ETF Trends
ETF Trends

I recently shared an interesting conversation with Laura Carstensen, who has a unique take on living longer. As the director of the Stanford Center on Longevity, Laura believes that the longevity phenomenon can be felt at every stage of life with a profound effect on work, education and retirement. The highlights of our conversation follows:

A comment that struck me from your TED talk was that emerging longevity should improve the quality of life at all ages. Why is that?

Carstensen: When we talk about longer lives, the discussion tacitly assumes that the only part of life that got longer is old age. But given that we have 30 more years, we can live our lives differently all the way through. People typically say that they don’t have enough time. We do. For the first time in human history, we’ve got more time. So we could make young adulthood longer. We could enter the workforce more gradually and exit more gradually. We could reach the peak of our careers in our 60s and 70s instead of our 40s and 50s.

This seems so obvious that I have to ask why people aren’t doing this.

Carstensen: Humans are exquisitely sensitive to social norms. They tell us when to get an education, when to marry, when to retire, when to have children. It’s no coincidence that most of us go to college at 17 or 18 and not at a random age. The normative structure that is guiding us today evolved for lives that are half as long as they are today. We’re still saying work like a dog from 20 until you’re 65 and then, boom, you finally get some leisure. That has to change. People could come in and out of work throughout their lives and continue working later into their lives.

Aren’t there some very practical questions of how to pay for some of these changes?

Carstensen: Really, the question is what should a 100-year life look like? We need new financial thinking about these cultural changes. We still need to be savers to have high-quality lives, but we could be saving not only for retirement early in life, but also for sabbaticals or for education in your 40s and 50s so people could go back to school.

Is that something that should be thought about on a policy level?

Carstensen: Absolutely. We need major policy support to incentivize change. Employers are not jumping up and down saying, “Isn’t that great? We’re going to have an aging workforce.” Employers are saying older people cost too much and they’re out of date. But then they don’t train workers past their mid-40s because they think they’re on their way out. So you have a tautology where employers assume older workers are out of date and so they don’t give them the training that would keep them up to date.

John Shoven, a colleague of mine here at Stanford, says there should be a paid-up Social Security category where, after you’ve worked for 40 years, you and the employer don’t pay Social Security tax anymore. It incentivizes the worker because net income goes up and the employers save expenses. We could also make all older workers Medicare eligible to take some of the burden of higher medical costs off employers.

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