The Silver Economy: Opportunity in an Aging World

(upbeat music) - Hello, and welcome to Life and Long Jebadi, presented by Prodential Financial. I'm David Blanchett, head of retirement research at Prodential. On this show, we explore the changing longevity landscape and how our longer lives are impacting the ways we think about our health, careers, relationships, and financial planning. Over the past century, we've seen human life expectancy nearly double. This comes with challenges and opportunities and systems are still working to catch up with societal expectations around aging. Today, I'm joining my Melissa Gong Mitchell, executive director at the Global Coalition on Aging. On this episode, Melissa and I discuss what it means to age and how we as a society, we proactive about breaking out of the conventional notions around aging. We also dig in the implications of an older workforce, what this means for an overarching retirement landscape. And now, here's Melissa Gong Mitchell. Melissa, thanks so much for joining me today. - Thank you for having me. I'm really excited to be here. We got a lot to dig into. - We sure do. So, kick us off and share with our listeners and overview of what the Global Coalition on Aging is. - Global Coalition on Aging is an organization that represents global companies from across sectors. So, we have companies from healthcare, pharma diagnostics, to financial services and insurance, and from technology to home care and transportation. So, companies that are addressing that there's an aging shift that we need to do something about. And we come together and identify opportunities associated with this mega trend and engage with governments, nonprofits, academics, global institutions, and across all facets of society to make sure that we are changing the way we think about aging and taking action to view aging as a net positive. So, we serve as a business voice on aging, advancing innovative ideas, policy shifts, and infrastructure changes to optimize what we see as a gift of our longer lives. So, for 15 years, GCOA has been working to advance a positive approach to aging by building awareness, by connecting advocacy to drive changes in policies and workplace practices and in mindsets about population aging. As an example of our work, we address the diseases or other health conditions that increase in prevalence with age. So, everything from cancer and Alzheimer's disease to osteoporosis and cardiovascular disease, recognizing that these aren't inevitable parts of aging because we do have incredible innovations and prevention and treatment and care. Hopefully that helps give you a sense about who we are and what we do. - So, tell me about your role and what kind of work you've done over your career to kind of lead you where you are today. - I've been the executive director of the Global Coalition on aging for about 15 years now. And my background is in communications, advocacy and policy here in the US, having worked with the US travel industry here in DC for the first decade of my career. And that was really fulfilling because they started working right before 9/11, right? That industry completely changed when that happened. And so, as we thought about how we could change policy to understand how to really realize the opportunities economically and diplomatically of travel, that was a really important piece of work and travel shut down at her businesses, but when you don't travel, you don't see other cultures. You don't experience new places and those are reasons to fight for a driving travel industry. It was an exciting time 'cause we got to push some important policy about how to promote the US abroad. After I did that kind of policy advocacy focus work, I was looking at a potential career change and got my MBA to kind of focus more on the business side of things. Well, that's when I had the good fortune of meeting my current, now boss, Mike Hoden. He is the CEO and founder of the Global Coalition on Aging and he's managing partner of our consulting firm called High Lantern Group. And so he came to me and said, we're creating a strategic communications consulting firm to help clients operate successfully at the intersection of business and public policy. And the biggest issue that people don't know about yet is population aging. I myself did not know that yet, but I was fascinated and I was really all in. So what do I get to do? I get to talk about this issue. I get to find business solutions. I get to look at policy solutions, engage with governments and help to change hearts, minds, and policies and practices and travel around the world to do that. So it's really fun work. - So it's funny image in travel. I know you guys just released a report called travel for the healthy longevity. Maybe talk about that briefly. - Yeah, so because I started my career in travel, I really love the idea of how do we incorporate aging and travel together. But healthy aging really is the goal, right? That we're all shooting for here. How do we live? Not only these longer lives that we've been gifted, but how do we make sure those lives are healthier? So about 12 or 13 years ago, we partnered with the Trans-America Institute to investigate what are the benefits of travel to healthy aging, and by digging into existing research, we found that the activities that are associated with travel actually have positive health benefits. So this year, we kind of took all of that information, recognizing that when we say the health benefits and the healthy aging benefits, that's anything from walking around in a city or exploring to cognitive benefits. When you're navigating those new cities, you're going to museum and seeing and learning new things, but also the social aspects of that. And so in our research, we found that tourism experience or associated with the 59% lower relative risk of dementia, long distance travels, linked to lower loneliness, fewer depressive symptoms, higher cognitive function, and