KEY POINTS:
Iutita Esekielu is good with money. The Auckland High Court worker and single mother saves regularly and is already putting money aside for her two children's future.
But good money management alone might not assure her a comfortable old age. Like many parents of young children, she faces not only another 15 years or more of supporting her children, but possibly decades of helping look after her parents, now aged 58.
Esekielu and her children live with her adult sister, student brother and her parents in her parents' house. She and her sister pay most of the household bills, but it still ends up cheaper than renting.
The siblings have already decided that if their parents ever need money for health care, the house will be sold.
"We see that's what's going to carry them through their retirement years," says Esekielu.
And she knows in the meantime the children will have to financially prop up their parents.
She's not resentful. Her father looks after her baby while she's at work, saving her money and stress, and she loves her parents.
But she's worried about her financial future. "I worry in relation to me not having anything other than savings - not having a house or other investments."
Esekielu belongs to the so-called sandwich generation - a generation of adults obliged to add caring for aging parents to their childrearing-work juggling act.
As the population ages, with people living longer and the baby-boom bulge about to swell the retirement ranks, chances are more New Zealanders will find themselves having to support their parents and grandparents while helping their children and grandchildren.
And as the public purse is stretched too thin for all but the most needy, and old-age health improves, economists say post-baby boomers can expect to keep working into their 70s. The implications of our greying population are far-sweeping. Yet, warn some experts, our collective head is still in the sand.
"We haven't begun to think about it seriously," says Susan St John, economist and co-director of Auckland University's retirement policy and research centre. "We're looking at such a dramatic shift in the proportions of working age to retired, and especially the older retired."
She believes the time has come for a Royal Commission on Ageing "that will see how all of the pieces of the jigsaw fit together".
WE'RE IN for an extreme demographic makeover. Consider these Statistics New Zealand projections:
By the mid 2020s, people aged 65 and over will outnumber those aged under 15, and one in five people will be 65 and over.
By 2050, one in four people will be 65 and over and deaths will overtake births in this decade.
The number of people aged 85 and over will mushroom as much as sixfold by 2061.
Half of the population will be 40 or older by 2027 (the current median age is 36, up from 26 in 1971).
What will this look like? Will we see footpaths lined with mobility scooter lanes? A cosmetic surgery boom or a revolt against the cult of youth, bringing sexy lingerie for the older woman and free Viagra prescriptions? Flatting octogenarians? Will Winston finally be prime minister?
And, what about the economists' holy grail of improved productivity - getting more bang for your buck?
At the moment, there are just over five working-age people (15 to 65 years) for every person aged 65 and older. By 2039, the ratio will have dropped to 2.5 to one.
Says ANZ National bank economist Cameron Bagrie: "You're looking at a huge proportion of retirees and a narrow tax base. It's not just the superannuation bill. The health costs are going to be the real kicker... It's imperative over the next 10 to 20 years that we grow the economy."
But the UK experience suggests the workers who we'll be looking to squeeze more out of will be compromised by the sandwich effect. One report this year found one in eight British adults have elderly parents or in-laws who need assistance, and estimated unpaid care by adult children for their parents costs £113,149 ($297,000) over a 10-year period.
And in New Zealand, more of tomorrow's workers will have grown up in poverty, with one in four children now living in hardship according to a report by the Child Action Poverty Group.
"Child poverty will have long-term effects on how well we're cared for in our old age," says St John.
Internationally, experts warn of a gathering global dementia epidemic. Sue Brewster, of Alzheimers New Zealand, says going by current dementia rates of one in 10 people over 65, we can expect 100,000 people with dementia by 2050.
A 2003 report found dementia cost Australia $6.6 billion in direct costs and lost taxes from carers.
The Neurological Foundation, whose appeal week starts today, says greater investment in brain research is critical because of the huge social and economic impact of brain disorders.
Others are more optimistic. "The outlook for planning around services for older people is positive," says Auckland University gerontologist Dr Matthew Parsons.
The area has been revolutionised by the "ageing in place" model, where the aim is for old people to stay in their own homes as long as possible, and for tailored services to come to them.
Parsons says the new philosophy extends across the board, from urban planning to an emphasis on rehabilitation at hospitals and looking after unpaid carers, who are often family members.
However, as more people enter old age, the thresholds for free care will rise. There are signs older people are already relying less on the state for health care.
In the 2006-2007 financial year, health insurer Southern Cross saw the largest percentage increase in members in the 65-plus age group.
The monthly premium for the insurer's most popular hospital, specialists and tests plan jumps from $110.63 with no excess at age 60 to $204.71 at age 65, where it remains.
Chief executive Dr Ian McPherson says members are saying they're stretching their finances to hold on to health insurance.
IF THERE'S one thing that will make or break how well we age it's the fate of New Zealand Super, according to St John. Along with other experts, she worries KiwiSaver will jeopardise our world-leading pension scheme that guarantees a basic standard of living for all.
Her colleague Michael Littlewood predicts super may be linked to KiwiSaver income as soon as 2020, as the combined government tab for super and KiwiSaver blows out.
St John and Littlewood are deeply critical of KiwiSaver. They say it will compound gaps between the rich and poor, with low-income earners missing out on Government subsidies because they can't spare 4 per cent of their income.
And, says St John, there's nothing to stop people frittering away their KiwiSaver windfall in their late 60s on a trip or renovations.
She's also nervous about the marketing of reverse mortgages to a younger group. "People tend to be myopic and underestimate how long they might live."
St John is "reasonably pessimistic" about the future because we're not seriously planning for the aging population. Then again, we shouldn't underestimate our capacity to adapt.
Retirement Commissioner Diana Crossan is encouraged by the Government's announcement last month it will set up a working party on aging. We've got time, both as a country and as individuals, she says. "People often imagine they'll need a lot more to retire on than they will. They have visions of themselves needing a bach, a beemer, a barbecue, and actually they may not."
Even before KiwiSaver, we were probably saving enough to continue our lifestyle into retirement, although a decline in home ownership may change the next generation's outlook.
Forecasts are limited by the necessity for making assumptions that may not come to pass. The ratio of working to retired could be higher if people stay in the workforce longer, which is already happening.
Migrants may also be called upon more to plug workforce shortfalls, although Bagrie warns we can't rely on migrants solely, partly because we'll be competing with the rest of the developed world. Continuing medical advances may lessen the health costs of future old age, and what now seems like they are dire solutions may turn out to have silver linings.
Auckland couple Alexandra and Geoff Constantine never expected they'd end up jointly owning and sharing a house with Alexandra's parents. The younger couple, a freelance writer and electrician with two young children, live upstairs and the grandparents live downstairs, each with their own bathroom and kitchen.
Alexandra says the arrangement works. "My mum can see the grandchildren all the time and I've got a babysitter. We'd never have been able to afford a house like this alone."
