Why our retirement provision is torn between the desire for provision and the dream of independence

For a moment she struggled to get her bag out of the plane’s overhead compartment. “May I?” I asked. “Thanks, I’m fine,” she replied. The Westerner’s typical response when he’s slightly embarrassed that you’ve caught him acting a little dependent. “I got it, didn’t I?” she said with a smile. I remember that incident many years ago.

The independence of older people in the western world can amaze us a little from India. The ranger who took us to the bear trail in the national park was 80 years old. “I love my job and enjoy doing it,” he said. He drove himself to work every day, made his simple sandwiches for lunch, and had a wink when he spoke about his late wife. Not once during the three hour hike did he seek our sympathy or care because of his age. He prided himself on his fitness and jokingly attributed it to the forest air.

In contrast, it is painful, if not embarrassing, to see perfectly fit Indian adults using wheelchair assistance to board planes at international terminals. It’s a uniquely abused privilege. Reasons given include missing the boarding gates, unwillingness to walk or take trains to another terminal, inability to follow signs and reach a specific terminal or gate, not knowing the language to get around to seek help, and so on. The rest of the world seems to have solved these problems, which only plague India’s seniors who visit their children on board.

Why are we so different in India when it comes to aging? Our cultural context celebrates dependency. We pride ourselves on being together and routinely doing chores and chores for each other. We also volunteer to help very easily in situations where we see a need, which is a great trait. We don’t need to be told to get in touch, nor do we wait to be asked. Being served is something we accept or even expect. The simplest tasks that can be performed independently are routinely done by others, at a price we willingly pay or as a right.

We love privilege. In our minds we are still monarchies with kings and hierarchies. We bow and bow easily to power, love favors, and openly seek and show respect. Gratitude is a virtue in our society and we expect it for every small favor we have granted. Maybe that’s why we get annoyed and annoyed about old-age provision and old people’s homes. Many elders see this as admonition or abandonment by their children. Many children feel guilty and inadequate when they have to choose a senior living facility for their parents. Adult children are routinely expected to alter their career aspirations to meet the demands of their parents. Parents who receive such preferential treatment wear it as a privilege. Things are changing, some would protest. The changes are visible, but we as a society are caught in several stages of this transition. The dissolution of the common family system was the first change. Then we have the post-age cohabitation phase, where we expect children to take care of the elderly by taking them into their homes when the parents are older or single.

Then we have elderly parents living independently who are cared for by other relatives or paid carers, but remain dependent on such help for everything from routine work to special situations. Then we have those who vow not to depend on their children but live with physical and financial limitations that remain as a lawsuit. There is only a small minority who convince themselves that independence requires planning for both money and health until the end. Our elderly population is still in these various stages of dependency. That is why retirement provision is torn between the desire for provision and the dream of self-employment.

We still don’t have enough fit and happy seniors whose lifestyles inspire others to give up their clinging to privilege and dependency. What we have instead are swanky retirement colonies where money can buy services. We enjoy paid care and consider funding from our own pension corpus to be an act of independence. Many retirement plans have the goal of staying in a fancy retirement home.

The problem with this approach is that if the consumer’s weaknesses are recognized, the market for these services will move faster. We’re already seeing it in many big cities, where frills are added to sell a facility only to disappear in a few years. Exploitation practices arise when buyers of a service operate from a vulnerable position. It’s still early to tell how the senior living market will evolve, but I’m betting it will be exploitatively designed and priced reasonably. The result is excessive pension funds.

The web of choices in retirement is complicated by the rise in home ownership. People don’t want to leave their homes to live somewhere else. While inheritance disputes still occur, it is also common for parents and their adult children to buy property for each other. They usually don’t want to sell. They are looking for solutions where living in the house remains the base case. We now have several specialized services for such seniors, from catering services to errands to nurses tending to the sick. The consequences are crooked portfolios and costly outflows of funds. An Australian friend of mine once remarked that given its population size, India usually throws people at any problem it wants to solve. Our retirement savings need more funding because of the choices we seem to be making as we age. We remain too far removed from the Western model of independence. We also never miss an opportunity to point out that there is so much more to our culture than sending people to western-style assisted living.

What is forgotten is that the West makes its choices early on so that children and the elderly remain in charge of their own lives as adults. No one “sends” someone else to an assisted living facility. The seniors live alone and fund their retirement through mandatory tax-deferred savings invested in market portfolios. They move into assisted care with great regret when they become too old or too frail to live independently.

Our retirement model is jumbled at every stage: goal setting, funding, investment strategy, utilization and legacy because we haven’t answered the fundamental question of how independent we really want to be.

(The author is Chair of the Center for Investment Education and Learning.)


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