We start getting older the day we were born.
In the U.S., ten thousand people turn 65 on a daily basis. More than twenty-eight percent of Japan’s population will be 65-plus by 2030. Globally, the number of people age 60 and over is projected to double to more than two billion by 2050 according to the United Nations. Along with other nations East and West, we are facing an unprecedented demographics shift.
When you search for the word “Aging” in Google, the first images you see are those that show physical decline and wrinkles. But if you take a good look around us, the way we age is changing. Since the early 1900s, we have added 30 years of living. A 50-year old today is likely not the same as a 50-year old twenty years ago. The 50-plus age group is also much less homogeneous compared to previous generations. Across the spectrum, you will find people being the same “age” but at different stages of their lives. Many of us are starting family later in life and retiring (and re-retiring) later. “Age is just a number” holds more truth today than before. Instead of using age as a determinant, we must think broader in terms of life stage and life events.
While eighty percent of boomers plan to work full time or part time past the traditional retirement age of 65, the nature of work continues to change. According to Kauffman Foundation, more than 50% of new entrepreneurs in the U.S. were aged 45 and above. For every dollar spent in the U.S., 51 cents is spent by people over the age of 50. As indicated by The Longevity Economy Report published by AARP and Oxford Economics, the 50-plus demographic generate US $7.6 trillion in annual economic activity, which includes housing, transportation, food, healthcare, and entertainment.
If all aspects of our lives are changing, then why not the way we plan and manage our finances? And isn’t there more we can do to design products with all people as we age – so that we can bring communities closer together?
Re-framing innovation
While much of the focus on artificial intelligence in financial services sector is on wealth management, the conversations are typically around how to leverage technology to attract younger demographics from millennials to Gen-Z. But what about the 50-plus population in the U.S. that control over $30 trillion of investable assets? Or those who don’t have their own financial advisors but are looking for the best strategy in drawing down their assets and making sure they do not run out of funds in later years?
Technology is and should be age-agnostic; the same solution that helps millennials figure out if they can afford to buy a home can be used to help sandwiched generations plan for finances between multiple households and generations. Behavioral economics principles that nudge consumers to take the proper actions towards a more secure financial future can be employed for a wide spectrum of audience regardless of age. Similarly, algorithms and data analytics can also be used to help near-retirees understand how much longer they need to work or if they have sufficient funds to help with their grandchildren’s college tuition. Financial planning should be customized based on life events, health, and aspirations, and dynamic and adaptive to changing societal and market conditions. Ample opportunities exist for financial advisors and wealth management firms to provide more personalized services for women, who tend to have accumulated less assets, but with longer living years than their spouse.
Looking ahead
No matter who we are, where we live, and whether we like it or not, technology is changing every aspect of our lives. We have the power to leverage innovation to serve a greater purpose and for the well-being of the society. What limits us is not the technology itself, but rather, our will, our heart, and our imagination to do the right thing.
It is no longer an option to ignore the realities of the demographic shift. But the challenge ahead of us is not biology; rather, it is one of mindset and culture. It’s how we approach the burden of an aging society and turn it into an opportunity – for us to become a more inclusive and empathetic society. The future of aging should not be a story of survival – but one of living.
Let’s dare to dream for a more equitable future, not just for ourselves, but for the generations after us.
Join us, and be part of the change.