With the explosion of companies focusing on longevity, can you afford to retire?
You may remember that recently we wrote a post on this blog about whether the government should be able to force people to save for their retirement – aside from compulsory contributions to the state pension of course. The post sparked quite a degree of response, with the majority of people being quite passionate about the fact that beyond our obligation to pay our tax and national insurance contributions, people should be allowed to control their finances and plan for retirement in any way they see fit. One commenter even used the definition of slavery to prove how controversial this point could potentially be. Personally, I am in agreement with the thought that we should be allowed to use our funds and plan our future finances as we see fit. That being said we may not be taking the responsibility of retirement planning seriously enough, especially when we take into account factors that may require us to save more than we realise. Take the current explosion of companies seeking to increase human longevity for example.
The possible effects of increased longevity on retirement funds
I was reading an interesting press release the other day regarding the progress scientists are making in the field of increasing longevity, actively seeking to prolong the life-span of the population as a whole and raising some interesting financial questions as a result.
With the backing of private investors and even the huge resources of Google behind the research, companies such as In Silico Medicine, Google Calico and Human Longevity Inc. are currently making significant progress when it comes to increasing longevity. All of these companies are in the startup mode and use different methods, but they share a common goal – fight aging and aging–related diseases. In Silico Medicine uses advanced algorithms on large collections of human genetic data to find drugs that slow aging or repair cell damage for everyone and for individual patients. Human Longevity Inc will use genetic information from 40,000 people to find clues to healthy aging and Google Calico’s methods are still unknown. But do we really care when it is backed by Google. While this progress could soon help to extend human life, it does present difficult challenges for pension funds as well as for our own personal savings and retirement provisions. How so?
The problems come when we increase longevity, without at the same time increasing the retirement age, health and productivity of the aging workforce. As we all know, the aging population is already placing a great burden on state pension funds, forcing many governments to raise the retirement age in an attempt to plug any black holes. Without significant progress in improving the health and mobility of individuals during old age though, how far could the retirement age really be pushed before it starts to become counter-productive? This could mean that increasing longevity could significantly increase the burden on pension funds – both state and private – as people start to live longer without ‘paying back into the system’ as it were.
Are you saving enough?
With longevity in mind then it would be good to ask ourselves, am I saving enough? If immediate or short term progress is made in the area of longevity and we all start living significantly longer as a result, would my current retirement provisions account for that? Bearing in mind of course that the state pension provision could well be subject to change if the average age of the population continues to rise, increasing the burden on state pension funds as a result.