older adults, and vacation effects on work stress and burnout persist up to three weeks after return. And so that also led us to this finding and understanding that travel, while we know, people aspire to save for travel in their retirement, that travel each step of the way is actually really critical for the healthy aging process. This report that we just put out earlier this year kind of took it a step further to say, as we're thinking about savings, what we're saving for, what an experience we want to have in our longevity, we recognize that multigenerational travel is part of this silver kind of travel boom. Multigenerational travel comes off as a huge trend that has incredible benefits across the life course and more and more people are doing that. So if 57% of grandparents are planning a multigenerational trip, really half of all family travel now spans several generations. And as I mentioned, travel is a top retirement dream among US adults. And so when you combine this idea that also many parents want to leave a legacy behind that's about experiences, not necessarily inheritance, how you leave that legacy behind is changing and travel is a huge part of that. And just a little tidbit from employers to think about Ernst & Young found that each additional 10 hours of vacation that an employee takes lifts their year in performance by 8%. So there are short term benefits, but also as we think about the fact that we have an aging workforce that aligns with this aging mega trend, there's long term benefits of keeping older employees engaged, active, and healthy. - Well, you know, we just got back from a two-week vacation with my wife's parents, my wife's brother, and all our kids. So that was very much a multigenerational family vacation. - And those are experiences your kids are gonna remember forever. We had one recently do. - You mentioned this, I think briefly, but let's talk about this idea of the silver economy. May we define the topic and explain why it's so important? - Yeah, maybe I'll take a little bit of step back just to talk about the aging trends broadly and dig into what the silver economy piece of it is. I can't stress enough that aging really is the most transformative trend of our time. And aging is a couple of things. It's this combination of our longer lives, but it's also coupled with our lower birth rates that creates this phenomenon where for the first time in human history, we have more older people than young people across society. This is new and it's baked in for decades to come. So we had a population pyramid where all the young people on the bottom support the older people on the top and now it's slipping and our systems just can't support it. So as I mentioned, we really worked towards making full big changes because in a single century, we've nearly double human life expectancy. And that's a huge achievement and it wasn't accidental, right? We invested in public health. We invested in sanitation and clean water to make sure people had access to it. The advent of antibiotics, maternal and child health, and these are the things that led to our longevity, right? And so if you think about childhood immunization, these interventions took children who would have died in infectious disease and turned them into adults and eventually into society's older adults. So as we think about what is the silver economy and how do we grow it, it's really important to think about what is our goal, right? It is to maintain the functional ability to do things that we value and really emphasizes true life course approach. But I think it's important to understand that just adding on years to our life is very different than adding life to our years. And we want those lives to be as fulfilling as possible. So I think as we go about our work at the Global Coalition on Aging, whether you're a finance minister, health minister, business leader, we need to be. thinking about what are the policies that do keep us healthier for longer. So in itself, the silver economy is cute. The silver economy represents an upwards of $22 trillion and continues to grow. And I think the important thing is when you ask me the question, what is the silver economy, it is an economic opportunity. And large global companies and all employers, public and private really need to work to address the needs of their aging workforces and their aging consumer bases. Because again, this is where the trends are going. And we also have to recognize that an older population is not all the same. That 50 plus is not all the same. 65 plus is not all the same. But to do that, we really have to also change our traditional concept of aging being associated with disability and dependence to understand that aging is actually a time of activity, productivity, and social benefit. - There's definitely shifting mindsets around aging. What do you think people get right and wrong about aging? What needs to change? - There's so many things that people get wrong. And we see it in our daily lives, right? I mean, I had so many conversations with family members and my parents over the course of the last several years 'cause we are getting to that age. We're seeing kind of the generation ahead of us pass along. But I think that while it's inevitable, people are going to get older and that can come with disability and dependence, it does not automatically have to be associated with that. I think the other thing that people get wrong and when they look at our name, the global coalition on aging often they think, oh, they're talking about older people over there kind of separated from everyone else. But when we talk about aging, it is about all of us. And I recognize that as I'm talking about aging and thinking about the fact that my daughter, who was almost 10 years old, she has about a 50% chance to live to 100 years old. She needs to be thinking and planning in terms of what does that longevity look like for her? And if we are changing policies and practices now in