The current defined contribution system offers a solid foundation for retirement success, but key stakeholders must do their part to ensure a path to financial security in later years. That’s according to Dan Houston, president of retirement, insurance and financial services at the Principal Financial Group ®, who asserts his views in a new book on aging.
Houston, a 30-year veteran of the retirement industry, is one of 16 thought leaders contributing chapters to The Upside of Aging: How Long Life is Changing the World of Health, Work, Innovation, Policy and Purpose. The authors offer new ways to think about the critical implications of the aging global population; focusing on the opportunities and significant potential of a “massive demographic shift (that is) changing our world.”
In Houston’s chapter, “Financial Security: Longevity Changes Everything” he focuses on the challenges of funding what he calls the “new retirement”—an age of discovery and exploration that could last 20, 30 even 40 years.
“This may be the first time in history where someone spends more years in retirement than a traditional working career. But those longer lifespans come with a substantial cost,” said Houston. “Armed with the right savings vehicles, sound guidance and self-discipline, today’s worker can ensure that aging is a time of fulfillment as opposed to one of financial stress.”Calls for actionHouston believes over the next two decades, 90 percent of workers can be on track for a secure retirement but recognizes it will take action by workers, employers, financial professionals, investment managers, plan service providers and policy makers. He outlines specific actions, highlighting the benefits to each of the stakeholders of an aging generation that is financially independent. “Ensuring financial well-being in later years not only benefits individuals, but also the economy and society as a whole,” said Houston. “We are all better off when our experienced elders have the financial freedom to continue contributing as mentors, entrepreneurs and community advocates.”