD, has another name for this: the Age Wave, referring to the huge population and cultural shift he believes boomers will soon ignite. He’s written 16 books, including Age Wave: How the Most Important Trend of Our Time Will Change Your Future.

Below are edited excerpts of my radio interview with Ken.

Ken: You'll see nearly all basic products and services geared toward the needs of older people instead of toward youth as they are today. Folks in their 70s will be considered hip and cool, and you'll see a lot more people staying in their jobs far longer because they'll want the extra money or just because they like the work. If you can live to 80 or 90, then you're really in your prime in your late 50s or early 60s.

Ric: I don't think many people realize that yet. When new clients in their 40s or 50s come to discuss their financial future with us, we talk about two basic numbers: life expectancy and retirement age. Some will say they love what they’re doing and don’t ever want to retire — but they still think they'll retire in their 60s or 70s. When we tell them that we're going to assume that they'll live to 95, they almost universally reject that notion because they envision Whistler's Mother. They don’t want to be in a nursing home their last 20 years.

Ken: Well, let me pick up on a couple of those themes — the juicier ones. When we were kids, people in their 60s were "old" — they dressed old, acted old, talked old and felt old. They believed they were at the beginning of the end. But today people see vibrant 80-year-old actors in movies. They have relatives that old who are running marathons, and maybe they've got a sister-in-law who just remarried at 72. Now they're thinking: "That whole age thing is moving back. Maybe I won't quit in my 60s but will reinvent myself in a new career. Maybe I'll start a foundation — just look at Bill Gates, who stopped being a CEO to become a full-time philanthropist."

Ric: As financial advisors, we already believe that age 95 is probably too low a number to project for life expectancy. Clients now in their 50s are likely going to live even beyond 95. True?

Ken: Yes, I agree. Today the average life expectancy of a 50-year-old man is about 85; for a woman, a couple of years more. If you have a little more money than average, maybe add another three or four years. So 90 or even 95 right now is a pretty safe number. But keep in mind — that's decades from now. There will be breakthroughs between now and then that will boost the life expectancy another five, 10 or 15 years.

Ric: That's exactly my point.

Ken: And that brings me to your work. People are now starting to think about their lifetime income. Some fear outliving their money. Others say they won't live that long, but what if they do? No one wants to be broke the last five years of life, right?

Ric: That's the point we raise in the financial planning process. Even if you are dead set against the notion of living to 95, we have to assume you will live that long, because the alternative is much worse: being alive but broke. If you live to 95 but only planned to live to 90, you’ve got a problem.

Ken: Right, you don't want to have to call your grandchild and say, "Can you lend me a thousand dollars?" But that's what can happen if you don't plan financially to live longer.

Ric: Your most recent book is A New Purpose. Why that title?

Ken: Well, it struck me that there was a lot of attention being focused on how to live a long life and how much money you'll need, but nobody's asking questions like "What for?" or "Who or what do you want to be? What do you want to make of yourself when you're 70 or 80? What contributions can you make in your later years?” So I decided to write a book about all the possibilities life is now putting in front of us.

Ric: That's fascinating, because we are discovering, as financial advisors, that we spend more and more time with our clients talking about "life planning" as opposed to strictly financial planning. It's like we’re saying, "OK, we've nailed the part about how to create, manage and preserve wealth; now what are you going to do?" Once you no longer have a job where you spend 10 to 12 hours a day, then what? There's a big difference between not having to do anything and not having anything to do. So it sounds like your book focuses on that.

Ken: That was my intent. Stopping work for the purpose of having a leisurely life is fine for two or three years, but most people today don't want 25 or 30 years of that. They would find it boring, even deadly. So they're turning to their financial advisors and asking, "How do I set up a new company? How do I start a foundation? How do I take my money and make a better life for myself vs. just playing golf every day?"

Ric: Is that partly because of the innate human desire to participate, to contribute to society, to give back — as opposed to, as you say, just playing golf all day?

Ken: Yes, I think so. While people do want a break after 40 years of work, they don't want to be idle — especially those who are well-trained and skilled and who are used to getting things done. Thus more and more successful people are turning to their financial advisors and saying, "Let's not talk about me winding down. Let's talk about me reinventing myself. How do I do that?" I think we’re going to see some late bloomers … like the housewife who all of a sudden decides to go to law school, or the struggling entrepreneur who somehow finds that he or she is better running a charitable organization. This will be the new model of maturity.

Ric: What are the implications of all this for today's students? If you're headed to college, what should you study?

Ken: Well, the first thing I'd study is how to study — because you're likely going to have three to five careers in your life. Knowing how to reinvent yourself over and over will be a primary asset; so stay nimble on your feet in this Age Wave era.

Ric: Thank you, Ken.

Originally published in Inside Personal Finance September 2013

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