Thursday, July 20, 2006

Superlongevity

As we know, static old age retirement systems are under severe stress due to increased longevity (ca. 2.5 years per decade). But that's not all: the World Future Society has an article about superlongevity. The proponents of superlongevity expect that the trend of increasing longevity will not remain stable, but will actually accelerate due to technological progress. Michael Zey reckons that life expectancy will rise to ca. 125 years by 2075 from the current ca. 80 years. This averages to rate of increase of about 6.4 years per decade. With that kind of perspective, the absolute necessity for more flexible and, most of all, delayed retirement should be painfully clear.

2 comments:

Martin WAGNER said...

In Switzerland, where I have exact figures, the increase of longevity is not as high as 2.5 years per decade, but it is rather in the area of 1 year per decade (in fact very stable, if not linear over the last 50 years !). This increase on liability costs approx. 0.5% additional return (if you do not already include the projected increase of life expectancy in your mortality tables.
So the pressure reduces slightly on this end ...

[For more details review e.g. the mortality tables used for Switzerland pension funds EVK 2000 or BVG 2000/2005. I a more than willing to give you more details, if need be.]

Chris said...

Could it be that the increase you're quoting refers to the remaining expectancy at the age of 60 or similar?

I am asking because the Science article I quoted in the linked post looks at the life expectancy of females at birth in various countries and finds a pretty linear rate of increase of some 2.4 years per decade ever since 1840. Looking at the remaining life expectancy is probably not a valid comparison (I am no demographer).