Accelerating medical breakthroughs and AI driven tech are increasing lifespans and healthspans, leading us to reimagine the wealthspan required to support them. The standard retirement model is a legacy of an era with shorter lifespans. Most planning is built on prudent modeling for living to age 90. Anchored by the fact that the average U.S. lifespan is 76 for men and 81 for women, these plans will fall apart if investors start to more frequently live to 100 or 110, requiring higher investment returns with greater consistency. 


Convergence of Longevity


We have long heard about the Blue Zones around the world where people live longer, healthier lives: Okinawa, Sardinia, Nicoya, Ikaria, and Loma Linda have provided the blueprint for longevity through lifestyles of plant-rich diets, high activity levels, and strong social ties leading to exceptionally long lives with low rates of chronic disease. 
The concept of healthspan has gained momentum, drawing rigorous attention to the need for lifelong exercise, the quality of what we consume, and the importance of personal connection. At the same time, we are witnessing a remarkable shift in medical technology, much of it driven by AI.  


•    Checkpoint inhibitors ignite the bodies cancer fighting mechanisms
•    Genetic medicine is re-coding how we battle disease
•    GLP-1s are improving metabolic health and weight regulation
•    Wearables provide real-time health data


This blend of blue zone lifestyle principles and technological capability suggests that we are on the cusp of a significant jump in lifespan. 
This conversation is essential because for years, the U.S. has been moving in the wrong direction. Our healthspan has been declining, leaving us 72nd globally behind Malaysia and just ahead of Serbia. On average, Americans spend their final 12 years of life incapacitated or struggling with chronic disease.


It is easy to be fatalistic about this and assume the trend of shorter lives and longer periods of ill health will continue. I believe the intersection of changing attitudes and medical technology will lead to a pivot toward longer heathier lives in the U.S. This necessitates us to rethink our investment philosophy in favor of higher returns and lower volatility, moving away from the classic process of swapping equity for fixed income in the post-retirement years. 
 

Behavioral Finance
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Strategy for Duration


Living to 100 might not feel like ‘now’ problem. Living to 100 is a long way off.  That is my point. Portfolios should be adjusted immediately to ensure the wealthspan can keep up with the lifespan. It is not hard to imagine stocks doubling from here and also, not hard to imagine them being cut in half. For example, let’s not forget, the Nasdaq lost around 80% and took 15 years just to get back to zero after the dot-com bust.


Every revolutionary technology whether it is railroads, electrification, radios, cars, the space race, personal computing or the internet follow the same cycle: Breakthrough → Frenzy → Bust → Ubiquity. Because we are now in the frenzy phase of AI it is important to start adjusting portfolios in an attempt to create a positive impact on future wealthspan.


The longer we live, the more we will be exposed to the sporadic, crushing markets because we will live through more of them. The classic move of increasing an allocation to bonds (where growth may be eaten by inflation) while decreasing the allocation to stocks (which bear the full brunt of market fluctuations) all while taking withdrawals, may lead to ruin in later years when one is least able to go out and make up the shortfall.


To maintain consistent growth over many decades, I believe the move toward lower volatility equity and adaptable fixed income will be essential to ensure our wealth is as resilient as our health.  
 

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About the Author

Eben Burr is the President of Toews where he helps oversee the culture and direction of the firm which specializes in creating strategies designed with the clients financial and emotional wellbeing in mind. Eben has worked in various capacities at Toews since 2009 and before that in real estate in New York City. Eben advocates bringing behavioral psychology, introspection, and empathy into portfolio construction, planning, and communication.  He has a BA in history, studied architecture in Paris, has a master’s degree from Pratt in New York and now lives in Manhattan with his wife, son, and lots of guitars.

This blog is sponsored by Toews Asset Management. Orion Advisor Solutions, Inc. (“Orion”) or its affiliates and subsidiaries received compensation from Toews Asset Management for the placement of this advertisement content. Toews Asset Management and Orion are not affiliated companies, and the advertisement is not a recommendation or endorsement by Orion for any of the services referenced or provided.

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