the workplace or through governments, we get it right for today's older population and today's older generation, we're getting it right for our generation and our children's generations to follow. And also if we look at it in the context of history and what our perceptions of retirement have been over time, when retirement age was set at 65 almost 100 years ago, we weren't supposed to reach the age of 65 in mass. And between now and 2029, there are going to be 30.4 million Americans that are going to reach traditional retirement age. So that's a huge number of people and we need to figure out is everybody retiring and looking at retirement as an endpoint at that age or are they looking at it as a whole new life phase that's full of exciting possibilities? And I think that's a really important thing that we need to keep in mind. So perceptions of what it means to be older is really important for us to consider. Why shouldn't our workforces be older as well? These perceptions of aging can be this incredible opportunity and we just have to break out of our conventional assumptions. Maybe this is just my opinion, but I think there is a bit of ageism in the workplace, right? I think that if you look at medium job tenure among older workers, that's been going down with some cargo that should be going the direction. How do we as a society and companies address this perception to your earlier point that you're done at age 65? You gotta do it, you have to address it. And I think that's what's interesting 'cause there are perceptions. And I think perceptions hopefully are changing. I mean, we know there's great research that shows that intergenerational teams are actually more productive than single generation teams. We recognize over time that older generations they want to work. They're a great percentage of people who need to work because they need the income, but many want to work 'cause they want to continue to have that cognitive stimulation that's social engagement. And because we all want purpose and the things that we do, right? So retirement at 65, go and play golf for 30 years. Is that what you want to do? Maybe it is. And it's interesting too, because our laws actually say, age discrimination in the workplace that they can bring suits on is at 40. And we're talking about, as we get up to 65, but actual discrimination is classified at the age of 40. So we know that ageism, for instance, 'cause we see it not only in the workplace, we see it in the healthcare system. We see individuals being discriminated against not getting a procedure or diagnosing someone too quickly because they are older and they're dismissed. And that actually has a cost at upwards of $63 billion to our system. And so ageism needs to be removed from the equation, of course, but how can we help do that? I think one of the things that's really important to recognize is there's research that shows positive use of aging actually has positive impact on your memory and can add seven and a half years to your life. So again, one of the things that I say to other family members who lament aging, I'm just getting old. This is breaking down. I can't handle it anymore. I'm getting old. My answer is it's so much better than the alternative. If you're blessed to have these longer lives, let's figure out how to make the most of them. - Awesome. So you're called the global coalition on aging. What stands out to you is the biggest differences. You compare, for example, the US and other societies when it comes to things like aging. - The important thing, David, to recognize is that every society around the world is aging. So here's a way to think about it. A measure to understand the rate of aging is how long it takes a country to go from 7% of its population being over 65. That's what demographers call an aging society. And how long does it take them to go from 7% to 14%, which is called an aged society? And then you become a super aged society at 20%. So Japan wins that race. So France took about 115 years to go from 7% to 14% over 65. The United States, it's taken us about 70 years to do that. Generally, it calls OECD nations. That has given us more time to structure pension systems, adapt healthcare systems and infrastructure, accumulate national wealth that could cushion this transition. The challenge in growth economies, lower income countries is that they're getting old before they have a chance to get rich. So in Turkey and India, each of those will make this transition from aging to aged societies in 25 years. In Brazil, it's about nine years and Vietnam, it's eight years. So at France had more than a century to adjust to and prepare for Vietnam, well, it'll happen in a single political cycle. So I think it's important to understand like the urgency with which to kind of make some of these policy changes and how we learn from societies around the world. - One of my big focuses is on retirement income, right? And we think about retirement, structurally, it's kind of changing here, right? And the past people would be concerned about saving enough money, but now we've got increasing life spans and all these issues around retirement. How do you think people should be changing the way they plan for the retirement, given this increasingly aged global population? - Retirement, I personally don't like the word retirement. I know you use it across your industry. You still have to do that because it is a marker of something that I think it's important to recognize that retirement is changing, right? The concept of retirement, it was created at a time. It weren't supposed to live past that age and chronological age. Again, I think it's a bad marker for most things. And so as we're thinking and preparing and planning, we know people actually are looking at retiring, they're looking at retiring later. For the reasons I mentioned earlier, they want to work in some capacity. It may not be the same thing. We know that a lot of people after they officially retire, they