IL Estate Planning Blog

Thursday, September 10, 2015

How the Internet of Things Will Upend Retirement

How the Internet of Things Will Upend Retirement

Taken from the Wall Street Journal- June 1, 2015 

JOSEPH COUGHLIN: The Internet of Things, where all things around you, on you and, soon, in you, begin to talk, offers great potential to improve how well we will live in retirement and older age. These tech-enabled services will support many people who live alone in retirement, often at a distance from family. Just consider that more than 40% of women 65-years-old and older live alone. For those providing care to an older loved one, the services enabled by the Internet of Things will provide additional eyes, ears, and even a helping hand to stressed family caregivers.

Imagine a world where everything around you is “smart.” Everyday devices sense your movement, habits and changes in behavior. Your home will have two architectures: One, the physical design you see and experience every day, and the other a cyber, nearly invisible set of sensors and connected service providers that monitor, manage and motivate daily behaviors to support your well-being. Already today there are countless systems that glow, buzz or ring to remind you to take your medications. Once “dumb” devices that only kept food cold or made your morning coffee are now smart, helping ensure that you are eating and sleeping well. Your refrigerator will track your eating habits while your coffee-maker may signal a change in your sleep habits and morning routine. Connected to health-management call centers, family and friends, your toaster may tattle on your daily carb intake. Even today’s geek-chic wearable device will eventually be a conduit of physiological and behavioral information to your smartphone and beyond. While providing extraordinary benefits, the Internet of Things may also introduce new costs in older age.

Future expenses in retirement have generally been foreseeable. Housing and transportation are the big-ticket items, with health and long-term-care costs being wild cards. However, the Internet of Things will generate a whole new range of future and monthly costs that will soon be as routine as the one-time luxury of cable television. Even off-the-shelf basic monitoring services available today can easily become an additional $100 monthly out-of-pocket expense. Soon the price of new appliances will include a monthly service fee to enable their full range of functionality. For those who might say they will never pay for such “add-ons,” ask if they own a cellphone with a monthly cost, along with a digital service fee that enables the apps they recently bought from the cloud. The Internet of Things will create a new line-item of monthly costs in our retirement budgets. These will be expenses that are neither strictly health care nor communications, but an entirely new price of living well in older age.

Another unspoken cost is less about money and more about information and time. How will individuals or families identify the best fit of appliances, sensors and services to provide both convenience and care in retirement living? There is currently no nationally recognized objective “smart buyer” adviser for cyber-enabled aging. Who will provide the installation, training and maintenance of these services? Today’s call center services will not be acceptable to tomorrow’s user of smart-living technologies. While the Internet of Things promises amazing potential one device at a time, older adults and caregivers want integrated solutions, not products that create more work.

Finally, the Internet of Things is ultimately about communicating information—very personal information. Living in a “smart home” comes at the price of privacy. Users of the Internet of Things must determine that the intimate information they share will be protected by trusted organizations. Moreover, the services provided must produce an extraordinarily high value of convenience and care outweighing costs to retirement savings and privacy.

Tomorrow’s retirement living will be shaped by technology. While high-tech will provide incredible benefits, it will also bring new costs, both financial and social, that should be considered as a new part of retirement planning.

Joseph Coughlin (@josephcoughlin) is director of the Massachusetts Institute of Technology AgeLab. He conducts research, writes and speaks on the future of global aging. His current work focuses on the role of advice and engagement on retirement planning and well-being on


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