A decade ago I wrote about investing for 100-year olds. I wondered how we should work, save, invest – even have children or time our retirements – given ever-rising longevity?
If kids born in the developed world in the early years of 21st Century could expect to see the 22nd, what would that do for their investment time horizon?
Interesting questions – but my article proved to be a masterly example of the perils of market timing.
A few years later UK life expectancy actually fell!
Talk about being suckered in at the top.
Pundits dutifully penned gloomy pieces bemoaning how younger Britons would not live as long lives as their elders. But actually, it’s not quite so clear.
Full Fact reports UK life expectancy has stalled, not fallen:
According to the ONS: “Life expectancy at birth in the UK did not improve in 2015 to 2017 and remained at 79.2 years for males and 82.9 years for females.”
If you look at the trend over time in those figures, both male and female life expectancies rose slowly until about 2014, and they haven’t discernibly changed since.
On the other hand, the UK pension industry cut life expectancy forecasts by six months in 2019.
Some researchers such as those at The King’s Fund expect Covid-19 to further depress longevity forecasts:
The scale of excess mortality associated with Covid-19 thus far, and evidence that many lives have been cut short (for example almost 11% of Covid-19 deaths were among people aged under 65 years), is unprecedented in recent decades.
The wider socio-economic impacts of the pandemic could also have an adverse impact on health and mortality overall.
They state the influence that the pandemic will have on life expectancy in 2020 will become clear in due course.
Oh, joy.
What the Dickens?
Even leaving aside the recent choppiness in the prognosis for longevity, it’s clear that in the UK the most dramatic advances happened long ago.
To quote those same researchers:
Males born in 1841 could expect to live to only 40.2 years and females to 42.2 years, mainly because of high mortality rates in infancy and childhood.
Improvements in nutrition, hygiene, housing, sanitation, control of infectious diseases and other public health measures reduced mortality rates, increasing life expectancy to 55 years for males and 59 years for females by 1920.
That’s a big leap by the early 20th Century. Compare though the 1841 figures with life expectancy in the year 2000. By then newly-born girls could expect to live until their 80s, and men hope to see their late 70s.
That means life expectancy almost doubled!
Perhaps it’s no surprise if there’s some frustration with this century’s more erratic advances:
Looking at this graph, you might infer that life expectancy advances have slowed to a crawl.1
However it’s not as if there’s been no progress. (I’m sure most people who got an extra three years wouldn’t have wanted to give them back…)
It’s also worth noting that life expectancy is increasingly stratified between different social groups.
Socially-deprived male smokers in ex-industrial towns who haven’t worked for two decades could indeed (unfortunately) be seeing their life expectancy fall.
But clued-up Monevator readers with the wherewithal to gaze ahead 40 years and to save towards it – keeping fit en-route – probably have more to look forward to.
Want more? My co-blogger The Accumulator wrote a great post on how to think about your personal life expectancy (and another one for couples).
Tweak your financial plan(s) accordingly.
Who wants to live forever?
What if the big advances in life expectancy aren’t over? Not just in terms of how long you live – but how long you will stay healthy?
Imagine if you lived until your 150th birthday, and you were still very active at 140.
What would that do to how you work, save, spend, and invest?
Another 50% or more added to our life expectancy sounds like science fiction. Currently it is science fiction…
…unless you’re a yeast cell, a modified mouse, or even a primate that has taken part in one of the various longevity research projects making waves around the world.
In that case certain supplements, eating protocols, and gene-related therapies may have already increased your lifespan by 20-50%.
My interest in this was piqued by my girlfriend, who told me on our first date that she planned to live until 150.
“Go on a few more dates with me and it’ll certainly feel that way,” I said.
Morbid banter aside, she also pointed me towards the work of Harvard Medical School biologist David Sinclair and his 2019 book Lifespan.
Sinclair believes we should treat aging as a disease to be cured, rather than an immutable law of nature.
In Lifespan he introduces the ‘information theory of ageing’. The idea is that instability in an organism – grey hair, wrinkly skin, cancer, ageing – amasses over time due to the loss of the organism’s ability to repair genetic damage.
