Longer lifespans are causing individuals, governments and business leaders to rethink their approach to work and retirement.
Life expectancy increased from an average of 46 to 73 years between 1950 and 2019 and the United Nations forecasts further increases, estimating that global average life expectancy will reach about 81 years by 2100.
Living Longer, Better: Understanding Longevity Literacy, a new World Economic Forum report, in collaboration with Mercer, a business of Marsh McLennan, explores how lengthening lifespans are reshaping how individuals view their working lives and retirement.
The report offers recommendations for government and employers to ensure they are adequately supporting people in multiple stages of work and retirement.
A statement from the WEF says the report highlights purpose and quality of life in addition to financial health and resilience – themes that are traditionally associated with retirement planning.
Haleh Nazeri of the WEF says that when it comes to longevity and living longer, healthier lives, everyone has a role on this critical topic.
“How will business support an older workforce and one with growing caregiving needs, what will policymakers do to help all citizens reach retirement equity, and finally, what can individuals do at every life stage to ensure they are able to stay financially resilient in a longer life.”
Rich Nuzum, of Mercer says employers are thinking more about the current age distributions within the areas of talent needed to operate their organisations and how to influence the trajectory of these distributions.
“To leverage longevity and fight the war for talent effectively, moving from individual roles to team-based roles can help employers take full advantage of the diverse strengths of teams that comprise a combination of older and younger workers.”
A new survey, Pulse Poll, of almost 400 professionals indicates that women and men view retirement differently. It also found:
• Health is a top concern with two thirds of respondents indicating they expect to have caring responsibilities.
• Days of “Bank of Mum and Dad” may be reversing; many younger people are likely to have to financially support older family members.
• Pulse Poll respondents over 40 target lower income replacement levels in retirement.
• People are generally unaware of how to achieve their target levels of retirement income.
• More men are looking forward to retirement, while more women need to understand their financial situation.
• Women are 55 percent more likely to say they don’t know if they have saved enough.
• Women and younger people are more willing to reskill but are also worried about associated costs.
The WEF says that as people are living longer lives, business and government need to restructure their approach to later life planning.
“Failing to adopt a multistakeholder approach towards longevity will inevitably result in a significant portion of people retiring into poverty.”
• Facilitate upskilling of older workers and clamp down on ageism.
• Provide incentives for employers to offer more robust leave policies for caregiving needs.
• Explore the wider use of default auto-enrolment and default investment strategies to increase and maximise savings.
• Establish safety nets such as minimum pension levels provided by government.
• Enact enabling legislation to make all jobs flexible for longer-life working if desired and to accommodate all life-stage needs.
• Offer digital skills training and equipment to ensure equitable access to opportunities.
• Implement programmes offering support such as carers’ leave, information and advice for those who have caregiver responsibilities.
• Understand what impact the company’s retirement plan design has on the trajectory of retirement-readiness and labour flow – check if people can actually afford to retire.
• Provide flex-work programmes for caregivers, such as job-shares; allow part-time workers to contribute to defined contribution plans; provide training programmes for workforce re-entry, similar to those for early-career employees.
• Implement and review financial wellness programmes to:
• Cover specific life-stage needs that account for gender, cultural and ethnicity differences.
• Consider personalised models to show the impact of different working arrangements and retirement ages on pay and pension.
• Cater to low-income earners who are likely to need the most support saving and planning for retirement.