You need an ‘evergreen’ approach to life, work and health, economics professor Andrew Scott says

In the first session of his world economy class at the London Business School, economics professor Andrew Scott asked students to name the trends that will transform their lives and careers over the next several decades.

Artificial intelligence and climate change sparked much discussion among his students. Meanwhile, the trend of demographic change and “more old people” was seen as a negative.

In his new book, “The Longevity Imperative,” Scott maps out how longer lives create opportunity as well as responsibility. Societies, businesses and governments will all need to make changes, but the challenge, Scott says, isn’t that we’ll be dealing with more older people in the future – it’s that we need to prepare today for the possibility of living longer.

According to the World Health Organization, in 2020 there were more people age 60 and older than there were children under 5. Between 2015 and 2050, the proportion of the world’s population over age 60 will nearly double, from 12% to 22%.

Meanwhile, the U.S. is in the midst of a period when a record 4.1 million people will turn 65 in the next three years, according to the Alliance for Lifetime Income’s Retirement Income Institute, which coined the term “Peak 65.” This comes as many people are struggling to save enough for retirement, with two out of three Americans saying they fear running out of money more than they fear death, according to a 2024 report from Allianz Life.

Also read: Home prices, auto loans and Social Security: More than 4 million people are turning 65 this year, and it will affect you

In a conversation with MarketWatch, Scott said that in order to thrive over the long term, people need to focus now on their health, finances, skills and relationships.

MarketWatch: You talk with your students about how longevity could be as transformative as AI or climate change. How so?

Andrew Scott: It’s up there, completely. One of the problems we’ve got is that we focus on an aging society, which is about there being more old people. The fundamental change is that the young and middle-aged can expect to become old. The American Academy of Actuaries says that a child born today in the U.S. has a more than 50% chance of living to age 95. That’s really profound, because that’s never happened before. We haven’t structured a life, we haven’t got social institutions, we haven’t got financial plans, we haven’t got savings plans, we haven’t got education plans, we haven’t got social norms to encourage us to age well. That’s the most important thing.

When you go back to AI and climate change, if you think about what’s going to be really important for your future, it’s how I’m going to age. We’ve got to adapt to the fact that however old we are, we have more time ahead of us. That creates more opportunities but also new challenges to make sure we adapt and adjust to a longer life. We always talk about adapting and adjusting to AI and climate change, but we rarely talk about adapting and adjusting to an aging society.

MarketWatch: Can you explain your idea of the “evergreen agenda”?

Scott: We can now expect to become very old. We fear getting old. We fear outliving our health, our wealth, our finances, our skills, our relationships. What are you going to do now to age better? If you wait until you’re in your 60s or 70s to age better, you can still do things, but it’s much better if you start earlier.

To remain evergreen, you’ve got to be productive and engaged for longer, and healthier for longer. You have to remain vigilant that our health is OK, that our skills are OK, our finances and relationships. My grandfather reached 90, but he said he wasn’t prepared for it. We can’t have that excuse. We have a very high chance of living that long. We have to make sure we age well. How do you keep your health and skills and engagement and purpose and friendships alive? We work on these things in other parts of our lives, but now we need to do it in our later years.

‘How did we turn living longer and healthier into a bad news story?’Andrew Scott

MarketWatch: You said a child born in the U.S. has a 50% chance of living to age 95. What burden does this place on society and on the individual to fund that life?

Scott: Lifespan is getting ahead of health span. We really need to find ways to stay healthier for longer. We’re living for longer. It’s a very simple economic arithmetic. If you don’t want to see a fall in your standard of living, you need to produce more if you’re living longer. It could be that AI will solve that problem for us and we’ll become so productive that we won’t need to work longer, but absent that, we’re going to have to work for longer. We’re going to need to produce more if we want the same living standard.

That doesn’t mean we have to work in the way we currently do. Most governments tackle this by raising the retirement age, and I think that’s just wrong, because many people can’t work to the current retirement age. So if you’re increasing it, you’re not really improving things.

We need to find ways to support people being healthier and productive for longer. One of the things that really worries me is that from age 50 to the state pension age, lots of people drop out of the labor market. In the U.S. at about 50, about 80% of the people are employed. By 65, which is before the Social Security full retirement age, it’s down to about 30% to 35%. And for some people, it’s because they can afford to retire. For most people, it’s because they become ill, have to care for someone that’s ill, their skills are out of date, or ageism on part of the firms. Tackling that is really key. If you can keep more people working from 50 to the state retirement age, you create a lot of resources.

Perhaps you may need to raise the retirement age, too. If we are going to work until we are 70 or 80, we can’t do the same careers we’re doing now. In the 20th century, we created the idea of a three-stage life of education, work and retirement. Government is trying to stretch that out and say you’re going to work for longer.

I think we’re going to see more career shifts. It used to be that people came to a hard stop of work at a certain age. That’s no longer the case. People retire at different ages. We had this three-stage life and people took more leisure after retirement. I think now we’ll work longer, but we’ll take more leisure at this side of retirement. You’ll work maybe part-time. You’ll have a different glide path. You’ll retire and then un-retire. You’re see people starting their careers later, taking breaks. We’ll see a different distribution of leisure. It makes finances a bit more complicated, but it’s actually a good thing.

MarketWatch: In your book, you talk about the four horsemen of the apocalypse being longer lives, fewer children, declining populations and the old outnumbering the young. But you say there’s reason to look at this with optimism. What mindset shift do we need?

Scott: The concept of an aging society is really a remorselessly negative topic. No one gets excited about aging. It’s a word that increasingly nobody likes. Straight away you’re into the doom and despondency stuff.

On average we’re living longer and we’re healthier for longer. Sounds like quite good news to me. How did we turn living longer and healthier into a bad news story? Really, it’s a story of fewer children dying in their early years, fewer parents snatched away in midlife and more grandparents meeting their grandchildren. That sounds great. Of course, there’s a problem with dementia, [caregiving] and pensions, absolutely. But this is something that’s good news.

Falling populations isn’t necessarily a problem. We have environmental challenges. Some people want fewer children. I worry that governments say we have to have people having more kids to make sure Social Security survives, but that’s completely wrong way around. If people want to have fewer children, why don’t we change our institutions to give them what they want, rather than saying you have to do what’s needed to keep Social Security going?

We can’t underestimate the capacity of later life. We underestimate the capacity of older people. We always underinvested in later life. So we don’t arrive there with the skills, the purpose, the resources, the health that we need. That made sense when 5% of the people made it to 90. But when 50% of the people make it to 90, we’ve got to start preparing.

MarketWatch: Should we retire retirement?

Scott: When you think about it, it’s a terrible word. I’m very tired and I’m going to retire. In that sense, it needs a makeover. Even if you stop working, being engaged is key. People who are engaged, who have a reason to get out of bed, who have a purpose – they live longer and they’re happier. I think the challenge of retirement is that we have so many people entering that age group. There’s no one single way to do it.

For some people, a traditional retirement will work. You will stop work when the cost of work exceeds the benefit – the benefit of work is the money, the prestige or enjoyment. And the cost is not just the cost of traveling to work, but do I get physically tired, do I have someone to care for at home. It’s going to differ wildly for different people. This notion of retirement as a binary outcome – full-time or nothing – that’s clearly gone.

I think the punch line, though, is that given these gains in life expectancy, you’re going to have to work longer than other generations. And if you don’t like your current job or you can’t carry on in your current job, then you need to start thinking about a switch. That’s part of the new retirement.

MarketWatch: Your book talks about the need for better intergenerational harmony and cooperation. How do we accomplish this?

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