Building Trust Through Longevity: Serving People As They Age

(upbeat music) (audience applauding) – Good afternoon, everyone. I want to first take this opportunity to thank Jennifer for inviting me here to share with you some of
my thoughts and comments about the financial services industry and how they can help us
allow people to choose how they live as they age. We all know that the
world’s population is aging, but the scale of that
shift is unprecedented. 2/3 of the people who have
ever lived to the age 65 are still alive today. Next year, the number
of people 65 and older will outnumber those
who are five and under for the first time in our history. And it’s not just more older people, it’s healthier people living longer lives. And this has an enormous implication for the financial industry and the people that all of you serve we’re in the midst of an aging revolution. More people around the globe
are living longer and healthier with more productive lives
than in any time in history. And unlike other macro shifts
that are reshaping our world, like climate change for example, there are no people who
are debating whether this shift is going to occur in aging. It’s happening with us all the time. There are no aging
deniers or even skeptics. But the scale of that shift
is not yet broadly understood. Consider these facts. Here in the US, 10,000 people a day are turning age 65, and that’s a number that’s
going to continue every day for the next 11 years. The 65-plus segment of the US population is around 9% in 1960, but it will grow to almost
24% of the population by the year 2060. The fastest growing age
group in this country, people over the age of 85. The second, people over the age of 100. The World Health Organization reported life expectancy worldwide has increased by five years
in the last two decades, the fastest since the 1960. And by age 2050, those people who are over the age of 60 will represent 22% of
the world’s population. Think of it this way. Picture a 10-year-old child that you know, perhaps it’s your own son or daughter, or granddaughter, niece, or nephew, that 10-year-old has a 50%
chance of living to be 104, assuming they have good health and hopefully good finances. As I look ahead to the year 2030, I see this as a watershed
year for the country and indeed the world. By 2030, the first Millennials are going to start turning 50. The first Gen Xers will turn 65. And by the end of 2030, the first Boomers will start turning 85, expanding the ranks of what is already the fastest-growing age
group in this country. In 2030, just a little over 10 years from now, we’re going to be looking at a whole world that is changing right before our eyes. 10 years ahead is going to bring about dramatic changes in the way we work, in the way we do, in the
way we live our lives. So think about this, 10 years ago, we thought of Amazon as
that online bookstore that also sold movies and software, some video games, and electronics. Today, it is the largest eCommerce and distribution company in the world, and the second largest employer in the US, right behind Walmart. 10 years ago, YouTube
was only four years old, and almost no one used it. More video today is
uploaded today in one month than the three major TV networks created in the last 60 years. The iPhone was only about
two years old, 10 years ago. Since then, Apple has
sold 1.2 billion iPhones. And six of the 10 most
in-demand jobs in the US didn’t exist 10 years ago. Some experts predict that almost 2/3 of children who are currently
in elementary school will work in jobs that haven’t
even been invented yet. So our world is changing fast, and the technology is
advancing very rapidly. We have to assume that
in the next 10 years, that other new companies will come up to compete with the Amazons, the Facebooks, the Googles,
and the other technologies, and that those companies themselves won’t create new products and services I the marketplace that will capture the hearts, and minds, and
behaviors of consumers. But the question for us today is what can we do, not only
to help people afford to live their longer lives, but to help them thrive
as they age, even at 104. How can we create innovative solution that help people live better lives throughout their lifetime? And the first step is
to create what I call a new mindset around aging, a new way of thinking about people as they continue to age. There are three areas where I think this is really important. It’s what I call health, wealth, and self. We have to embrace a new vision of health that emphasizes well-being. We have to build wealth from an early age, so that we can accomplish
our life goals and purpose, and we have to have personal
fulfillment in our own lives. Health, wealth, and
self are all connected. The cost of managing and
maintaining our health today is very, very expensive, and it’s hard to live a
vibrant and fulfilling life if you are in poor financial health. That’s why we’re working so hard to lower the cost to prescription drugs. Because as I told the
pharmaceutical industry, we love the drugs you’re creating. We just need to be able to afford them, so that we can live that
longer and healthier life living up a fulfilling
life is about driving, and it’s about being able to afford to live the way we want to live and being healthy as we enjoy it, and wealth is the greatest enabler that allows us to pursue that healthy, wealthy life as we continue to grow older. And we know that people
