Planning for Longevity Boom

Saving: People Will Have 'To Work Until They Turn 80 Before They Can Afford to Retire'

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People are living longer than they thought they would when they initially started working and saving for retirement. Most people have not saved enough, and experts now predict that people will have to work until they turn 80 before they can afford to retire.

Edward Wall, portfolio specialist at Morningstar South Africa, says life expectancies are increasing, people are living longer, and there is a growing concern that current retirement savings will not be enough when people reach retirement age.

"People's life expectancy has doubled over the past decade, according to the World Health Organization. What is noticeable in the data is that a gap remains between countries, with developed countries typically having a higher life expectancy than developing nations," he says.

"There is a strong correlation between a country's health care spending and the life expectancy of its people. According to experts, the gap between developed and developing nations is expected to decrease over time as they play catch-up, with health care and access to it improving."

He says significant contributors include improvements in nutrition, sanitation and clean water, the development of vaccines and antibiotics, enhanced neonatal and maternal health care, and higher living standards.

Socioeconomic progress, characterized by higher incomes and poverty reduction, also facilitated greater access to health care and healthier lifestyles.

Wall says in South Africa life expectancy trends mirrored global progress until the 1990s, when the country faced a sharp reversal in life expectancy due to HIV/AIDS, falling from 63 years in 1990 to only 53 years in 2005, before widespread antiretroviral treatment helped to restore it to 65.5 years by 2019.