From Wikipedia:
The authors begin by seeking to characterize how professionals view the hallmarks of aging, including genomic instability caused by DNA damage; alterations to the epigenome that controls which genes are turned on and off; loss of healthy protein maintenance, known as proteostasis; exhaustion of stem cells; and the production of inflammatory molecules.
“Address one of these, and you can slow down aging,” the authors argue.
“Address all of them, and you might not age.”
I was skeptical when I began the book. Sinclair is a persuasive evangelist, and he largely won me over. I was already an intermittent faster and a firm believer in exercise, as I shared on Monevator years ago. I’m now looking into other anti-ageing hacks cited by Sinclair, such as resveratrol and metformin.
I already think we’re at the start of a transition towards self-directed health – soon to be better informed by genetic testing – that will further widen the gap between the healthy and unhealthy.
For instance, I subscribe to the home blood testing service Thriva. It helped me to get my cholesterol down without resorting to the statins that doctors were pushing towards me:
Source: Thriva
I suspect cholesterol isn’t the whole story when it comes to heart disease. But I also believe the actions I took to lower it – dietary changes, and further reducing body fat – will lead to a healthier life. I used cholesterol as a marker.
Thriva tracks cholesterol and many other metrics in one place, making it very easy to monitor. Consider giving it a go. (That’s an affiliate link incidentally. Sign-up via it and we both get £10 off our next Thriva test.)
Monitoring today takes a pinprick blood test. It won’t be too long though until most parameters can be measured in real-time by wearables or implants.
FIRE for centenarians
What all this means for planning for retirement is anyone’s guess.
Your first move might be to massively inflate the numbers you pop into your nearest retirement calculator.
Perhaps age-reversing treatments might enable you to retire fairly healthy at 85 and then to live for another 50-70 years?
You might fear this will strain your withdrawal rate calculations to the limit – until you remember you’ll also have another 20 years of working and earning for your nest egg to compound before you need to touch it!
Though we can obviously assume the state retirement age will have risen above – ahem – 67 in a live-to-150 world.
Which is a clue to the real elephant in the room. Our economies are just not ready for lots of human beings to routinely live well beyond 100.
I’d imagine every annuity-providing life assurance company would go bust tomorrow if some protege of Sinclair’s announced a surefire way to give retirees an additional 30 years of extra life expectancy.
As for all those companies who still have legions of final salary pension claimants on their books…
Right now the world looks gloomy. Domestic politics is dire, the earth is on fire, a new Cold War between the US and China looms – oh, and there’s a pandemic raging. It’s easier to imagine lives getting shorter than longer.
The history of progress since the start of the scientific era tells us we should hedge our bets.
I still don’t expect to live to 150, or anything like it.
But I wouldn’t rule it out!
- It’s tempting to do a spurious correlation with similarly flattish interest rates. Hedge funds have been marketed on less. [↩]
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Interesting article, but I don’t think you’ve taken account of infant mortality.
In 1841 far more children died before reaching adulthood, and could get concerned about investing for their future. If you made it through childhood then life expectancy was much better, a 40 years old in 1841, life expectancy was 67.3 year, the life expectancy of a 40 year old in 2013 looks to be about 82 years.
https://ourworldindata.org/life-expectancy
Though we can obviously assume the state retirement age will have risen above – ahem – 57 in a live-to-150 world. – typo?
@Bsdb3 — Definitely a big factor.
@ian — Oops, thanks!
At 66, I’d love to have 84 more years of compounding. 60/40 VWRL/TI5G, lovely.
You’ve misattributed the cause for your cholesterol going down – Thriva isn’t responsible for your cholesterol going down. The life style adjustments you made are responsible for your cholesterol going down.
Thriva tracked it quicker than your GP could have but that’s all.
@Jon — Um, I understand that.
‘oh, and there’s a pandemic raging’ – can you clarify? Currently for Sept. in the UK, with-Covid mortality is 10x lower than with-Flu/Pnuemonia (ref: ONS website). Are you referring to the pandemic of insanity?
Hi Onedrew,
If I’m going to make my 60/40 portfolio last ’til 150 years old, can you help me with why TI5G will do for the bond part?
