Great News - A Life Extended

The chart below is music to our ears.  If you are fortunate enough to get to 65, the tables say you are going to live two years longer on average than the same tables predicted in 2000. Advances in medicine for the two biggest killers, heart disease and cancer, have certainly helped. 

living longer pg2.jpg

And further good news is that Americans say they are happier as they get older (see chart below). Mid-life has always been associated with crises, of goals not met and the achievements not attained. But what seems to be happening between mid-life in the 40’s and the 60’s, is a period of reevaluation and reassessment that often leads to feelings of renewed freedom and possibilities.

So the good news is we are living longer and we are, on average, happier to boot. But as with all coins there is another side and this other side is not always so much fun. Living longer can mean living in bad health and living without the resources to really enjoy the extra years.

In a lengthy interview in the Financial Times, Larry Page, one of the founders of Google, talks about some long term projects the company is working on. Page has stepped back from day to day operations to focus on “thinking big.” Google is working on ideas like driverless cars and the company is one of the biggest venture capital operations in Silicon Valley. One investment it is spearheading is Calico which is attempting to address the big diseases that afflict older people. The company is led by Art Levinson who once headed Genentech.

The biggest of the big old person diseases is – Alzheimer’s. Worldwide this disease is expected to triple to 135 million cases by 2050. Calico has partnered with AbbVie to start work on drugs for Alzheimer’s. Eli Lilly is also working in this area.

The goal of medicine in an aging society should not be to “cheat death” as Professor of Public Health Jay Olshansky noted in the Financial Times but “to close the gap between when you die and when you get frail.” Most of us don’t want to live forever. We would just like to live the rest of our lives as healthy and as independent as we can.

If health is one big issue in longevity, then a second is making sure we have enough assets to live comfortably. There are numerous studies claiming that most Americans are not prepared financially for retirement. There are also studies refuting this. The important thing is not to worry about the average person or this or that study, but to worry about your own individual situation. The biggest risk in retirement is that you are going to outlive your assets.

There are many variables in retirement planning but two important ones are, limiting debt and, being flexible. Keeping expenses down is as important as increasing income. So as you get close to retirement, limit your borrowings and if possible pay off your debts including mortgages. Second, plan and spend flexibly. The old adage says you can take 4% of your retirement assets each year and not run out of funds in retirement. This is good advice in general but remember there is often  a slip between cup and lip. Don’t rely on the 4% rule religiously. If your investments suffer in a Bear Market, then cut back on what you take from retirement assets. You can bump up the payout later when conditions improve.

The overall message here is a positive one - we are living longer and living happier. Watch out for the bumps in the road but, Enjoy your Youth!