Financial gerontology
Financial gerontology is a multidisciplinary field of study encompassing both academic and professional education, that integrates research on aging and human development with the concerns of finance and business. Following from its roots in social gerontology, Financial gerontology is not simply the study of old people but emphasizes the multiple processes of aging. In particular, research and teaching in financial gerontology draws upon four kinds of aging or "'four lenses" through which aging and finance can be viewed: population aging, individual aging, family aging, and generational aging. While it is problematic that "demography is destiny," demographic concepts, issues, and data play a substantial role in understanding the dynamics of financial gerontology. For example, through the lens of population aging, demography identifies the number of persons of different ages in cities and countries—and at multiple points in time. Through the lens of individual aging, demography also notes changes in the length of time—number of years lived in older age, typically measured by increases in life expectancy. From in its founding years in the beginning of the 21st century, one primary interest of Financial Gerontology has been on baby boomers and their relationships with their parents. The impact of these two kinds of aging on finance are reasonably apparent. The large and increasing number of older persons in a society, no matter how "old age" is defined, and the longer each of these persons lives , the greater the impact on a society's pattern of retirement, public and private pension systems, health, health care, and the personal and societal financing of health care. The focus on boomers illustrates also the other two lenses or "kinds" of aging. How boomers deal with the social, emotional, and financial aspects of their parents' aging is a central aspect of family aging. And how boomers may differ from their parents born and raised twenty to forty years earlier, and differ from their Generation X and Millennial children and grandchildren, are substantial aspects of generational aging.
Origins of financial gerontology
Establishment of the field of study
The origins of financial gerontology reflect the vision of two business professionals, Joseph Boettner, a successful insurance salesman and entrepreneur, and Davis Gregg, a successful business educator and administrator. Boettner was born in 1903 and left West Philadelphia High School to work in the city's booming insurance industry. Building from a successful career in sales he purchased the failing Philadelphia Life Insurance Company, and established it as a successful company. Boettner's post-high school education was with the American College of Life Underwriters, then an insurance education program within the University of Pennsylvania's Wharton School of Business & Finance; he earned his Chartered Life Underwriter designation in 1934. Born in 1918, Gregg graduated from the University of Texas and earned his PhD from the University of Pennsylvania in 1947, where he studied under the legendary professor of insurance Solomon Huebner, the founder of the American College of Life Underwriters and considered by many to be the "father of insurance education" Gregg was on the faculty of Stanford University when Huebner asked him to come to the insurance college in Philadelphia for a short time. The "short time" became four decades including thirty years as the college's president.Combining his wealth and continuing interest in financial education, Boettner made several investments in higher education, including endowing academic chairs primarily in the realm of life insurance programs. As both his business perspectives and his experience with personal aging evolved, however, his views about the educational needs of the insurance industry also changed. Although his own resources allowed him to respond successfully to the financial challenges of aging, he became increasingly concerned about how the average person can deal with aging and, of equal significance, how educational programs could be created to respond to the needs and concerns of aging persons. Over the years Gregg's intellectual experience as dean and president encouraged him to expand the college's distance education curriculum beyond the CLU designation which focused substantially on life insurance. Under his leadership the college developed a second professional designation, the Chartered Financial Consultant whose approach included financial planning courses beyond life insurance.
By the 1980s Boettner's concerns about personal aging and financial education began to merge with Gregg's views on the need for more comprehensive professional education in the expanding field of financial services. A result of these joint concerns was the concept and a plan for a new research institute that would focus on the interconnections among social gerontology and personal finance. With a small gift from Boettner, Gregg convened a study committee of nationally known gerontologists which, after two years of assessment, agreed on four organizing principles: that there was in fact a need for specialized research that integrates gerontology and financial planning; that a social gerontology research center could succeed at a small specialized business school; that the permanent director of the institute should be an experienced gerontologist because the financial side of the relationship would be provided by the business school's faculty; and that the new institute would be communicating gerontological concerns to financial professionals and financial concerns to gerontologists.
The Boettner Institute of Financial Gerontology
On July 4, 1986 American College established the Boettner Research Institute under Gregg's supervision. Its first permanent director was Neal E. Cutler, a professor of political science and gerontology, recruited in 1989 from the University of Southern California's Andrus Gerontology Center. A challenge of the new leadership team was to create a more content-descriptive name for the institute. A pensions or retirement institute was considered, but this was somewhat narrower than the mandate of the new institute; further, the Wharton School at the nearby University of Pennsylvania already had a well-established Pensions Research Council. More critically, the new institute was to be unique in emphasizing the contributions of gerontology to a broad range of academic fields and financial professionals. Fortunately, as models there are several well-recognized gerontological interdisciplinary sub-fields, including biological gerontology, social gerontology, occupational gerontology, and recreational gerontology; and the phrase "financial gerontology" was starting to be seen in professional publications. Consequently, in 1990 "Boettner Institute of Financial Gerontology" was chosen as the official name in order both to create new sub-fields in both gerontology and in finance, and to describe and communicate the institute's scope of academic and professional education and research.The initial professional and public recognition of the significance of Financial Gerontology was substantial, and to some extent exceeded the expectations of its organizers and advisers. In response, the desirability of a broader set of academic supports than originally planned was identified. In 1992 the Boettner Institute of Financial Gerontology became chartered as a nonprofit charitable educational corporation with an independently appointed board of trustees of prominent business and gerontology academics and practitioners. The same year, the trustees voted to move the institute from The American College and accept an invitation to become affiliated with the University of Pennsylvania School of Arts & Sciences. In order to establish that the foundations of Financial Gerontology were both to learn from and speak to the disciplines of gerontology and financial services, the Boettner Institute organized a series of published lectures given by renown experts in the "two sides" of Financial Gerontology. The inaugural lecture was given in 1997 by George L. Maddox, Director of the Duke University Center for the Study of Aging and Human Development: "Age and Well-Being." Other lectures included: William C. Greenough, CEO of TIAA-CREF and developer of the variable-annuity stock fund: "Critical Policy Issues for Pensions".
Matilda White Riley, Director of the Office of Social and Behavioral Science, National Institute of Aging: "Aging in the Twenty-first Century".
Davis W. Gregg, Founding Director of the Boettner Institute: "The Human Wealth Span: A Life Span View of Financial Well-Being".
James E. Birren, psychologist and founding director of the USC Andrus Gerontology Center: "Information and Consumer Decisions-Making: Maintaining Resources and Independence".
Dallas L. Salisbury, CEO of the Employee Benefit Research Institute: "Recent Trends in Pensions, Benefits, and Retirement: In-House Research".
In keeping with its established academic naming practices, the University of Pennsylvania renamed the Institute as the Boettner Center of Financial Gerontology. In 2003 the Center was moved into the university's Wharton School as the Boettner Center for Pensions and Retirement Research affiliated with the business school's Pension Research Council, under the direction of Olivia S. Mitchell. The Wharton School is also home to one of the two Boettner-funded endowed chairs in Financial Gerontology.