Maximising your greatest asset
Each culture has its own saying or toast to the three deeply-rooted desires for health, wealth and happiness. Expanding human longevity is extending the opportunities to enjoy all three: by 2050, global life expectancy at birth is estimated to reach 100 in advanced economies thanks to advances in healthcare and lifestyle changes. (1)
Longevity is a prized asset. Like financial assets, appreciation best takes root in careful planning – making longevity financial planning increasingly important - and through the compounding effects of starting young, sourcing expert advice and sustaining best practice over decades. Many wealthy individuals and their families understand this. Longevity clinics are on the rise as people invest in personal health through supplements and wearables, diagnostics and regenerative medicine. (2)
The longevity economy is also expanding fast, offering investors ways to benefit from the structural changes that ageing global populations entail. (3) By 2050, further advances in human health, allied to improving labour force participation, could result in a USD12.5 trillion global GDP uplift, around 7 per cent of current global GDP.(4)
The knock-on effects of expanding health spans on lifespans have profound implications for wealth spans too. High-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals are increasingly factoring longevity into financial and succession planning - a core part of longevity wealth management - as shifting timelines may delay inheritance or business transfer.
Longevity is a megatrend that affects everyone. In this special series, we explore how to make it an asset that works for you – aligning wealth and longevity over the long term.
Financial planning considerations for a longer life
1. Consider time your most valuable asset
Living longer does not create additional leeway to delay planning. The earlier you start the better. Planning is most effective when built on strong foundations that reflect your short- medium- and long-term aims.
2. Make flexibility and adaptability your guiding principles
Lives rarely follow a linear path and the larger the family, the greater the complexities. Each additional decade of life increases the likelihood of knowing a new generation of family members and of wanting to provide for them. Wealth planning and its associated documentation, consequently, need to be as dynamic as the people they support.
3. Create cross-generational communication channels
Longer lives can mean more family members, and more complex family structures, including second or third spouses, and step children. Open, ongoing dialogue helps to maintain family unity and prevent future conflicts by enabling everyone to state their positions, resolve issues and explore opportunities.
4. Empower the next generation
One of the best ways to ensure smooth wealth transitions is by gradually involving succeeding generations in planning and execution. Open dialogue is the starting point for sharing aims, transferring knowledge and giving heirs increasing responsibilities.
5. Don’t just make it about financial returns
Longevity often prompts greater reflection about what success means and taking a more holistic approach to wealth planning that embraces health span, wellbeing and sustainability. This includes investments in companies that improve quality of life or sustain the planet’s existence.
Related insights
Wealth planning in the age of 100-year lives
Living longer is re-defining wealth planning towards strategies that support the needs of multiple, overlapping generations across extended time horizons.
Aligning portfolios with lifespans
As the prospect of 100-year lives looms into view, so does the need to re-configure investment strategies for long-term growth stretching across multiple generations.
Sources:
1.Stanford Center on Longevity (2023) Today’s 5-year-olds will likely live to 100. What will their lives be like? Stanford University. Available at: https://longevity.stanford.edu/wp- content/uploads/2023/03/Todays-5-year-olds-will-likely-live-to-100.-What-will-their-lives-be-like.pdf
2.CB Insights (n.d.) The longevity tech market map. Available at: https://www.cbinsights.com/research/the-longevity-tech-market-map/
3.Aranca (n.d.) Longevity economy. Available at: https://www.aranca.com/assets/docs/Longevity-Economy.pdf
4.McKinsey Health Institute (n.d.) The health of nations: Stronger health, stronger economies. Available at: https://www.mckinsey.com/mhi/our-insights/the-health-of-nations-stronger-health-stronger-economies