(genuinely interested… having so much problem with bond part of portfolio)
Hi Algernond
I like TI5G because it is pretty stable, inflation proof in US terms, currently pays 3.7% and is hedged to the £. I also hold VAGP, and I like its iShares equivalent AGBP – both get frequent mentions in comments here – which are also pretty stable but longer duration with a lower divi.
I guess the point with the pandemic is that it’s not yet over so too early to put it in the rear view mirror. Nor do we know the longer term effects – both individual and more broadly. We have not yet been through a full flu season with the possible compounding effects of C19.
But it is already likely either directly or indirectly to have life span limiting effects on many of those with comorbidities and the elderly. Sure some might have died in the next year or so anyhow, but them going “a little earlier” certainly doesn’t help the case for saying we are living longer.
Onedrew – Thanks!
My SIPP is actually VWRL/VAGP with a very small bit of TI5G. I’ve been wondering about increasing it, but also wonderoing about hedged vs. unhedged 0-5yr TIPS – any thoughts?
C – Coronavirus strains cause ~ 20% of the ‘common cold’. They are not new.
New strains of viruses are not new. What is new is the State/Media propaganda of fear that is currently going on.
@Onedrew I just looked up the TI5G fact sheet. The weighted average YTM is given as 0.16%. Interested how you get “currently pays 3.7%”?
@Algernond Be aware that hedging to GBP will give you a negative “hedge return” that will tend to bring the yield down. With nominal bonds it will bring it down roughly to the equivalent gilt yield, not sure how it works with linkers.
c-strong: https://www.ishares.com/uk/individual/en/products/295700/ishares-tips-0-5-ucits-etf-fund. Or calculate from justetf.com at 18p dividend in last year against 489p price.
Algernond: The unhedged equivalent TP05 does pay a similar divi (according to justetf.com) and, like the recently discussed IBTM, did get a nice bounce against the fall of VWRL on March 23. But generally I like overseas bonds hedged to the quid to keep the volatility under control. I guess if you held substantial amounts of both versions you could make a rebalancing bonus if the £$ relationship remains turbulent. Curiously, to me at least, the K11D gives a low risk rating of 2 for both TI5G and TP05 despite the currency effects on the latter.
Interesting article thanks – especially the additional detail on what you have been researching on your own health. A second blogging website awaits!!
It always baffles me how much time and money we spend monitoring some aspects of ourselves like the health of our cars and finances Etc – whilst an MOT of our own bodies is largely ignored.
Re my last comment on risk levels for TP05: it appears that wherever I look, the links to the KIID for TP05 take you to the form for TIP5, which is the dollar-priced version. If you call up the graphs for both, TP05 is much more volatile, following roughly the course of USDGBP. I think the correct risk level for TP05 must be about 4.
@OneDrew. The distribution yield of TI5G is just a function of coupon income. Given the front-end of the TIPS market is full of old bonds that were issued with higher coupons, then the average weighted coupon of the fund is much higher than the weighted yield.
Going forward, the real yield on the front-end is around -1%. If prevailing US CPI is say 1.2% over the next year then the actual nominal return over 1 year would be 0.2% (everything else equal). Any coupon distribution paid above that will be taken out of capital.
Algernond – my understanding is that coronaviruses is the name for a family of viruses. Some may be relatively innocuous like the common cold, others rather less so like MERS. C19 falls on the spectrum between the two – but probably closer in severity to SARS and MERS (although clearly not as deadly). Having likely experienced it myself, I can say it was no mere common cold which I typically just soldier on through. With my possible C19 experience, I was confined to bed for four days with something like the worst flu (not cold) I’ve ever had, and over the next six weeks a variety of symptoms would periodically re-surface at different intensities before finally disappearing. It is easy to imagine it being fatal to someone more vulnerable. I’m on the fence on whether the state reaction is proportionate – only time will tell as we learn more – and I do my best to avoid media hysteria in any form.
ZXspectrum48k: That’s disappointing to read. I was happy with 3.5%+ total returns over the last couple of years. The effective duration of less than three years also appealed as a better-than-cash alternative.
