Here's a frightening thought: a nice tidy household with great grandparents, grandparents, mom and dad and you -- and, you are 30 years old. A bad dream? Reality? A possibility?
My family has four generations alive and mostly well. While the youngest has a long way to go before reaching 30, it is not beyond healthy imagination to think of four generations being active, healthy and financially interdependent. Thinking of the financial and lifestyle combinations is both challenging and time for a deep breath. There could be challenging health and financial issues at any time. It makes the age old "Who's on First" routine seem simple -- and nowhere near as funny.
How do you prepare for this? Right now, the four-generation home is an outlier. That said, as time passes and people focus more on health and active participation in life, longevity is becoming a promise, a threat and... a reality.
From so-called longevity annuities that kick in at age 85 to more and more programs that make once life-threatening chronic illnesses livable conditions, the likelihood of many more folks celebrating their 100th birthday and looking forward to many more years of an active lifestyle is almost certain. The number of post-centennial boomers is going to explode. It may be a few decades off, but it is worth exploring the possibilities now.
The impact of longevity will be felt in our culture and in our wallets and purses. The extended lives are going to challenge the viability of public and private support systems. On the public side, the system will go upside down and there will be more people participating in Social Security, Medicare, government pensions, housing, etc., than those contributing through taxes.
Think about the fact that life expectancy has been steadily climbing, but the retirement age has not been climbing with it. People still tend to retire around 65, and many people aspire to -- and do -- retire earlier.
The private sector will face similar issues. Industry-sponsored defined benefit pensions -- the dwindling number that remain -- will head for bankruptcy and potential government rescue as funded life expectancies in the 70s and 80s set aside by employers become depleted, as retirees surpass those ages by a wide margin. Employers and the insurance companies that jointly provided annuities will have a hard time keeping up. Similarly, 401(k)s, profit sharing and other defined contribution plans will have used up precious capital.
The result? Family units may have to band together to combine resources in order for the older generations to maintain some semblance of a quality lifestyle. Of course, dramatically rising real estate costs in certain markets also make it harder for the 30-year-olds to afford a home of their own.
The change in lifestyle landscape will be dramatic due to financial necessity. What will housing look like? Small multiple living units with central living rooms, kitchens, etc.? Will there be a true focus on quality health care based on making folks healthier rather than waiting for them to become ill? Proximity to a physician may become less important as basic care and prevention become more dominant, and care is increasingly delivered in the right place at the right time, by the right level of practitioner.
Sometimes speculation is fun. Sometimes it is not. The unknown can be exciting and daunting. Here it may be a bit of both, but certainly it is worthy of some thought and even some preparation. Time will tell. Which of the four generations will be yours?
Barry Koslow, JD, is president and CEO of MKA Executive Planners, a Massachusetts-based executive benefit and retirement planning firm. He can be reached at bkoslow@mkaplanners.com.