in poor financial health, that this also leads to
poor health generally and also leads to isolation. So we’re creating a whole
new mindset around aging. At AARP, we call it disrupt aging. And disrupt aging is about
challenging the conversation in this country about what
it means to grow older. The way people are aging is changing=, but many of the attitudes, and the stereotypes about aging have not. We need to challenge
those outdated beliefs and stereotypes and spark new solutions so more of us can choose the
way we want to live as we age. Let me show you what I mean. Far too many people still
think of aging like this. – [Narrator] The new Amazon Echo has everyone asking Alexa for help. – Alexa, what time is it? What the hell is wrong
with this blasted thing? Amanda – [Narrator] But the latest technology isn’t always easy to use
for people of a certain age. – These kids have bought
me a busted machine again. Odessa! – [Narrator] That’s why
Amazon partnered with AARP to present the new Amazon Echo Silver, the only smart speaker device designed specifically to be used by the greatest generation. (audience laughs) – That’s okay, we laughed too. But if we continue to see older people through this lens, then we’re going to miss this massive shift in the reality of aging that
is happening on our watch. I believe that the
financial services industry can provide the innovative
tools, the resources that people need in order to
live and thrive as they age. But in order to do that,
we must see possibilities where other see problems. So here’s a reality. The way people are aging is changing. People are living differently today than they did with our
parents and our grandparents, and it’s about more than just the numbers. The traditional view of life was that we peak interest
he middle of our lives, retire, and go into decline. But what we’re seeing at
AARP is that isn’t happening as frequently as it has in the past. People in their 50s are
experiencing more life transitions than in any other decade, and people are going back to school, they’re dating, they’re switching careers, they’re switching spouses, they’re engaging and– (audience laughs) It’s true. I just want to see if you
were following along. And they’re engaging in encore careers to fulfill their life purpose. Overall, because of
this increased longevity and better health, we have opportunities for
continued productivity and growth that generations before us never had. We’re seeing major changes in how people use their
increased life space. Instead of seeing just dependent retirees, we’re beginning to see a
new type of experienced and accomplished workforce. Studies show that around
75% of Boomers in the US plan to work full or part-time passed the traditional age of 65, either because they want
to or because they have to. Instead of seeing expensive cost, we’re seeing exploding
consumer market generating $7.6 trillion of annual activity here in the US by people
over the age of 50. And if this were a country, it’d be the third largest country behind the US and China. For every dollar spent in the US, 51 cents is spent by
someone over the age of 50. And globally, the spending
power of consumers over the age of 60 will hit $15 trillion by the end of the decade, up from eight trillion in 2010. Instead of seeing a
growing pool of dependents, we’re beginning to see
intergenerational communities with new and different strengths, and we’re beginning to recognize
that, more often than not, what is good for the old
is also good for the young. And while the way people
are aging is changing, many of the products and services that support us as we age were designed for a
20th century lifestyle, and they don’t adequately support the way we’re living today, nor do they reflect the
changes in technology that allow us to live better
as we continue to grow older. We need to design new
products and ne services that empower people to choose how they want to live as they age, especially as it relates to
health, to wealth, and to self. So let me talk just a little bit about, specifically about how that relates to the consumer financial services industry. One of the things that people
fear most about living longer is that they’re going to
outlive their money. And unfortunately, for
many, this is a real fear. According to CFSI, only 28% of Americans
are financially healthy, while over half are just coping. Over half of all households
nearing retirement have absolutely no retirement savings. And we know that for Millennials, saving for retirement is a non-starter. Many can’t see that far ahead or they don’t think that
they’re ever going to retire. Moreover, nearly half of US households say they couldn’t cover three months or more of living expenses without borrowing money or withdrawing from their retirement plan. And just over 10% have less than one week of living expenses already saved. And you heard the gentleman before me talk about the importance of having those emergency funds. And the news I think
is even worse for those who are low and moderate incomes. CFSI earlier this year found that eight in 10 low and moderate income adults who are over the age of 50 struggle with at least one
aspect of their financial lives, and only 17% consider
themselves financially healthy. They face financial challenges that were less likely
in previous generations. More than half struggle
