Currently showing: Funding longer lives > Pension/retirement


03 Sep 13 13:26

I also participated in of the 4 well attended Fish Bowls at Swiss Re's 150 years' client event in Zürich on Friday August 30th and would like to share some experiences.

We had a number of clients that were quite passionate about the subject and who returned for second rounds to actively participate in the discussion. It was difficult however to start the discussion from the perspective of "it's 2050, all is well, funding longer lives has been taken care of, but how did we get there?", as the road to a blossoming 2050 is paved with many obstacles.

Common understanding was noted however on the following items:

Ageing without falling into poverty requires a mindset shift. And this shift is not something that our children will need to adopt, but WE (you, me), as we're already the generation that likely will have to work longer in order to fund for longer life. Education of the population was a recurring theme (but unaddressed was the question who should be the educators) as well as there is a belief that one should be able to select one's own retirement age, depending on one's own desire to continue to work longer, ability to work longer (i.e. does one's health allow you to work longer) and financial ability to take earlier retirement. And going into retirement "cold turkey" is sooo nineties ;-) so phasing out or into a 2nd career will become the norm. From a financing point of view, earlier/later retirement would mean discounts or increases in retirement pension.

The issue of ageing healthy was discussed in quite some detail: as we age, will we stay healthier longer, i.e. will the period of disability caused be age remain more or less the same. If so, then increasing retirement age in line with remaining life expectancy makes sense and is unavoidable.

Interesting observation: previous generations used to inherit from their parents when their children were in need for additional assets: raising children, buying house etc. Nowadays, people inherit when they already have built up a career and are self sufficient hence in less need for the estate. Going forward, it is expected that we will inherit when we're retired. So couldn't that not only be a way to build up additional savings for retirement but even better, allow oneself to be retrained to pursue a different career after retirement or even set up a new business? That also partially addresses the question whether and ageing society becomes poorer or not. A representative from Israel illustrated the economic impact that the influx of around 1m Russian immigrants had on Israel, increasing its population by 20% in around 5 years: economy was booming because of the additional demand. And if we stay healthy longer, why should we start spending less sooner?

Yet, with these inevitable changes, we will see less people who can celebrate the day when they have been drawing a pension from their former employer for a longer period than they have actually worked with the employer!

Despite the fact that there was not a lot of focus on the role of the insurance industry during our discussion, the insurance industry has a clear role to play and we have the products ready but how do "we" ensure the rest of society makes the transition.

Am sure have forgotten some other elements that were discussed (elderly care, different ways of living together etc), must be the age ;-)!


Category: Funding longer lives: Pension/retirement


3 Comments

Bruce Hodkinson - 9 Sep 2013, 10:19 a.m.

One interesting and very controversial point that did not come out "officially" in the fish bowls, but was a topic of discussion over dinner with a number of clients, was the concept of triage and implementing Living Wills. Will be interesting to see if this point comes up in any of the other events.

Jennifer Rodney - 10 Sep 2013, 2:31 p.m.

Thanks for sharing from the 'unofficial' conversation. The topics are important to explore but as you say, not without controversy. I imagine if they'd been raised during the 'fishbowl' sessions, that the dialogues might STILL be going on this week... The topic of living wills actually came up here on Open Minds a couple of weeks ago. Not sure if you've already seen this post? https://openminds.swissre.com/stories/357/

Nicola Oliver - 11 Sep 2013, 1:53 p.m.

An interesting article on a second career and attitudes to 'retirement'
http://www.ft.com/cms/s/0/f505ee90-9557-11e2-a4fa-00144feabdc0.html#axzz2eaWMfudE


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