The history of increasing lifespan has been one of decreasing returns. The biggest increase was from urban sanitation, and gains since then have been a mixture of preventive (e.g. vaccination, anti-smoking campaigns) and curative (e.g. antibiotics) measures. But it is still true that we each have a 100% risk of death, so not dying of bacterial disease meant that other illnesses became more important as causes of death (cancer, heart disease). Better ways of dealing with those will no doubt again shift the balance to other life-limiting conditions of old age. A ten year increase in life expectancy will be slow to achieve and reaching 150 won’t happen any time soon, though there will no doubt be a continuing increase in the small fraction who live to 100. My guess is that even 110 will still be very rare in 2100.
Obviously one can take steps that might increase your chance of being in the top half of the mortality distribution curve. But that is based on population probabilities with no guarantee you will actually benefit personally: your improved blood cholesterol may turn out to be insignificant if it happens your personal cardiac health is dominated by a poor combination of genes. Though of course the dietary and exercise changes will still bring lifestyle benefits.
Obviously the big question is what it means in terms of investing. While mention of SWR always provokes arguments, the calculations would appear to show that withdrawal rates – and thus the total investment needed – change little for them to last 30 years instead of 25. Whether the same investment strategy is fine is more problematic, quite a lot of the unit trusts (as they would have been called then) that people invested in 25 years ago have not survived unchanged so I imagine the future will bring a need to periodically re-assess ones investments.
I read Lifespan and found it fascinating. It’s a growing area of science, unpicking cellular degeneration (what we call ageing). Cellular regeneration. One of the points the scientists have noted is the relative wildly different average lifespans of different species. Which they can explain at the cellular level, not simply that some species are more likely to be killed than others. Whilst people immediately think “I don’t want to live that long”, it won’t be on today’s terms. By repairing cell atrophy and damage, the body will last longer, in better health, on average, barring accident, bad luck, human inactivity, poor diet and alcohol/substance abuse. IIRC from the book, the data is a person born today in the UK/developed world has a 50:50 chance of living to 100.
The search for the elixir of life is as old as humanity itself 😉 The language it’s spoken in changes, mais plus ca change, plus c’est la meme chose.
Also, for a moment, think about what this would actually mean in a society like ours. Let’s just look the other way as far as the transitory massive increase in human population this implies, and consider the process of wealth accumulation. Yes, your money would compound for longer, but your mortgage would be a 60-year old one, because we have too few houses as it is, never mind needing twice as many.
It’s also not just your body that ages. Accumulated experience was good when technologies changed over long periods, and craft skills were more important. But it’s not necessarily conducive to technical innovation, you need young sorts to drive and adapt to new opportunities. Mark Zuckerberg said that young people are just smarter and while it was there to wind people up, there was some point – the absence of dependants, simpler lives and open minds do help adapt to new things well.
All of these could be adapted to, but I bet that a world with 200-year human lifespans would find that its passive investing funds would compound at a lower annual rate than today’s when integrates over decades. It wouldn’t necessarily be a bad world, if we could fix the population problem, but it wouldn’t simply be one where you’d have twice as many years of financial independence IMO.
I am tickled to see scientism replace religion. Rich old men never want to die. The founder of the Immortalist society, Ettinger, went off-message when he died in 2011, a frozen head just doesn’t cut it.
I have worked on the front line of the NHS for nearly 40 years, take it from me a longer life is is NOT always desirable.
@ Ermine – I wonder if Zuckerberg will feel the same way when he’s an old man? And I wonder if the kind of smarts he was referring to were largely relevant for the coding dungeons of Facebook? Experience is not done yet.
Absence of dependents, simpler lives – a good description of many people after the kids fly the nest. Regardless, surely retaining an open mind is a characteristic than can be cultivated like any other, not age-related. My tiny nieces aren’t too open-minded about eating their greens.
Yuval Harari in Homo Deus does a good job of sketching the inequalities that could flow from competition for anti-aging technologies and the possibility that we become highly risk adverse once only accidents and villainy come between us and near immortality.
I wonder how much more time I’d waste if I knew I had more of it.
@TA. I think once a parent, always a parent. You never ‘don’t have dependants’. I mean, they (hopefully) no longer need financial support (although maybe not, think how many families are helping their offspring onto the housing ladder), but I’m not sure it’s possible to ever recapture the freedom of not having anyone else to worry about!
And that’s before you factor in the frail elderly relatives and the grandchildren…
Maybe I will feel differently in a decade or so.
