There's a disruption going on in the world of retirement.
And it boils down to this: "Individuals are thinking about retirement much differently," said Bruce Wolfe, the principal of C.S. Wolfe & Associates and one of 16 experts who spoke at TheStreet's Retirement, Taxes, and Income Strategies symposium held recently in New York. "They're thinking of it in terms of just how do I continue to have fulfilling life as I get older."
According to Wolfe, there are four themes emerging that will change the future of retirement - for the better: positive, integration, markets and economics, and personalization.
For positive, Wolfe says, "our society, particularly in the U.S., has always viewed people getting older, in retirement, as either a crisis, or an issue, or a problem that needed to be solved."
And what he thinks we're starting to see is an opportunity. "This is a point where individuals see themselves as continuing to be fully active members of society with aspirations or how to continue to grow and develop and contribute to society," says Wolfe. "And so, I think the whole kind of rubric of how people are thinking about themselves, and how society's reacting to older people if definitely starting to change. And again, that is a huge thing."
Wolfe also suggested that people may not be saving enough for retirement because the end game as currently portrayed -- saving enough money to buy medications or live in a nursing home -- doesn't inspire action. "That's not a very aspirational exciting reason to why you should be saving money as you get older," he says. "So, I don't think it's too much a surprise that people aren't doing that great of job of doing it. I think the reality is, if you start to frame and talk about growing older and a much more positive and interactive way, I think people will respond by not just saving to put money aside, but also I think they will see themselves as individuals who genuinely can continue to contribute to society."
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Integration, Not Isolation
As for integration, Wolfe says we have, historically, created institutions to isolate you as you get older. "And by far, probably the most prevalent example is nursing homes, old age facilities, or older living communities," he says.
According to Wolfe, there are at least two factors that will change the course of history: technology and mobility. "We're going to start to see more integration rather than isolation of individuals as they get older," he says. "I think that also reinforces the first point I was making about individuals wanting to continue to contribute and be a part of society and be integrated into society."
Wolfe noted that some governments, for instance, subsidize individuals, younger people in college, to live with older individuals and help them with odd jobs around the house. "That's just kind of one very small example of how we're going to see, I believe, much more integration," he says.
Wolfe also said technology -- such as earbuds that function as hearing aids -- will also help people become more integrated and less isolated.
As for markets and economics, Wolfe said this is probably the most underutilized and the least talked about theme, but it also has the greatest potential as our society gets older. "How often are companies talking about targeting older individuals in terms of products and services?" he said, noting that just 15% of companies in the U.S. have an aging business strategy in place. "That's pathetic, right?" he asked. "I mean, who has most of the money, who's interested in spending that money? Yet only 15% of businesses have actually sat down and tried to design products and services coming back, like the earbuds as an example, for older individuals."
His prediction? More and more companies will move in that direction. "To be quite honest, I think it's kind of pathetic that we haven't seen more action in that space yet because it's a huge business opportunity that firms have not taken up," he said.
Wolfe also predicts that firms will start to retain and hire older workers. "The idea of hiring individuals who actually can resonate and align with that older market, is also another great reason why I believe individuals will continue to have the opportunities to work and will be in demand with many, many companies," he said. "So, it's not necessarily 'we have to keep somebody because they're older', it's actually you want them, because when you're trying to design products for people in their 70s and 80s, it's probably a good idea to have some people around who actually can relate to that."
From an economics standpoint, Wolfe thinks there's going to be a huge impact as demographics shift to an older profile, just even in terms of GDP. "We're going to see pressure on growth on the country just because the demographics are moving in the wrong direction," he says. "We already see this in some other countries that are farther along like Japan, as a probably the role model example around the world. Again, another reason why we need to figure out ways to engage and keep individuals in the workforce."
Wolfe also noted 87% of an enterprise's value is associated with intangibles such as patents and intellectual property. And that means it won't make sense for workers who have been in an organization the longest time to retire early. And means phased retirement might at long last become a reality. Read Help People Work Longer by Phasing Retirement.
As for personalization, Wolfe predicts the biggest impact will be on healthcare. "Between gene therapy, and some of these other revolutionary initiatives that are underway, we're going to start to see that individuals can get much more personalized, individualized therapies," he says. "And, it could be through people having for example, little chip embedded in them that can track all their vital signs to the point where actually drugs can be dispensed into them, that are already integrated into their system, again clearly not a medical doctor by any stretch of any imagination."
Personalization will also come to the home. Individuals will be able to stay in their own homes much longer than before because of technological improvements such as sensors that track movement.
"So, just think of all the ramifications and the benefits that would bring to individuals, particularly many of you who maybe have older parents that are still living in their homes, knowing these types of sensors and capabilities are available, would be a dramatic improvement, and obviously help you sleep better at night," he said.
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