People's longevity a modern-day challenge for employers
In 1950, the average life expectancy globally was just 48 years. By 2019, this had increased substantially to 73.
Expectation of a continued rise in people’s longevity is great news for individuals of course, but for policymakers, employers, and the financial services industry it presents a necessity to adapt work and retirement.
A new report released by the World Economic Forum (WEF) in collaboration with Mercer, highlights the key themes to ensure people approach work, learning, and retirement in the way that best meets their needs.
Haleh Nazeri, WEF’s longevity lead, says that everyone has a part to play in ensuring we all live longer, healthier lives.
“How will business support an older workforce and one with growing caregiving needs, what will policymakers do to help all citizens reach retirement equity, and finally, what can individuals do at every life stage to ensure they are able to stay financially resilient in a longer life,” she said.
For workplaces, this is likely to mean employers building multi-generational teams to provide the breadth of experience and support necessary for an ageing workforce.
Views on retirement
As part of the report, a survey of 400 professionals was conducted to gauge the latest thinking on retirement.
It found that men and women view retirement differently with women 55% more likely than men to say that they don’t know if they have saved enough for retirement.
Perhaps as a result, more men than women said they are looking forward to retirement, while women are more likely to say they need a better understanding of their financial situation.
Overall, the poll found that people are generally unaware of how to achieve their target levels of retirement income.
The report states that increasing longevity globally will require new innovations and solutions to address how people can stay financially resilient in a retirement that may be 20 years longer than their grandparents.
Financial burdens
Among other findings in the report are that health is a top concern with two thirds of respondents indicating they expect to have caring responsibilities.
The long-held phenomenon of the ‘Bank of Mom and Dad’ may be reversing as many younger people are likely to have to financially support older family members.
Additionally, with changing requirements of employers, women and younger people are more willing to reskill but are also worried about associated costs.
Recommendations
The report makes several recommendations for governments and employers.
These include policymakers ensuring minimum pension levels and potentially increasing auto-enrolment into pension schemes and default investment strategies to boost retirement savings.
For employers, the report calls on them to understand what impact the company’s retirement plan design has on the trajectory of retirement-readiness and labour flow, to check if people can actually afford to retire.
The full report is at https://www.weforum.org/reports/living-longer-better-understanding-longevity-literacy
