"Longevity" and "crisis": two words that these days appear next to each other all too frequently in headlines.
That people are living longer is a fact with pervasive global consequences. It directly affects not only retirement planning, but also a wide range of policies and programs, the evolution of the workplace and all manner of economic opportunities.
Longevity is also ushering in new social structures and creating unprecedented challenges—and they are not abstract: Aging is personal. While most of us hope to experience the new norms of longevity, how many of us are ready for the financial stress of paying for those extra years? How many of us are prepared for the potential health challenges that we may face as we live into our 80s and beyond?
But the opportunities are also real and unprecedented: Longer lives have created a vast pool of experience, capability and wealth that can become a driver for 21st century economic growth. Indeed, the transformative power of the generation now entering retirement should come as no surprise: Baby Boomers, born in the two decades following World War II, have reinvented every phase of life they have entered, often by design and sometimes through sheer force of numbers and economic clout.
"Societies that adapt to this changing demographic can reap a sizeable longevity dividend and will have a competitive advantage over those that do not," says Margaret Chan, Director-General of the World Health Organization.
While we at BlackRock recognize that what we do makes us prepared to offer insight on the implications for retirement investing, we think reaping the longevity dividend and averting crisis starts with fully understanding the massive demographic resource that is unfolding in front of us. From there, we'll need innovative thinking and action.