> Absence of dependents, simpler lives – a good description of many people after the kids fly the nest.
Only the child-free, by observation. Modern kids all too often don’t fly the nest. I’m not snowflaking them – it’s the world their parents built. I’ve had the experience of a few too many drinks hearing some benighted middle – class parent saying how their BTL was a nice little earner and in the next breath bemoaning their kids can’t afford a house. And venturing the comment ‘ever join the dots?’
> we become highly risk adverse once only accidents and villainy come between us and near immortality.
Isaac Asimov got there first in 1957 with the Solarians in The Naked Sun and then had to write the Foundation Trilogy so the robots could babysit decadent humanity.
@ermine – whilst it’s always gratifying to see SF pop up in other favourite areas of interest don’t you mean the 3 Laws of Robotics rather than the (original) Foundation Trilogy? Of course he went on to write the other robot books (and didn’t I, Robot and Caves of Steel predate the Naked Sun?). And longevity is quite a theme in many SF authors’ universes – think Louis Wu and his 200th birthday at the start of Ringworld – even without Vinge’s singularities.
@TI apologies for being way OT (but I missed out on the World SF Con here due to C19 and need some consolation.)
I think Sinclair is correct in stating that global population will level out due to the same trends that the developed world has experienced – and punditry predicts zero growth by 2100 – although by that time some countries will have experienced reductions in population due to demographic trends (China? Japan?). Hans Rosling had a memorable TED talk on this a few years ago – https://www.ted.com/talks/hans_rosling_global_population_growth_box_by_box?language=en
Quite what this may mean for investing I’m unlikely to find out given I’m 60 very soon!
Yes, they’ll need to draft in the oldies to counter those declining demographics, or the robots, or the oldie-cyborgs. I’m gonna get me an exo-skeleton.
A very refreshing inclusion in Lifespan is a chapter where Sinclair puts the other side of (part of) the argument — his own son is skeptical of the benefits of longevity research, and so he tries to articulate the ‘opposition’ view.
He’s not too worried about concerns about prolonged infirmity with age, because his view is that the extra years will largely be healthy extra years — all the treatments/approaches he discusses are about repairing damage / resetting aging markers, rather than keeping an increasingly frail body alive. So if they work, we would in theory be healthier for longer to enjoy them.
But he does worry about politics ossifying with an increasingly aged popular. He points out that reactionary/nationalistic politics is often correlated with older voters. He argues we’re seeing that in the US and UK to some extent.
It’s a short chapter though and by the next he’s saying ‘elders’ are one reason to be hopeful for the world. He believes one reason life is generally better today for more people despite a far higher global population is because of the impact of older, wiser and more experienced people hanging around for longer. He thinks the short-shelf life of older workers is a discrimination that isn’t justified by evidence and is some sort of artifact of the advent of printing. Can’t say I was hugely convinced, but thought provoking.
Unlike his son, Sinclair’s father is a big advocate of the anti-aging research, incidentally. We’re told he was a skeptic won over by trying some of the promising leads and seeing a result.
I think the book is well worth a read. Perhaps it’ll come up cheap on Kindle some time!
The book is on my list. Have you seen any convincing research on whether old people become more nationalistic or belonged to a generation that lived in a more nationalistic era and then grew old?
Baby boomers grew up in an era when the British Empire was still a thing. We’d just fought a war against the Germans. The population was less diverse than it is today and we were a more socially conservative society than we are now. It wouldn’t be surprising if those values were more prevalent in that generation than the one that came after. And so on down the line.
I can see the other side of the argument too, I’m just interested in case you’ve read anything on that? Basically I want to know if I’m doomed to wearing Union Jack underpants.
Kim Stanley Robinson’s Mars trilogy delves into the impact on humanity after the discovery of anti-aging treatments. The old stay mentally vigorous and open-minded – though lose contact with their former lives because they can’t retrieve the memories. They inadvertently suppress the next-generation of leaders because they won’t move aside and Malthus has a field day. There’s a cascade of unintended consequences but one of the things I like about the books is that they are neither dystopian nor utopian. Or they’re both. A bit like real life.
> Basically I want to know if I’m doomed to wearing Union Jack underpants.
