Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 66

Making judgments based on age

Complexity is one of the challenges of our information society, and we typically respond by making simplifying assumptions. This helps us manage the complexity but increases the risk of focusing on the wrong things. Worse, our prejudices easily lead us to simple answers which are consistent with our views but are often biased and misleading.

The complexity of longevity

Increasing longevity is one of the most challenging and complex issues we face – as a community and as individuals. It’s easy to fall into the trap of making sweeping statements. Prejudice, often fuelled by personal fear of our own mortality or that of our parents, can lead to big errors of judgment.

Why, for example, is there a disproportionate number of professional ice hockey players in Canada born in the first months of the calendar year? Readers of Malcolm Gladwell’s Outliers know that the selection of young players for higher-level ice hockey coaching starts in year seven or eight. Children born early in a calendar year are more mature than their age peers born late in the same year. So they tend to be chosen for further coaching. Same ‘age’ but different capabilities.

We become increasingly individual and different as we mature. Our community largely avoids using age as a basis for judgment until around age 60 when quite suddenly ‘age’ again becomes an issue. It’s used as a decision point if we want to ‘retire’ or access our super or get a free transport pass. In its report ‘Access All Ages – Older Workers and Commonwealth Laws’ (March 2013) the Australian Law Reform Commission identified a plethora of areas in which age has become more obviously a basis for discrimination than it might have been at the time the original legislation appeared.

‘The end of the Age of Entitlement’ has now entered our vocabulary as a justification for a series of age-based changes to government support (along with many other changes).

Has the notion of a numerical age outlived its usefulness? We are already evolving more sophisticated ways of evaluating ourselves. Could we be heading for a new ‘Age of Enlightenment’ where we create more contemporary models to help us know and manage ourselves better with increasing longevity? If so, this should lead to more effective allocation of expensive resources. Benefits would accrue to both individuals and governments.

Personal capital or value

At My Longevity, we developed a simple model which a person can use to help with their ‘retirement’ decisions. It shows how our personal value (capital) can be seen as a simple combination of our capability and experience. These accrue and eventually decline at different rates over our working life. The model invites people to consider the impact of retiring on their personal value. Each of us is different so the individual model varies accordingly. It can help shift the retirement focus to one of personal value rather than just financial value, and introduces the notion of a personal time frame to underpin decisions. It also fosters the important notion of mastery over personal circumstances which in turn supports the quest for independence.


Source: My Longevity Pty Ltd

This illustration shows how personal capital can accrue over time with a potential bonus from deferral of retirement. Personal circumstances can vary a lot from this model. Although our capability might decline in later years, it can be compensated for by our experience.

There are many other ways of showing people the diversity of options that can open up with greater longevity awareness.

Older people are increasingly seeking information and services which help them manage their lives better. Many of them want to continue to contribute to society and do so.

When governments discriminate in delivering services using outdated metrics like age, they risk giving the message that they are behind the times and out of touch with reality. They attract criticism and waste opportunities to encourage informed independence.

Success in managing longevity requires an effective partnership between individuals and governments. Maximising personal capability requires an environment that is supportive and nurturing.

As Malcolm Gladwell suggests: “It’s true in sports and it’s true in the rest of our lives as well. We need to wake up to the fact that as a society we haven’t been doing our part.”

 

David Williams began longevity research in 1986 and was a Director with RetireInvest and CEO of Bridges. He chaired the Standards Australia Committee on Personal Financial Planning. David founded My Longevity Pty Limited in 2008.

 

RELATED ARTICLES

Let's ditch the idea of retirement

Rethinking super tax concessions for the future

Australia isn't ageing as quickly as the Government says

banner

Most viewed in recent weeks

2024/25 super thresholds – key changes and implications

The ATO has released all the superannuation rates and thresholds that will apply from 1 July 2024. Here's what’s changing and what’s not, and some key considerations and opportunities in the lead up to 30 June and beyond.

Five months on from cancer diagnosis

Life has radically shifted with my brain cancer, and I don’t know if it will ever be the same again. After decades of writing and a dozen years with Firstlinks, I still want to contribute, but exactly how and when I do that is unclear.

Uncomfortable truths: The real cost of living in retirement

How useful are the retirement savings and spending targets put out by various groups such as ASFA? Not very, and it's reducing the ability of ordinary retirees to fully understand their retirement income options.

Is Australia ready for its population growth over the next decade?

Australia will have 3.7 million more people in a decade's time, though the growth won't be evenly distributed. Over 85s will see the fastest growth, while the number of younger people will barely rise. 

Welcome to Firstlinks Edition 552 with weekend update

Being rich is having a high-paying job and accumulating fancy houses and cars, while being wealthy is owning assets that provide passive income, as well as freedom and flexibility. Knowing the difference can reframe your life.

  • 21 March 2024

Why LICs may be close to bottoming

Investor disgust, consolidation, de-listings, price discounts, activist investors entering - it’s what typically happens at business cycle troughs, and it’s happening to LICs now. That may present a potential opportunity.

Latest Updates

Shares

Exploiting Warren Buffett

Growth investors are using Buffett to justify buying blue chip stocks at almost any price. It’s a recipe for potential disaster, as investors in market darlings like CBA and Cochlear may be about to find out.

Property

Population density trends and what they mean for housing

With Australia’s population moving through the fastest rate of growth since the 1950’s, our cities and towns are naturally densifying. This is a look at the latest trends and how they will impact the property market.

SMSF strategies

The ultimate superannuation EOFY checklist 2024

We're nearing the end of the financial year and it's time for SMSFs and other super funds to make the most of the strategies available to them. Here's a 24-point checklist of the most important issues to address.

Shares

The outlook for Nvidia, from a long-time investor

Nvidia has taken the world by storm and is now the third largest stock on the planet - larger than Meta, Amazon, and Alphabet. Here is the latest take on Nvidia from a fund manager who first invested in the company in 2016.

Economy

Gross National Happiness?

Despite being richer, surveyed measures of happiness have been flat to falling in Australia. Some suggest we should focus less on GDP and more on broader measures of wellbeing, and here are the pros and cons of that approach.

Shares

The power of dividends

In an era where growth companies dominate and the likes of Nvidia grab all of the attention, dividend paying stocks are flying under the radar. Some of these stocks offer compelling prospective returns.

Fixed interest

The best opportunities in fixed income right now

After more than a decade of pitiful yields, bonds are back offering better prospects for income investors. What are the best ways to take advantage of the market inefficiencies in Australian fixed income?

Sponsors

Alliances

© 2024 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.