Edelman: Retirement Models Seriously Flawed; Age Projections Should Be To 120

The models advisors are using to plan for client retirements are seriously flawed and should be projecting out to the age of 120, advisor Ric Edelman said on Wednesday.

"They've already begun to reverse aging in mice in Japan," Edelman, a prominent author and lecturer and founder of Edelman Financial Services, told a ballroom full of hundreds of advisors at the Technology Tools for Today (T3) conference in Fort Lauderdale, Fla.

The thrust of Edelman's presentation was that technology is progressing much faster than advisors realize in a vast array of areas, setting the stage for potentially deep changes to the way advisors do business. He said this includes advances in artificial intelligence, medicine, manufacturing, transportation and communications.

Scientists are closing in on ways to end the aging process, Edelman said, making old age more of a disease than a natural part of life.

The average age now stands at about 89, but that number is quickly scaling up and advisors need to consider that in retirement planning. The typical advisor is helping clients plan retirements that last into their 80s, 90s or, in some cases, maybe to 100. That's not good enough, he said.

"The advice you are giving your clients is wrong," he said. "Your clients are going to live to 120, and if you haven't built that into your financial plan, you're not running accurate projections for them."

Advances in cancer treatments, gene therapies and other areas of disease research are also improving the quality of life of older people, making it so that people will not only live longer, but actually want to live longer, he said. That will lead to lifestyle changes that advisors will also need to prepare for.

No longer will clients follow the traditional track of working, saving for retirement and retiring, he said. Client lives will be more "cyclical," he said, with people retiring from a career or going on a sabbatical, going back to school and then pursuing a new career, he said.

"Retirement as we know it is gone," Edelman said. "The linear lifeline is dead."

As for helping clients pay for all that college, he said advisors can forget about it, painting an almost Utopian picture of a near-future in which tuition will largely be free. New York State has already enacted legislation to provide free tuition to its residents, and other states will follow, he said.