Israelis have the fourth highest life expectancy rate in the world – at 80
years for men and 84 years for women. This tops the United Kingdom (78.1 years for men and 82.1 years for women), and the United States(75.6 for men and 80.8 for women). And with modern medicine’s miracles the figures are rising. In fact, Israeli men live on average nine years longer than they did in 1976, while for women there has been an increase of almost ten years since then.
To Dr. Aubrey de Grey, chief science officer of the SENS Foundation, a charity that is dedicated to combating the aging process, such figures would be hardly surprising. Dr. de Grey’s foundation examines the aging process and investigates how to slow down its debilitating physical effects. I recently interviewed Dr. de Grey on my show, Goldstein on Gelt, and he described some of the effects that living longer will have on society and the economy. (To listen to a recording of the interview, go to www.GoldsteinonGelt.com.) According to Dr. de Grey, increased longevity is not only the result of more advanced medical treatment. “It’s quite likely that the most important thing is prenatal,” he says. “People who are getting old today have started their lives in a situation where the mother had better nutrition than what would’ve been the case for their parents.”
Living longer has many implications on our financial future. Dr. de Grey says, “What we’re seeing today is a massive crisis across the entire developed world in relation to pensions, because people are living longer than they were anticipated to live at the time that the state pension age of 65 was first instituted.” Many companies (and countries) are c
hanging their pension structure, since it’s not financially feasible to support an ever-increasing population for longer time periods. As a result, personal savings becomes even more important, since, longer lives mean more years of paying bills. On the flip side of the coin, living longer also means more time to work and accumulate savings, as well as more time for compound interest to grow in your portfolio.
If you don’t want to outlive your savings, periodically update your financial plan to make sure you are on track to meet your needs…no matter how long you live. Remember that 50% of all people live longer than the average. So, if you are among them, you need to have the means to support yourself.
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published September 2, 2012.