Episode Details

Episode overview

In this episode of Investments Unplugged, hosts Kevin Headland and Macan Nia mark International Women’s Day by exploring longevity through the lens of women and financial preparedness. They’re joined by Director, Multi-Asset Solutions Erica Camilleri, who shares thoughts and research on why longevity risk is higher for women, how today’s macroeconomic backdrop (including higher cross-asset correlations and persistent inflation) can amplify retirement risks, and what investors can do—through better planning, appropriate risk-taking, and sound advice—to reduce the odds of outliving their savings.

Key topics & insights

1. Longevity risk and why it’s higher for women

• Financial shortfall risk gap — Manulife research found that women in Canada face a higher risk of experiencing financial shortfalls in retirement than men do (34% vs. 29%).
• It’s not just living longer — Longevity risk stems from a mix of longer (and rising) life expectancies, plus structural and social factors that can reduce lifetime savings and increase retirement vulnerability.

2. Health, wealth, and “longevity preparedness”

• Health and wealth are intertwined — The conversation emphasizes that longevity preparedness isn’t only about financial issues; for example, poor health can worsen retirement outcomes and vice versa.
• New tools and frameworks — The “longevity preparedness index” is designed to measure readiness to thrive while aging in retirement and is expected to expand into Canada in coming years.

3. The role of incentives and behaviour change (and why it matters for outcomes)

• Incentives can drive better habits — The episode highlights research over decades indicating that specific goals outperform vague “do your best” goals and discusses how incentive-based programs can encourage healthier behaviour (and, by extension, better long-term outcomes).

4. Structural inflation is still a long-term retirement risk

• Inflation has moderated cyclically but remains structurally higher — Even if inflation trends toward central bank targets, the episode argues households are still living with a higher price level and that long-run inflation may settle in the mid-to-high 2% range rather than the pre-pandemic norm.
• Retirement math is sensitive to small inflation shifts — A modest upward shift in expected inflation (example discussed: +40 bps) can materially raise required savings/asset levels for retirement (example cited: a 30-year-old might need ~19% more assets).

5. Portfolio construction challenges: higher correlations and concentration risk

• Diversification is harder when correlations rise — The hosts discuss higher correlations within equities and between equities and fixed income, plus increased market concentration—factors that can make portfolios more vulnerable to shocks.
• Longevity risk is amplified by portfolio risk — In a “fluid” market backdrop, managing drawdowns and sequence-of-returns risk becomes more important for sustaining long retirements.

6. Mitigating longevity risk: saving earlier, compounding, and appropriate risk

• Start early; small changes matter — The conversation stresses the power of compounding and the outsized impact of starting earlier (even with small incremental improvements).
• Avoid being overly conservative — The episode argues many investors (especially in defined contribution plans) are too conservative, and that growth asse