Probably not. Although you have enumerated the changes you observed. What you can’t enumerate is the equivalent parts of the society that you grew up in which the young’uns of your dotage will rattle off about you 😉 It wont be UJ underpants, it will be whatever cause da yoof of that time to roll their eyes and go “OK GenXer” or whatever the relevant comment will be.
However, there has been a fair about of research about the life cycle and psychology. Gail Sheehy’s Passages is pretty good, derived from many interviews and some longitudinal study and Murray Stein’s In Midlife, for example As one of these older gits myself:
Increased experience makes you more resistant to some types of change. As a young pup in the workplace, I could almost believe the value of the latest management fad (Total Quality Management, Agile Working, pair programming) the first time I came across it. By then end I was always asking myself so why should this work this time when it didn’t the last three times we tried it This can be challenging for organisations. It can also save them from some problems. A cynical Ermine in the last three years of his working life at The Firm probably saved them more than my lifetime salary by refusing to stop asking awkward questions about one contractor’s proposed solutions that seemed to be at variance with my experience of engineering. I was open to being convinced, but wanted to see a working real life example…
The first half of life is often about what you do, the second is about what you are. Lifespan could turn the second half of live into the second three-quarters, that’s not necessarily a bad thing, it could be congruent with
> He believes one reason life is generally better today for more people despite a far higher global population is because of the impact of older, wiser and more experienced people hanging around for longer.
although it is tough to ignore the counterfactual examples in the Anglosphere at the moment 😉 As the song said, “The memories of a man in his old age, Are the deeds of a man in his prime.” so perhaps this is the last hurrah of the Boomer generation trying to relive it’s Imperial glory. In the UK at least 😉
Some of the midlife shift from what you do to what you are are associated with lifespan-invariant things. For many people having children drives a focus away from what you do. If this remains a twenties-to-thirties thing in the longer lifespan model then the psychological journey will have that transition earlier than midlife. If not, then the mid-life transition will shift later, because it is also about the balance between what you can realistically hope to achieve compare to what you have achieved.
Zuckerberg had a point. If I was setting up a startup and needed creativity and out of the box thinking I would stuff it with the young, free and single, though if I wanted competence and effective sustained action perhaps not so much. Society also is exposed to these things – many of the changes of the 1960s were because the baby boom lifted the ratio of young people in the population. If humans lived 200 years then the population of 18-30 year olds would drop quite massively.
> Foundation
Yes, I’ve just finished one of the posthumous sequels Foundation’s Triumph which has the robotic babysitting theme, the original trilogy was a lot less robotically heavy. Indeed the contrast between the original, which was more optimistic in the potential of humanity to solve our issues compared to David Brin’s sequel is telling. In the latter, the robots are leaning against the original sin of humanity, its tendency for the rich to accrue power and resources, and most specifically to favour their offspring thus generating caste systems. Or perhaps it is simply the difference between my teenage reader’s eyes compared to the loss of innocence over the following four decades.
@ Ermine – interesting and thank you for the book tips. I take your point that I’ll probably be stuck with some outmoded belief that will cause shock and guffaws in equal measure. Perhaps they’ll be troubled by my insistence that the moon-landings really happened.
Still it wouldn’t surprise me if generation gaps like that could entirely disappear – especially in a longer-lived world. On the one hand generation gaps probably barely existed in times when social change moved at a glacial pace, on the other I wonder if exposure to turbo-change over 150 years could erase the draft written in the first 20 years of life.
I think Zuckerberg is wrong because when he made that statement he was a young man and presumably (I’ll take a punt here) thinking about hiring more people like himself. I think that we generally benefit from greater diversity of all kinds including age. Your own example makes the case – your organisation benefitted from listening and learning to someone who’d seen that movie before. Your long-beard meant you were prepared to speak out whereas the less gnarly may be more conformist – not always a good thing. Institutional memory is supposed to be a valuable commodity and that’s going to come from the vets.
Well I recently gave XPSR some of my money ( basic resources aka LSE quoted miners), plus a bit to emerging markets and emerging market managed bond fund.
Keeping the brain healthy will be the challenge: dementia is generally winning the battle.
@Ermine
were you a programmer back in the day!? I always thought you were an electrical engineer or something!