actually come back in the workforce or they stay on as a consultant or they're continuing to look for work. But I think the mindset that needs to change here is to recognize this spazed retirement. There's not only a trend, I think it's here to stay. And I think when we are recognizing that we also, with the lower birth rates, we have fewer younger people coming into the workforce. We need to kind of harbor the institutional knowledge and the expertise that an older workforce has. And it doesn't mean it has to be the traditional climbing at the corporate ladder. It may be working differently. It may be working fewer hours. It may be working on specific teams, but those contributions from older workers I think are really important. I'd turn it back to you, David, just to get a sense from your research. How are things changing? How do you think things need to be changing as we be a retirement? - Well, it's funny. I share your concern with the word retirement, right? I don't envision myself retiring, but I am saving a lot of money to be financially independent. I think the problem is just that I think you raised this, is this the word is kind of negative baggage, right? People have talked about golfing and stuff. And I think that that notion of retirement is changing. I think that retirement itself is really complicated. And the global shift away from pension plans is creating a lot of burdens on individual retirees to figure out a lot of things that past generations didn't have to. And so I think that longer life expectancy is great, but it's really hard to know how much you can spend. Can you go on that vacation? You know how long the money has to last. And part of me is the nostalgic wishing week would kind of, you know, find ways to kind of move back towards pension schemes where you don't have to worry about outliving your resources. So I think it's great. We're all living longer, but having to kind of deal with all these risks ourselves I think is very difficult. Yeah. And I think that's what you guys do is really important in thinking about how do we have that lifetime income. We need lots of tools. You know, I don't think there's one solution and that's a challenge and you should look at social security. Is that going to be solvent? Are we going to be able to, are the generations you paid in going to be able to get the benefits for that, and as we move from the defined benefit, how do individuals save and prepare? Yeah. So on that topic, David, you know, as you've researched retirement, preparedness extensively, how do you find that disruption to health, the need for long-term care or care giving needs, change the financial picture? So long-term care is the risk. I don't have a really great answer for in terms of helping people think about what's going to happen in retirement, right? And I think that if you're concerned about like longevity risk, you can delay claim in social security by lifetime income and duty. I really think we need more there in terms of helping individuals that have long-term care needs or other kind of idiosyncratic events, happy later in retirement, deal with those successfully in a way that's not kind of going to lead to financial ruin. You know, a big aspect of your work connects healthy aging with economic outcomes. Why is preventive health essential component of any conversation around the silver economy? I think it's everything, right? If we keep people healthier for longer, right, then people have the potential to be productive for longer. When we're healthier for longer, we can contribute to society longer. We contribute to our family's longer. So our longevity here is a defining variable. And to lessen the impact on our retirement, our goal needs to be this healthy longevity. I was in a conversation recently with the employee benefits research institute that said the majority of people who retire early, they do so for health reasons. Health is a number one reason people retire early and it's health that's also caregiving. And we've been working with the OECD, which of course represents the largest economies around the world, to better understand how to leverage the aging megatron for healthy and productive workforces. It's just a huge piece of that. So in one in four people, age 50 to 64 across OECD countries lives with the health condition that does affect their employment, right? So not being healthy is a huge challenge here. So employers, policymakers, health systems need to be thinking, how do we keep these health costs down? The obvious answer, keep people healthy. So let's change the systems not to focus solely on sick care, but to be proactive and be prevention focused. The OECD has some research that shows if you shift 1% of health care expenditure from treatment to prevention, it can reduce the total health care cost by 3% over a decade. So imagine if we took a little bit more and invested that in prevention, what the benefits could be. And we look at all the benefits of prevention, early detection, early treatment. These things haven't economic benefit and a huge impact on workforces and society overall. So when we think about aging, they often think about where they're going to live, right? Aging in place, moving to retirement community, how do you see housing and community walls evolving in the future as we become an older society? Yeah, housing is a great example of how we need mindsets to shift in what does that look like. Because as we age, nobody wants to be a burden to their families and about 90% of people want to stay in their home, but we know that's not always the reality. And we're working with a lot of interesting groups that are focused on communities that are focused on specific housing innovations. The World Health Organization has a program for age-friendly cities and communities. And last year, our Silver Economy formed a place in greater Manchester in the UK that is really focused on making greater Manchester a great place to live and grow