Paradigm Shift

Paradigm Shift

I read the other day in the Wall Street Journal that over the next 30 years centennials, people living to 100, are expected to quadruple!  I guess for us living, that is a good stat, as I know I got a lot of good living left to be had.  That said what it tells me is we must start looking at the future differently than the past. 

Two Impacts

I believe there are two huge elements, at least, that are worth addressing with this trend.  The first, and more interesting, is the mental side of things.  If we are starting to live not just longer, but healthier for longer lives we must retrain our thinking.  I remember growing up thinking man, my grandparents are old when they were in their 50s and 60s.  Now I see totally different calibers of 50- and 60-year-olds.  They are more active, healthier, and simply, in a way younger. 

Why I think this is so important is that our health is improving quicker than our ability to comprehend our health improving.  Let me explain.  If you are 60 years old today your frame of reference of a 60-year-old is someone who was literally born in 1904 (being when you were born someone 60 years old had been born 60 years prior i.e. 1904).  Now, what this means on our psyche is that your entire life you were accustomed to preparing to retire by 60 and live a good hopeful ten to fifteen years.  Much like the fall of the Roman Empire, this shift has happened slowly and now all at once.  The shift I’m referring to is now you are 60 and you pick your head up to a completely new paradigm. The reality is that you are more likely to have a very active 20 years and a good possibility to live another 20 more high-quality years.  Heck, my mom picked up golf literally a year ago.

Reframe

I know this is heavy stuff to absorb early on a Tuesday morning, but the facts are the facts.  We have to throw out what we’ve known about what it means to be the age we are today and start reframing our mentality.  This should have massive repercussions across the board.  My guidance here is first to let that all absorb, and then reframe your life expectations and goals. 

This leads me to part two of what this means, which is a financial planning mind shift.  If we know we have to reframe our outdated thinking, then the question naturally is how this impacts your finances which naturally will support your new lease on life.  Well, I think the first thing we should do is be more realistic with our modeling and expectations.  We can’t sit back on old assumptions because they aren’t going to be our future reality. 

This means if once upon a time you thought to retire at 60 and have your assets last for a solid 10-15 years, well news flash might need to rethink that logic.  Instead, I think we must align our financial goals and modeling with our new expectations of our lifestyle.  This likely means working longer for many of us and saving much more to be able to retire.  It also means addressing things like your insurance needs and housing expectations.  Basically, if we start to adjust our modeling and expectations in conjunction with our new more realistic lifestyle, we will start to see a shift in how we plan and what we do. 

Now, the key here is not to panic, heck I just gave most of you a new lease on life, but to start challenging us to think differently.  Not only that, it is imperative to start thinking realistically as well and a good planner is one who helps you recognize these things and helps you plan accordingly to accomplish what you want out of life. 

Sure, the bad news, in theory, is this may mean more aggressive behaviors might have to be deployed to support these exciting goals, but all that means is we have to work more closely together to accomplish these goals. 

I know it is a lot to ponder and there are a lot of ways to skin a cat, but in the end, it will lead to more financially sound lifestyles and us being able to help you truly accomplish all your dreams.

Seems like a good time to suggest as always stay wealthy, healthy, and happy!