with insufficient short-term emergency savings, like
we discussed earlier. Nearly four in 10 have
debt that they can’t manage and are forced to go into
their retirement savings. Many don’t have enough
money to protect themselves from medical shocks or health emergencies that occur in so many families
all across this country, and many of those who
struggle to make ends meet and others who can’t afford
to completely retire. And so we see so many
people continuing to work past traditional retirement age. And lastly, family
obligations keep some of them from developing more financial security while they’re trying to
help another love one or family member. And then there’s social security. Social security provides
most of the retirement income for almost half to he
households headed by someone over the age of 65 in this country. The 2019 Social Security Trust Fund which just came out last month said that social security
fund would be depleted by the year 2035. And if that happens, social security would only be able to pay
about 80% of the benefits retired and disabled
workers are entitled to we need to make sure that
our elected officials are finding us solutions for social security’s long-term solvency, and we need to make sure that
that happens on our watch. (audience applauding) That’s coming from someone nearing 65. (audience laughs) The time has come to change the conversation
about preparing financially for our latter years. What if instead of
saving for a retirement, we thought about it as saving to enhance our financial
resilience over our lives. When we approach it in this way, we begin to think about
a holistic approach when it comes to financing our future. What if instead of saving for retirement, we think of saving for life. This new vision of financing our future expands our outlook for retirement to enhancing our financial resilience throughout the course of lifetimes. And our focus turns from
to tracking our money to building emergency funds, to coping with financial pressures, to protecting our assets
and to managing our money. That’s a lot more than
just saving for retirement. And I think it puts it in perspective so that people were thinking about not something that’s going to
happen well into the future, but something that is going to happen throughout the course of our lifetime. The challenge for the
financial services industry is to design innovative ways
to help people save for life, to support people in the
way they want to live throughout their lifetime. And of course, what drives all of this is what I like to talk
about is innovation. At AARP, we recognize
the need for innovation that enables people to live healthier, more financially secure, and much more fulfilling lives, and we’ve created our own
internal innovation center, what we call the Hatchery. It’s a reminder that our
founder, Dr. Ethel Percy Andrus, started AARP when she
was a retired principal in the state of California, and she visit a friend who
she heard was in poor health. And she went to knock on the door, and the person who answered the door said she lives in the chicken
coop in the backyard. And she went to find this retired teacher living in a chicken coop structure on a $40 pension and in poor health. And so, Dr. Andrus went out to 42 insurance companies
who all turned her down, and then that 43 insurance company issued the first ever
group health life insurance for retired teachers. And so, that idea of that chicken coop and our idea of hatching
new innovative ideas that help people live longer lives is really what’s core to AARP. We’ve also engaged in an
innovation accelerator that works with startups and investors to discover big ideas
and bring them to life, and this year, for the first time, working with two FinTech startups, we have in the Hatchery Ventures program. The first one is called Cake. It’s a digital end of life planning tool, and it allows users to explore, document, and share all of their health,
their legal, their funeral, their legacy decisions in
an end of year life plan. We’re also working with a
company called LifeSight, and it’s a digital safe deposit box to store critical documents
for families and businesses. These companies are both part of MassChallenge FinTech accelerator cohort, which is a public-private
partnership in Boston, Mas that matches older or later
stage FinTech companies with people in the startup industry who are willing to
invest in their companies to create new products and services. Another innovative program
we’ve developed is BankSafe. It’s a collaborative
online training program designed by AARP to empower
banks and credit employees to look for the signs of
financial exploitation and to take the right steps to protect the savings of older Americans. Financial exploitation of older consumers is a serious problem affecting one in five seniors. Their average loss is about $120,000. And banks lose almost a
billion dollars in deposits each year due to financial exploitation. And 60% of the perpetrators
happen to be family members. Bank Safe is designed to address four fundamental challenges, protecting older consumers
from financial exploitation, empowering family caregivers, helping those with dementia, and making the banking
