By 2050, the number of people over 60 is expected to more than double, soaring to 200 million.
The World Economic Forum’s Principles for the Economy of Longevity propose six actions to fund our longer lives in the context of an ageing global population.
These principles include providing universal financial education and prioritizing healthy aging.
We are all getting older, and everyone is living longer and longer.
By 2050, the number of people over the age of 60 is expected to more than double, soaring to 2.1 billion.
So what does this mean for our personal finances, and for the broader economy?
The World Economic Forum explores these issues in its new report, Principles for the Longevity Economy: The Foundations for Future Financial Resilience.
The report sets out six “longevity economy” principles that aim to fund longer human lives and change the way we think about aging.
In a longevity economy, people will have everything they need for healthy living, financial resilience, and longevity; Although pensions, retirement systems and social benefits may vary from country to country.
The world’s population is aging. Image: Visual Capitalist
Principle 1: Ensure financial resilience for key life events
As they get older, almost four in 10 people face a situation of financial instability due to unplanned career breaks, illness or unexpected retirement. Redundancy, caring responsibilities and the death of a loved one are other important life events that can push people’s families into financial hardship and, in extreme cases, to the brink of poverty.
To help people meet these challenges, we need cooperation and common action between the public and private sectors.
For example, policymakers can design programs that keep people from falling into poverty as a result of major life events. These programs can incentivize people to save early for retirement and provide financial support to informal care providers.
Employers can provide workers with financial savings and insurance tools, financial service providers can design innovative savings products, and citizen groups can help people find the right tools and express community needs.
The report stresses that having affordable and stable housing is also “critical” for a long and healthy life.
Principle 2: Universal access to equitable financial education
Only a third of the world’s population is financially literate, contributing to inequality in wealth and life expectancy.
But by getting financial education, people can make informed financial decisions.
To achieve this, policymakers can work with the private sector and civic groups to develop financial literacy courses.
Employers can provide financial education and guidance to workers, financial companies can develop impartial financial education content, and civic groups can help communities access financial education.
Singapore’s national financial education program, MoneySense, is a case in point. It has been running since 2003 and aims to help Singaporeans manage their money and make informed financial decisions.
Principle 3: Prioritise healthy ageing strategies as a priority for the longevity economy
Over the past 70 years, average life expectancy has risen from 47 to 73 years, an increase of 55%. But on average, in one fifth of our lives, the impact of disease cannot be ignored. Medical costs are also a concern. Therefore, focusing more on preventing disease, rather than treating it when it occurs, will help improve our quality of life in old age.
The longevity economy initiative includes policy makers and health service providers providing a wide range of quality health education and services. At the same time, it can also increase the detection of key disease groups.
Employers can offer a range of health and well-being benefits such as health insurance, critical illness insurance, and mental health benefits. Citizen groups can provide accessible health education and services and help ensure that voices from the community are heard.
Health care costs are the biggest financial worry. Image: Longevity Economy Principles
Principle 4: Develop work and lifelong skills for a multigenerational workforce
A quarter of people aged 55 and over want to work in old age, but they are facing barriers when it comes to finding opportunities.
In a longevity economy, jobs and skills need to fill this gap so that people can continue to find work as they age.
The forum said policies could be put in place to help businesses and workers “move beyond the traditional retirement age.”
Employers can make it easier for people to rejoin the workforce after a career break, and citizen groups can partner with the public sector on skill-building activities and the private sector on training and seeking best practices.
Principle 5: Design systems and environments that enhance social connections
Loneliness can seriously affect health and well-being. Therefore, maintaining a social network as you age is crucial.
The Longevity Economy Initiative requires policymakers to work with the private sector to create an environment for communities to connect across generations.
Companies should find ways to keep older workers connected to the workplace and maintain the sense of purpose that comes with it. Civic groups can help address social loneliness and encourage people of all ages to get involved in their communities.
AgeWell (not afraid to grow old) is an example. This is a program that was piloted in Cape Town, South Africa, in 2014, and after the success of the pilot, it has been rolled out globally. The program recruits geriatric caregivers to help maintain the health and well-being of other seniors.
Principle 6: Address life expectancy inequalities between gender, race and class
Not everyone feels the benefits of a longer life equally, and inequality exists across all aspects of income, wealth, and well-being.
In the United States, for example, about one in six black Americans over the age of 65 live in poverty, compared with only one in 15 white Americans.
We therefore need to properly design education, resources and tools so that they can fully contribute to inclusive development.
For example, policymakers and businesses need to address factors such as gender, race, ethnicity, geographic location, disability, and socioeconomic background that contribute to financial resilience and life expectancy inequality. Regardless of background or job, everyone must have equal access to good quality health, retirement and social care.
Civic groups can continue to give voice to those who feel marginalized and demand that the private and public sectors hold themselves accountable.