You need an \u2018evergreen\u2019 approach to life, work and health, economics professor Andrew Scott says<\/p>\n
In the first session of his world economy class at the London Business School, economics professor Andrew Scott asked students to name the trends that will transform their lives and careers over the next several decades.<\/p>\n
Artificial intelligence and climate change sparked much discussion among his students. Meanwhile, the trend of demographic change and \u201cmore old people\u201d was seen as a negative.<\/p>\n
In his new book, \u201cThe Longevity Imperative,\u201d Scott maps out how longer lives create opportunity as well as responsibility. Societies, businesses and governments will all need to make changes, but the challenge, Scott says, isn\u2019t that we\u2019ll be dealing with more older people in the future \u2013 it\u2019s that we need to prepare today for the possibility of living longer.<\/p>\n
According to the World Health Organization, in 2020 there were more people age 60 and older than there were children under 5. Between 2015 and 2050, the proportion of the world\u2019s population over age 60 will nearly double, from 12% to 22%.<\/p>\n
Meanwhile, the U.S. is in the midst of a period when a record 4.1 million people will turn 65 in the next three years, according to the Alliance for Lifetime Income\u2019s Retirement Income Institute, which coined the term \u201cPeak 65.\u201d This comes as many people are struggling to save enough for retirement, with two out of three Americans saying they fear running out of money more than they fear death, according to a 2024 report from Allianz Life.<\/p>\n
Also read: Home prices, auto loans and Social Security: More than 4 million people are turning 65 this year, and it will affect you<\/p>\n
In a conversation with MarketWatch, Scott said that in order to thrive over the long term, people need to focus now on their health, finances, skills and relationships.<\/p>\n
MarketWatch: You talk with your students about how longevity could be as transformative as AI or climate change. How so?<\/p>\n
Andrew Scott: It\u2019s up there, completely. One of the problems we\u2019ve got is that we focus on an aging society, which is about there being more old people. The fundamental change is that the young and middle-aged can expect to become old. The American Academy of Actuaries says that a child born today in the U.S. has a more than 50% chance of living to age 95. That\u2019s really profound, because that\u2019s never happened before. We haven\u2019t structured a life, we haven\u2019t got social institutions, we haven\u2019t got financial plans, we haven\u2019t got savings plans, we haven\u2019t got education plans, we haven\u2019t got social norms to encourage us to age well. That\u2019s the most important thing.<\/p>\n
When you go back to AI and climate change, if you think about what\u2019s going to be really important for your future, it\u2019s how I\u2019m going to age. We\u2019ve got to adapt to the fact that however old we are, we have more time ahead of us. That creates more opportunities but also new challenges to make sure we adapt and adjust to a longer life. We always talk about adapting and adjusting to AI and climate change, but we rarely talk about adapting and adjusting to an aging society.<\/p>\n
MarketWatch: Can you explain your idea of the \u201cevergreen agenda\u201d?<\/p>\n
Scott: We can now expect to become very old. We fear getting old. We fear outliving our health, our wealth, our finances, our skills, our relationships. What are you going to do now to age better? If you wait until you\u2019re in your 60s or 70s to age better, you can still do things, but it\u2019s much better if you start earlier.<\/p>\n
To remain evergreen, you\u2019ve got to be productive and engaged for longer, and healthier for longer. You have to remain vigilant that our health is OK, that our skills are OK, our finances and relationships. My grandfather reached 90, but he said he wasn\u2019t prepared for it. We can\u2019t have that excuse. We have a very high chance of living that long. We have to make sure we age well. How do you keep your health and skills and engagement and purpose and friendships alive? We work on these things in other parts of our lives, but now we need to do it in our later years.<\/p>\n
\u2018How did we turn living longer and healthier into a bad news story?\u2019Andrew Scott<\/p>\n
MarketWatch: You said a child born in the U.S. has a 50% chance of living to age 95. What burden does this place on society and on the individual to fund that life?<\/p>\n
Scott: Lifespan is getting ahead of health span. We really need to find ways to stay healthier for longer. We\u2019re living for longer. It\u2019s a very simple economic arithmetic. If you don\u2019t want to see a fall in your standard of living, you need to produce more if you\u2019re living longer. It could be that AI will solve that problem for us and we\u2019ll become so productive that we won\u2019t need to work longer, but absent that, we\u2019re going to have to work for longer. We\u2019re going to need to produce more if we want the same living standard.<\/p>\n
