Solving the looming retirement crisis means thinking differently about aging, economist says

• It's time to start thinking differently about aging, according to a new book.
• Andrew J. Scott coined the term "evergreen economy" to describe how older people's quality of life can be improved.

Life expectancy soared in the first two decades of this century, World Health Organization data shows — and that's posing challenges for some rich countries.

People tend to underestimate their chances of living to 75, according to a report by the Institute for Fiscal Studies, meaning they often don't save enough cash for retirement.

That's putting strain on the pensions system, fueling labor-market shortages, and forcing health workers and scientists to reckon with the massive rise in cases of age-related diseases such Alzheimer's and dementia.

Andrew J. Scott, a professor of economics at the London Business School, believes the steps governments, companies, and individuals take to address an aging population will be one of the defining issues of the 21st century.

"Clearly, climate change is a huge issue, AI is now an obsession about how we can adapt and change our future, but we never talk about adapting to aging," he told Business Insider in a recent interview.

"We've never invested enough in old age, because we thought we'd never get there, and now we will."

'Evergreen economy'

Scott, whose 30-year career as an economist has taken him from Oxford to Harvard to a stint as an advisor to the Bank of England, lays out his mission statement for rethinking aging in a new book called "The Longevity Imperative."

He calls for a transition to an "evergreen economy," based on channeling the world's aging population to address inequality and boost growth.

Governments can help by investing in preventive health initiatives such as trials of anti-dementia drugs, he told BI, while companies that allow flexible working patterns and stamp out ageism can also help keep older people employed and productive.

But individuals also have a role to play, according to Scott, who points to the surge in popularity of weight loss drugs such as Ozempic, Gen Z drinking and smoking less, and the rise of trends like the retire wealthy movement as signs that people are starting to realize they'll live longer and need to take better care of both their health and finances.

"How we look after our health, our finances, our skills, and our relationships has become crucial because the data suggests we're now likely to become very old, and that's never been the case before," he said.

"You can't age better if you wait until you're old to make changes," Scott added. "This is about not underestimating the capacity of our later years, or older people, to make sure we stay evergreen."

Aging anxieties

"The Longevity Imperative" arrives at a time when increased life expectancy is starting to affect some of the world's largest economies for the first time.

Italy's population is rapidly aging, with over-65s already making up 37% of the workforce, according to data from the Institute for International Political Studies. That figure is expected to swell to a staggering 65% by 2050, per the think tank.

Meanwhile, nearly 30% of people in Japan are over-65s — enough to make it the world's oldest population, according to the World Economic Forum. That could leave Japan battling chronic labor shortages in the future, economists warn.

The US population is still growing and relatively young, largely due to high immigration levels. But many older Americans face a bleak future, with about half the nation's over-65s earning less than $30,000 a year, per the Census Bureau's population survey.

The looming retirement crisis underlines the need for a rethink on aging, Scott told BI.

"Policies like raising the Social Security age are missing the point," he said. "People don't leave the labor market because they've got enough money to retire comfortably — it's often because they get ill, have to care for someone, or lose their job because their skills are seen as outdated.

"So we have to start thinking about how we can ensure people's health is sustainable as they age, while maintaining their skills and encouraging firms to offer more age-friendly jobs," Scott added.

Unrealistic or imperative?

Some may regard the idea of an "evergreen economy" as unrealistic — or even dystopian.

Longevity isn't a political priority right now for the US government, according to a Washington Post survey of public health experts, lawmakers, and senior health officials published late last year.

Meanwhile, the World Economic Forum has warned that anti-aging innovations might only worsen inequality in advanced economies. It cited a 2005 research paper that found the booming market for products such as age-defying moisturizers could give "a glimpse of the financial, social and ethical problems to come."

However, it's difficult to resist Scott's own idealism and enthusiasm.

In a half-hour conversation with BI, he quoted David Bowie ("Aging is an extraordinary process whereby you become the person you always should have been"), laid out why longevity encompasses everything from "GDP to what I should have for breakfast," and shared how the death of his parents first inspired him to explore the topic.

As for how thinking about longevity has changed his own approach to aging, the 58-year-old economist says he's not advocating ultra-strict diets or taking loads of pills.

"This isn't about doing a Bryan Johnson by starving yourself for 16 hours a day and taking lots of supplements," Scott told BI, referring to the multimillionaire biotech CEO who's reportedly spending up to $2 million a year to try to lower his body's biological age.

"I do exercise a great deal, I try to take better care of my finances, and I've tried to change my sleep," he added. "But more than anything else, I'm just trying to keep up with my friends and family a bit more."