As Australians continue to live longer, it’s time to question the traditional concept of retirement and and what this will mean for the delivery of financial planning advice.

I recently went to a party organised by one of my old school friends, and I was chatting with his father, Mike, now 80.

Mike had retired many years ago, but was by no means inactive. In fact, he told me he had found a new hobby: options trading. He spent a few minutes every morning checking his portfolio, writing an occasional covered call, and making enough pocket money each month from his trading to pay for his golf membership and other social activities.

Mike is not a typical 80-year-old retiree, but he’s by no means unique. Better healthcare means he is alive and healthy, and technology gives him the choice to continue earning an income, even after ‘retirement’.

No longer does retirement have to mean sitting back, doing nothing, and living off your superannuation. In fact, that was never the original intention.

In 1881, when Otto von Bismarck, the conservative Minister President of Prussia, proposed state-sponsored retirement for older members of society, he pegged the retirement age at 70 because that was the average life expectancy. In other words, if you were alive, you were expected to work; and if you passed that age, the state would look after you until you died.

Over time, life expectancy has increased, but the retirement age hasn’t – in fact, it’s gone the other way. For many people, retirement has become a goal, and many financial advisers still create plans for clients based around a magical retirement date.

This might have served people well in the past (and even that’s debatable – is it really healthy to have a workforce that makes so many sacrifices today in order to have a happy retirement decades in the future?), but it’s rapidly becoming an obsolete method of financial planning (or life planning, for that matter).

Life extension science changes everything

In 2015, then-Treasurer Joe Hockey was ridiculed for suggesting that some children alive right now could live to 150. But experts in anti-ageing – or ‘life extension science’, as it’s known – support his claim. It’s a fascinating area of science, and one that has obvious implications for all areas of society.

Life extension science doesn’t claim to reverse the ageing process (for that, you need the cosmetics industry!), but to slow it down. That means you live longer, but age better; and the younger you are, the better the results.

The most optimistic experts in this area even suggest that eventually the science will become so good that people could live forever. Their logic is that the science is improving so rapidly that it will outpace the ageing process itself. It’s too late for me in my 50-year-old body to live forever, but possibly not for my seven-year-old niece. But even if she doesn’t live forever, I have no doubt she will live to 100 – and be at least as healthy and active as her 50-year-old uncle today.

It might sound far-fetched to imagine that 100 years from now, it will be normal to live a healthy, active life at the age of 150. But it would have been equally far-fetched for Australians 100 years ago – when the average life expectancy of a baby was about 50 – to imagine that so many people now live to 100.

What does this mean for financial advisers?

What does this extended life span mean for society – and for this profession, which should be giving people the financial foundations for a flourishing life?

First, of course, it makes a mockery of the idea of ‘retiring’ at 50, 55 or even 65. If 70 is the new 40, it doesn’t make sense to create a financial plan that assumes you’ll stop earning an income at 55.

But it doesn’t make sense to push that age out in planning, either. The further the end date, the less the perceived impact. If you’ve faced the challenge of trying to convince Millennials in their twenties to start planning for ‘middle age’ in their forties, imagine trying to convince a 20-year-old that she needs to start planning for retirement at 85!

That doesn’t mean that 20-year-old will reject financial advice. Far from it. She wants advice, but only if it also gives her a solid financial foundation for living a well-rounded life now. She will expect her financial adviser to help her maximise the value of her income today, not just when she retires.

Superannuation and other post-retirement vehicles available today will play a different role in a financial plan. If the Government doesn’t extend the preservation age (or doesn’t extend it much), super will have to last longer – much longer. And if it does extend the preservation age, super becomes a much smaller part of a financial plan.

Extended life spans won’t just stretch out our lives; they will also change lifestyles in fundamental ways. For example, will couples still marry ‘for life’? Even with the high divorce rate, most couples enter marriage with the intention of being together for the rest of their lives. But is it realistic to expect two young people to be perfectly suited for each other for the next 80 years?

What if it became normal for couples to divorce every 15-20 years and choose new life partners? This might sound extreme, but it might be a natural outcome of extended life spans. And, of course, this has profound implications for financial plans.

Are you thinking ahead?

For the average financial adviser – trying to do the best for their clients but struggling under the strains of compliance, new regulations, and a fast-changing world – some of these ideas might seem far beyond contemplation, let alone action. But it won’t be the average financial adviser who will still be in the industry in the next 10 years. If you want to survive – and thrive – think ahead!

After all, you’re creating financial plans that are supposed to be relevant decades into the future. Don’t you owe it to your clients – and yourself – to understand more about that future?