That doesn\u2019t mean we have to work in the way we currently do. Most governments tackle this by raising the retirement age, and I think that\u2019s just wrong, because many people can\u2019t work to the current retirement age. So if you\u2019re increasing it, you\u2019re not really improving things.<\/p>\n
We need to find ways to support people being healthier and productive for longer. One of the things that really worries me is that from age 50 to the state pension age, lots of people drop out of the labor market. In the U.S. at about 50, about 80% of the people are employed. By 65, which is before the Social Security full retirement age, it\u2019s down to about 30% to 35%. And for some people, it\u2019s because they can afford to retire. For most people, it\u2019s because they become ill, have to care for someone that\u2019s ill, their skills are out of date, or ageism on part of the firms. Tackling that is really key. If you can keep more people working from 50 to the state retirement age, you create a lot of resources.<\/p>\n
Perhaps you may need to raise the retirement age, too. If we are going to work until we are 70 or 80, we can\u2019t do the same careers we\u2019re doing now. In the 20th century, we created the idea of a three-stage life of education, work and retirement. Government is trying to stretch that out and say you\u2019re going to work for longer.<\/p>\n
I think we\u2019re going to see more career shifts. It used to be that people came to a hard stop of work at a certain age. That\u2019s no longer the case. People retire at different ages. We had this three-stage life and people took more leisure after retirement. I think now we\u2019ll work longer, but we\u2019ll take more leisure at this side of retirement. You\u2019ll work maybe part-time. You\u2019ll have a different glide path. You\u2019ll retire and then un-retire. You\u2019re see people starting their careers later, taking breaks. We\u2019ll see a different distribution of leisure. It makes finances a bit more complicated, but it\u2019s actually a good thing.<\/p>\n
MarketWatch: In your book, you talk about the four horsemen of the apocalypse being longer lives, fewer children, declining populations and the old outnumbering the young. But you say there\u2019s reason to look at this with optimism. What mindset shift do we need?<\/p>\n
Scott: The concept of an aging society is really a remorselessly negative topic. No one gets excited about aging. It\u2019s a word that increasingly nobody likes. Straight away you\u2019re into the doom and despondency stuff.<\/p>\n
On average we\u2019re living longer and we\u2019re healthier for longer. Sounds like quite good news to me. How did we turn living longer and healthier into a bad news story? Really, it\u2019s a story of fewer children dying in their early years, fewer parents snatched away in midlife and more grandparents meeting their grandchildren. That sounds great. Of course, there\u2019s a problem with dementia, [caregiving] and pensions, absolutely. But this is something that\u2019s good news.<\/p>\n
Falling populations isn\u2019t necessarily a problem. We have environmental challenges. Some people want fewer children. I worry that governments say we have to have people having more kids to make sure Social Security survives, but that\u2019s completely wrong way around. If people want to have fewer children, why don\u2019t we change our institutions to give them what they want, rather than saying you have to do what\u2019s needed to keep Social Security going?<\/p>\n
We can\u2019t underestimate the capacity of later life. We underestimate the capacity of older people. We always underinvested in later life. So we don\u2019t arrive there with the skills, the purpose, the resources, the health that we need. That made sense when 5% of the people made it to 90. But when 50% of the people make it to 90, we\u2019ve got to start preparing.<\/p>\n
MarketWatch: Should we retire retirement?<\/p>\n
Scott: When you think about it, it\u2019s a terrible word. I\u2019m very tired and I\u2019m going to retire. In that sense, it needs a makeover. Even if you stop working, being engaged is key. People who are engaged, who have a reason to get out of bed, who have a purpose \u2013 they live longer and they\u2019re happier. I think the challenge of retirement is that we have so many people entering that age group. There\u2019s no one single way to do it.<\/p>\n
For some people, a traditional retirement will work. You will stop work when the cost of work exceeds the benefit \u2013 the benefit of work is the money, the prestige or enjoyment. And the cost is not just the cost of traveling to work, but do I get physically tired, do I have someone to care for at home. It\u2019s going to differ wildly for different people. This notion of retirement as a binary outcome \u2013 full-time or nothing \u2013 that\u2019s clearly gone.<\/p>\n
I think the punch line, though, is that given these gains in life expectancy, you\u2019re going to have to work longer than other generations. And if you don\u2019t like your current job or you can\u2019t carry on in your current job, then you need to start thinking about a switch. That\u2019s part of the new retirement.<\/p>\n
MarketWatch: Your book talks about the need for better intergenerational harmony and cooperation. How do we accomplish this?<\/p>\n