old. We've also worked with service providers who are bringing care into the home, our longtime member home instead, that now became part of honor health is leveraging technology to better connect home care services to the people who need them to connect to a human caregiver that meets the need of the older person who requires care so that they can stay in their home for as long as possible. We also work with an organization called Senior Proof. They are pioneering aging in place support systems. They're combining home safety assessments that are conducted by occupational therapists. They have professional installation and they're checking in with people regularly to ensure there's quality and consistency. So there's a lot of innovation happening in this space everywhere around the world. So when it comes to retirement, we know that people either want to need or work longer, what roles should employers play in a society where this might become more of a thing? We're working longer, right, become a thing? Yes. I think it has to become a thing and I think we're seeing it become a thing, right? What's important for us to think about is we're changing our perceptions around longevity is that we have to stop looking at our lives as like this linear progression. Traditionally, we think about our lives as kind of three blocks of time, where we're educated in the first, third of our lives. We work, make our money in the second, third of our lives and at the last third or whatever's left, it's retirement. I think we need to be more creative about what that looks like. We got to sprinkle in travel here and there. We need to be doing lifelong learning. We need to be learning each step of the way, you know, not just doing it in the first third of our lives, and as we talked about earlier, you know, more and more employees are looking to face retirement as opposed to what we, you know, call the cliff edge retirement and data with some of our partners shows that 3.2% of retirees come back to the workforce within a year of retiring, 20% continue working, many because of financial necessity, many because of the social and emotional benefits, and 7% continue looking for work. So this is kind of a concept of unretirement and employers, policymakers and financial institutions all have a role to play in supporting better retirement outcomes and longer working lives. So I think it's a lot about understanding what are the challenges in the workplace that can also hit us, right? Well, that's a health situation where that's a caregiving situation. We know that as we age, we have a very high possibility of having caregiving responsibilities for our aging loved ones. So the employers who incorporate benefits that support their aging workers, I think will be better off. Awesome. So we had a whole interview focused on longevity tech and AI and all of that. I'm just curious, like, how do you see technology in AI impacting healthy aging? That's a great question. I think AI clearly comes up in all of this, right, as we think about what are the changes happening in our workforce over time, because yeah, we have fewer younger people. We also have AI coming into the picture. So I think we've seen, I think I mentioned an example in caregiving where technology can be smart, right, and help us with the caregiving shortage that we have. We don't have enough caregivers. So on or in whom instead, I've been really great at implementing technology solutions to make caregiving more efficient. It's not going to take away the human component. We need the human component in caregiving, but it can help us. But the number I would start with, and as we're thinking about AI and the longevity space, is this gap between how long we live and how long we live well. So right, how long we are, so healthy as we get older. Globally that gap is about nine and a half years. And so in the US, it's more than 12 years. So that's the widest of any country and the analysis that we reviewed. So we've gotten really good at adding years, not so good at adding health to those years. So AI, it then helps to close that gap. I think will be a really good thing, right? And some of this we've already seen in terms of scans and how AI can help us read scans and predict and help us diagnose in England, an NHS child, AI note taking across more than 17,000 patients as it's gave clinicians back nearly a quarter more of their time with patients instead of with the screen. And the NHS is now scaling it across the country. So I think for those purposes, it's really important. But of course, there's always a challenge, right? The people with the most to gain in this area may be not as equipped to use it. Only 6% of adults over 65, so they feel confident using tools that help in this process. Whether that's prevention detection or whatever it might be. And so there's a lot happening here, but we need to make sure that it can be leveraged in the right way. And I think how we use it is going to be really important. Awesome. So thanks so much for joining. If you could have listeners take away one thing from today's conversation, what would that be? One thing, I would like everyone to take away that we need to be thinking about this topic of, quote, unquote, aging differently. Aging, again, is a great opportunity and aging is about all of us at every generation. So I would love for us to think about how do we change the things that we do today as individuals, but as society. Because we have these longer lives and recognize that, yes, it affects today's older population. It affects us in the middle, sandwiched in the middle, and affects our children as well. So aging is about all of us. Awesome. Well, thank you. And thank you for tuning in. If you're not already, you can follow me on LinkedIn, David Blanchett. You can follow Melissa at Melissa Gong Mitchell. Be sure to like and subscribe to the podcast on Spotify and Apple podcasts. We never miss an episode. I'm David Blanchett. See y'all next time.