What if half your clients over the age of 60 today lived to be 100? The idea may sound outlandish, but is it really?

Futurist Ray Kurzweil argued in his 2005 book, The Singularity Is Nearer, that immortality could be reached by 2030, which is only six years away. That claim left many unconvinced.

High-profile financial advisor Ric Edelman is a follower of the Singularity school, and his assertion that people alive today could live 120 years may not be as startling as it sounded a decade ago. Medical advances in dementia, obesity, cardiology and a host of other diseases are creating a revolution in healthcare.

The ramifications for financial planning, career management and generational wealth transfer, to name just a few things, are far-reaching. Most financial planning programs assume people will live until their early 90s (some go to age 95). But people could possibly live well longer than that, especially clients of financial advisors. The problem with attempting projections in this area is that they rely on data, all of which is based on past experience.

As Laura Carstensen, a professor of psychology and director of the Stanford Center on Longevity, writes in her remarkable new book, A Long Bright Future, life expectancy increased by about one-third, or 28 years, between 1900 and 2000. Over the last 150 years, it has doubled, Carstensen told attendees at Financial Advisor’s 2019 Invest In Women conference. “It’s an amazing cultural achievement. Only humans could complain about this,” she said.

This is a once-in-a-millennium occurrence. Long lives appeared “so suddenly” in the last century largely because of advances in medicine that reduced children’s deaths in infancy and early childhood before they reached age 5. But Carstensen notes that culture has also played a major role.

“Life expectancy changed because people changed the way they lived,” she writes. “Culture moves faster than evolution; it is the crucible in which medicine, technology and social practices are forged.”

People’s level of education is the leading factor associated with their longevity, but their income and wealth are close behind. Lifestyle choices are another factor. Baseball great Mickey Mantle saw his father and grandfather die in their 40s, and said, “If I knew I was going to live this long I would have taken better care of myself.” He died of liver cancer at 62.

The good news is many Americans are rethinking some of their behavioral choices. “Medical science has become powerful enough to rescue people from the brink of death but remains largely impotent when it comes to the effects of a lifetime of bad habits that brought them there,” Carstensen argues.

The reality is that most, not all, of financial advisors’ clients enjoy better education levels, more wealth and better diets and exercise habits than the population at large. “While income level best predicts how quickly people decline after they get sick, education predicts whether they get sick in the first place,” she writes. “When educated people get sick, they manage their health better.”

Not everyone is hitching a ride on the longevity train. The surge in middle-age deaths from drugs, alcohol and neglected health problems is alarming, and the families of advisors’ clients haven’t been spared.

The middle class has shrunk in recent decades, but people who remain in that cohort and retire rely on Social Security for 50% to 67% of their income, Carstensen notes. These folks may have paid off their mortgages and managed to accumulate some retirement savings on their own, but it’s nowhere near sufficient to last for three or four decades.

“Social Security functions very differently” for the wealthy, the middle class and the poor, she observes, adding that she had met very wealthy Americans who tried to give their checks back only to find the government wouldn’t accept them. Even within the ranks of the affluent, income and wealth disparities have deepened.

What about the implications for financial advisors and their fortunate clients, not to mention society at large? The best financial plan written for a healthy, affluent, frugal person might handle the stress test of their living to 108, but even that plan could benefit from some serious rethinking.

Carstensen suggests the option of “elongating” all stages of life, not just retirement, to alleviate people’s stress and enhance the quality of their existence. “It makes no sense to cram all of the work into the beginning and all of the relaxation into the end,” she points out.

As thought leaders like Edelman have suggested, it may make more sense for people to begin thinking of “Hollywood-style” careers—in which they go from one extended project to a sabbatical and then to another project—rather than jumping into the New York-style rat race marathon. With the advent of the gig economy and, more recently, various flexible post-pandemic work arrangements, the labor market is erratically moving in that direction.

The generally accepted assumptions of financial services people—such as the notion that baby boomers will transfer something like $80 trillion or more to millennials—might turn out to be a pipe dream for the offspring if people who planned to live to 95 actually live another decade or more. That’s just one of many ways a system structured for 25 to 30 years of life after work could be upended.

Loneliness And Society
Carstensen challenges the widespread perception that old age leads to loneliness and unhappiness, noting that older people in general have “lower rates of nearly all mental health problems, including depression and anxiety, than younger people do.” Nonetheless, what she calls the “narrowing” of one’s contemporaries is inevitable.

This is why it is critical as one grows older to diversify the age range of one’s social circle with a strong tilt toward younger friends. Mature people are “particularly vulnerable to losing their whole social network” if everyone in it is roughly the same age.

Advances in behavioral science are also changing. Carstensen points to a 2000 academic research report from the Swedish Kungsholmen Project, which concluded people who were happy with their personal community delayed the onset of dementia. “The assumption was that isolation is a consequence of the disease, not the cause,” she says.

Many of the issues Carstensen addresses in her book revolve around the interplay between cause, effect and correlation. As financial commentator Nick Murray wryly observed at Financial Advisor’s Inside Retirement conference in 2019, “Your clients aren’t living longer because they are reading Hemingway and listening to Vivaldi.”

Carstensen made predictions that same year. At the 2019 Invest In Women event, she told attendees, “Most of you are going to sail through your 80s into your 90s and some will live into your 100s.”

Five years on, her words seem truer now than before.