Statistics clearly show that Canadians are living longer. While a long life can be a good thing, longevity also brings with it some unique financial challenges on both a micro and macro level.
A recent study on longevity by the Office of the Chief Actuary of Canada predicts the country will continue to have one of the highest life expectancies of the world along with Japan, France, Switzerland, Italy and Australia.
Life expectancies at birth of Canadians are projected to increase from 86 to 90 for men and from 89 to 93 for women over the period of 2013 to 2075. Increasing longevity is creating major social concerns on a couple of levels.
A study on the financial impact of longevity by the International Monetary Fund says a growing aging population creates financial risks for governments and private pension providers as well as individuals themselves:
“Unexpected longevity, while clearly beneficial for individuals and society as a whole, is a financial risk for governments and defined-pension providers who will have to pay out more in social benefits and pensions than expected,” the report says. “It may also be a financial risk to individuals who could run out of retirement resources themselves. These risks build slowly over time but if not addressed soon could have large negative effects on already weakened private and public sector balance sheets, making them more vulnerable to other shocks and potentially offsetting financial stability.”
As life spans increase, people need to account for the financial and health issues that come with the possibility of living a longer life.
“Unexpected longevity, while clearly beneficial for individuals and society as a whole, is a financial risk for governments and defined-pension providers who will have to pay out more in social benefits and pensions than expected,” the report says. “It may also be a financial risk to individuals who could run out of retirement resources themselves. These risks build slowly over time but if not addressed soon could have large negative effects on already weakened private and public sector balance sheets, making them more vulnerable to other shocks and potentially offsetting financial stability.”
As life spans increase, people need to account for the financial and health issues that come with the possibility of living a longer life.
– See more at: http://www.nanaimodailynews.com/business/the-pros-and-cons-of-longevity-1.1425049#sthash.TQz2Kg0G.E0sx6mNr.dpuf
“Unexpected longevity, while clearly beneficial for individuals and society as a whole, is a financial risk for governments and defined-pension providers who will have to pay out more in social benefits and pensions than expected,” the report says. “It may also be a financial risk to individuals who could run out of retirement resources themselves. These risks build slowly over time but if not addressed soon could have large negative effects on already weakened private and public sector balance sheets, making them more vulnerable to other shocks and potentially offsetting financial stability.”
As life spans increase, people need to account for the financial and health issues that come with the possibility of living a longer life.
– See more at: http://www.nanaimodailynews.com/business/the-pros-and-cons-of-longevity-1.1425049#sthash.TQz2Kg0G.E0sx6mNr.dpuf
This article was published by The Nanaimo Daily News on October 14th, 2014. To read the rest of the article on their website, please click here
