The new reality of longevity and investing

There is a quiet revolution happening. It is not about climate change, market cycles or artificial intelligence. It is about time - more specifically, how much more of it we have, and the ability to do what we want with that extra time.

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We're experiencing the most dramatic transformation in demographics ever recorded. In 2018, for the first time, there were more people over 60 than under five. The global population is getting older, with the median age rising from about 31 years old in 2020 to 36 years old in 2050. The fact is, living to 100 is becoming more common, and with this comes both unique opportunities and challenges.

Research from Fidelity International, in partnership with the National Innovation Centre for Ageing, reveals two in five people aged 50 and over are facing a retirement savings shortfall of at least a decade. The 10-year savings gap was revealed by comparing how long people expected their retirement savings to last against the average life expectancy in their location.

And with life expectancy continuing to rise, the challenge is only growing. By 2050, an estimated 3.67 million people globally are expected to reach 100. When measured against a potential 100-year lifespan, nearly four in five (81%) aged 50+ are underprepared by at least a decade.

Interestingly, individuals in Australia seem to be more ready for the new realities of longevity, with only 67% having under-planned by 10 years or more for a 100-year lifespan. This is in sharp contrast to countries like France (93%) or Hong Kong (82%), where a vast majority are under prepared for retirement.

Managing the “longevity risk”