environment easy to access. AARP developed BankSafe to empower banking credit union employees with the knowledge, the skills, and the confidence that they need to better understand that older consumer and to stop that financial exploitation before it actually occurs. More than 2,000 professionals from banks, and credit unions, and trades associations,
adult protective services, law enforcement agencies, and those in the legal field of study help provide the testing
for this pilot on BankSafe. And over the last six months, they have trained and reached
almost three million consumers representing about $34
billion in protected assets. So, we think that’s not
bad for our first startup. But on May 8, just a couple weeks ago, we rolled out BankSafe nationwide with the Independent
Community Bankers of America and with the credit union
national association. And this will bring
BankSafe training platform to thousands of banks and credit unions all across this country. And luckily, the BankSafe
training is available for no cost, complements of AARP. So we are very excited
about doing this work. (audience applauding) And I just heard from the staff yesterday, and I know you’re going to hear
it from Cassandra tomorrow from JP Morgan Chase, JP Morgan has just agreed to sign on that every employee who deals
in their banking industry will go through the
BankSafe training program. So give her around of applause
when you hear it tomorrow. (audience applauding) And I’ll give a little plug here. If any of you are interested
in using the BankSafe program, you can go to our website
at People 50 and over want
tools and resources to help them achieve
their financial security. We believe that financial
services industry can help provide those tools. For example, some of the things that we like to see you engaged in, and many of you are
already doing some of this to create innovative ways
to protect older individuals from financial exploitation to create tools that help
financial care givers. One thing is for certain, you’re either going to need a
caregiver or be a caregiver, and there’s an enormous
shortage across this country. And so, as we continue to live older, we need to make sure
that we’re thinking about how we’re going to have that
caregiving plan in place. You can create innovative new ways to help people set up and manage their emergency savings account. And you heard some of the programs that are already available earlier today. You can work with companies to help set up emergency savings plans for employees. We can make the statements
easy an accessible to read, ensure that mobile and remote access is safe and secure without
being too complicated. There is this fallacy that older people don’t use technology, but I don’t know anyone that doesn’t have a cellphone or an iPad that either they’re sharing photos or they’re communicating. And so, we need to make
sure that that technology is simple and easy to use, and that we’re creating
clear and understandable data and privacy policies. In order to take advantage
of these opportunities, you have to build trust. I think that’s where it starts. One thing that we’ve learned from our 38 million members at AARP, and I have to give that
plug because we’re the largest membership
organization in the world, and we just surpassed People Magazine as the most read magazine here in the US. So, take that, People Magazine. One thing that we’ve
learned from our members and people over the age of 50 is they don’t trust us because
they trusted us in the past. We have to create trust
with every interaction we make with them. We must earn their trust by demonstrating shared values, by creating experiences
that are memorable to them, and that really appeal to their interest. Every interaction must contribute to building trust with every exchange that we have with them. And we know for example that four of five consumers prefer having accounts with institutions that proactively fight
against exploitation. The trust actually increases by 41% when that institution
resolves an exploitation issue that they may or may not have had. Building trust with older consumers required creating an
outstanding customer experience and being transparent in
your actions with them. That means putting the customer first. They expect you to really know them, not see them as merely a
transaction or statistics, but as individuals with
whom you’re engaging and that you have a relationship with. Our research shows that 50-plus consumers have clear preferences on
their banking practices. They own 67% of deposits in US banks, and they use a whole range of services. And half of them have been to their financial institution
for more than 20 years. Four out of five still conduct business at their local branch bank, even if they have an online account. And 70% say that the branch employees recognize them when they come in the bank, and 1/3 work with the
banker that they know. So, clearly, having a
relationship is important to older consumers. At AARP, we challenge all of our employees to be everyday innovators in aging, to be change gents who recognize that the concept of aging
is constantly evolving. So, in closing, I want to
throw that same challenge out to every one of you. Are you ready to challenge the outdated beliefs around aging? Are you ready to spark new solutions? I hope the answer is yes, because the ultimate question is, how will we disrupt aging
and not let aging disrupt us? Thank you all very much. (audience applauding)

Leave a Reply

Your email address will not be published. Required fields are marked *