October 1 marked the International Day of Older Persons, providing a reminder to reflect on how ageing is evolving and what it means for retirement.
The global population of older adults is growing at an unprecedented pace, with the number of people aged 65 and above projected to double to 1.6 billion by 2050, according to the World Economic Forum.
This demographic shift carries profound implications, not only for society but also for how we approach financial planning, retirement, and long-term care for older generations.
Longevity literacy is key
The retirement age of 65, established in the late 19th century, was introduced when life expectancy was far shorter. Today, thanks to advancements in health care and improved living conditions, people are living longer, healthier lives.
For instance, life expectancy in the UAE increased from 73.2 at the start of the century to 78.3 within two decades, according to the World Health Organisation.
As a result, many are rethinking the idea of retiring at 65, especially when they still have much to contribute professionally and personally.
This shift calls for a new approach to retirement planning: one that goes beyond setting aside savings for a few years of rest. Retirement today often spans decades, making it critical to have a financial strategy that ensures long-term security and quality of life throughout those years.
A crucial element in navigating this reality is longevity literacy – understanding and preparing for the financial implications of living longer.
Factors like family health history, lifestyle choices, and medical advances all play a significant role in determining how long we live, and these should be factored into any retirement plan.
At the same time, inflation and rising costs must be accounted for, making it essential to develop strategies that preserve purchasing power and support a comfortable lifestyle in the years to come.
Long-term care and insurance
One of the biggest challenges in retirement planning is preparing for the unexpected. As we age, unforeseen costs – such as medical expenses and long-term care – can strain even the most carefully planned finances. This is why a strong retirement strategy goes beyond building savings. It requires anticipating the realities of ageing and preparing for potential costs.
As life expectancy increases, so does the likelihood of needing long-term care, whether through home health support, assisted living, or full-time nursing care. These services can be expensive and, if not planned for early, can deplete savings quickly.
Long-term care insurance is one option, but it’s not the only solution. Some prefer to set aside funds for future care, while others may explore government assistance programmes. Addressing these costs well in advance helps avoid financial strain later in life.
It’s equally important to regularly review insurance coverage. As health care needs evolve with age, once adequate policies may no longer cover all expenses. This includes reviewing health insurance, long-term care insurance, and life insurance.
For older people, life insurance can be a vital part of legacy planning, ensuring loved ones are financially protected. However, underwriting for older clients requires specialised expertise, as the risks and needs differ from those of younger people.
Purpose matters as much as finances
Financial security is fundamental to retirement planning, but it’s only part of the equation. Today, retirement offers a chance to embrace new experiences, pursue passions and make the most of this phase of life.
Research by Harvard Medical School shows that retirees who remain active – whether through social activities, intellectual challenges, or continued professional involvement – tend to experience better overall health and greater happiness.
Having a daily exercise routine and maintaining a strong social circle contribute to both physical and emotional well-being.
Retirement must also provide the freedom to focus on activities that may have been sidelined during working years. For some, this could mean starting a new business or exploring creative endeavours. For others, it’s an opportunity to volunteer, mentor younger generations, or support causes close to their heart.
Retirement doesn’t have to mark a hard stop on contributing to the economy and society in meaningful ways. You only get old when you stop learning. Embracing lifelong learning and new challenges can keep the mind sharp and the spirit young.
Ultimately, it is an opportunity to live life on your terms, guided by joy, purpose and connection.
A thoughtful approach to both financial security and emotional fulfilment ensures that this phase is not just comfortable, but also deeply rewarding.
Ashok Sardana is the founder and managing director of The Continental Group, a financial services provider
