Today, most financial planning revolves around actuarial assumptions that you won’t live past your 80s or so. 90s if you’re real lucky. Well, what kind of financial planning implications would there be for people that start living to be 150 or older? Everything goes out the window! Instead of having to save 15-20% of your income during your working years, it might be 30-40% right? Demographic shifts would occur. Voting paradigms would change. Workers might continue working into their 80, 90s and beyond, so what kind of jobs would be available for graduates? It would be nuts! Sorta. Because it would probably only be a select group of people that pull it off ($$$) and it would occur gradually.
Medical Advance – 150 Year Old Humans?
Articles pop up now and then about the purported “fountain of youth” drugs or unfounded natural remedy claims. However, a common-sense approach put forth by a more legit doctor (source CNBC) breaks it down as more of a “cell maintenance” issue than anything else. As we learn more about the destruction that occurs to cells over time and how to cure particular types of destruction with gene therapy, it’s conceivable that the various maladies we face in old age which ultimately lead to our demise could be “managed” – kind of how we manage diabetes, retroviruses and even certain cancers now. I have to imagine these novel, custom therapies would be costly at first, but he predicts the first person to live to 150 has already been born (lucky me!). I bet a 150 year old would look pretty ugly – haha – but perhaps some gene therapy could cure up skin cell destruction and whatnot as well.
If this sounds far-fecthed, just think about all the other gene therapy work that’s underway (some of which has been successful, some not so much). In 2005, the MIT Technology Review Journal offered $20,000 tor any molecular biologist who showed that the SENS theory was “so wrong that it was unworthy of learned debate”. The award has never been claimed.
So, since this isn’t a medical blog…the money. Back to some of those implications in the opening paragraph, I just started thinking about some of the implications of living to 150 and it’s mind-boggling. We just take for granted that people will die and you base financial assumptions on that. Look what happened to investors that bought life settlements on HIV patients only to find that life-extending HIV treatments wrecked their plans and the patients didn’t die! In fact, many of the HIV carriers outlived the investors! Talk about poetic justice! Well, to consider a few implications here in addition to having enough retirement income alone, some additional thoughts:
- Life Insurance – How the heck is an insurance company supposed to value a policy when they don’t know how long you’re going to live? In this case, the consumers would be ripped off for life terms since they’ll be paying premiums for an extra 50 years to receive the same insurance benefit upon death at a much reduced (real dollars) rate.
- Pensions – Holy crap are states, municipalities, the federal government, and some dinosaur companies screwed. As ridiculous as it is that a cop can make a $50,000 salary and go out and work a ton of overtime in his final year to receive a lifetime pension at $80,000/year (gotta love union rules!), imagine having to pay this $80,000 an extra 50 years?! I don’t think the pension coffers are set up for that – they depend on people dying on time! And you think taxpayers are pissed now about public sector union costs? (See more on Pension Warning: Quotes are in FUTURE Dollars! – How to Convert to Present Value).
- Social Security and Government Assistance – Social Security would be totally screwed up. You pay 6.2% of your income (Up to This Year’s FICA LIMIT) during your working years to hope you actually live to see some of it back in the government Ponzi scheme called Social Security. Well, if instead of dying as planned, Americans just keep living, who the heck’s going to pay for all these centarians? There just won’t be enough working salaries to fund all the retirees. I guess then they’ll finally get around to some immigration reform and import the bodies.
- Inheritances – Nobody should “plan” on an inheritance. But let’s face it, many people assume they’ll get at least something when their parents pass. That money might be used for education for children/grandchildren, real estate to keep in the family, or whatever. Regardless, if people are living to 150, that means their progeny will be like 120 when they receive an inheritance. What the heck could you do with the money at that age? Maybe inheritances should be restructured to always to to grandchildren or even great grandchildren instead of direct descendants? Crazy thought.
- Great-Great- Grandkids – My kids have had the benefit of experiencing 2 great-grandmothers. That’s pretty neat. But by living to 150, assuming people have kids by 30, we’ll be talking great-great-great in some cases. Talk about some bizarre encounters at the family reunion? Nuts!!!
Anyway, these are just some of the musing off the top of my head. Is a Roth IRA account gonna last 100 years? IS there any best retirement plan under conditions like these? I doubt it! I’m sure you’ll think of more.
If This Comes to Pass, What Are the Financial and Social Implications?