Report of 100-Year Life

Report 1

Yuhan Zhang

186B130B

The authors of this book ask us a question: how long we can live? The research shows that people will live longer in the future. That means, we will have a linger life than we had before. And also, in a longer life, the three-stage life will not help us anymore, and the multiple-stage life will become standard to the future people.  

The three-stage life means that a person studies and goes to school when he is young, then finds a job, retires when his age until about 60, and then lives in retirement. After retiring for 20 years, he died around 80 years old. But if a person has a high probability of living more than 100 years, then there will be many problems in this three-stage life. For example, the savings of working for more than 30 years may not be enough for the retirement. And for most people, 40 years of retirement life with nothing to do will definitely leads to cognitive deterioration and reduces life satisfaction. In order to avoid these problems, people will start living with multiple-stage life style. The multiple-stage life means that we graduate from college in our 20s and then find a job. Working in the 30s and in the 40s may feel that we would like to do other vocation, or our existing industries may disappear. we need to change careers and learn other industry knowledge. Many people will return to the university to learn new things and learn with the younger generation. This kind of re-entry to school in people’s 30s and 40s may become common in the future.

The main problem that the authors used to show us the change of our life style in the chapter 2 is the pensions. In this chapter, we can see three people’s life represent three generations. The three people named Jack, Jimmy and Jane and they born in 1945, 1971 and 1998. The authors suppose their target pension amount is to get 50 per cent of their final salary every year. In Jack’s life, the three-stage life is perfect fit on him. He graduated from university as he was 20 years old and then became a manager. He retired when he was 62 and died in 70. In his life, he works for 42 years and the retirement is 8 years, and his pension comes from three distinct sources: the state pension, the company pension, and his own private saving. His company will provide him a pension worth 20% of his final salary, and the pension from social security is worth 10%. So, he has to pay the rest of the pension by himself-about 20% of his final salary. This means he has to save 4.3% of his salary every to cover the rest pension.

But for Jimmy, the problem is as the people are living longer but the birth rate become lower and lower, the state pension program “Pay As You Go” becomes “Ponzi” or “Madoff” schemes. The state pension will not continue for longer. And at the same time, the company will also close their pension plan based on the same problem. The companies may not pay their workers pension anymore. Jimmy’s life expectancy is 85, he graduated from university in 1992 as he was 21 years old and planned to work until he is 36. Suppose he can still get 10% state pension but cannot get any company pension, Jimmy have to save 17.2% of his salary every to pay the rest of his pension as his retirement life is 20 years. And for Jane, Jane expected herself live up to 100 years old. If she also plans to retire at 65, she has to save 25% of her salary every year to get 50 per cent of her final salary as her pension and her retirement will be 35 years. And if she wants to keep her saving rate less than 10%, the only way she can do is she must to work more than 80 years old.

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