Have you ever thought about what your lifestyle will look like in retirement? Let’s say you have worked hard for 40 years, your children have left home and you are looking forward to spending more time with your partner, travelling, gardening and perhaps playing a bit of golf. Sound reasonable?
Well, it seems that an increasing number of people aren’t satisfied with that as their lot in life. The concept of retirement is becoming far more fluid and it has evolved to mean completely different things to different people. Traditional concepts of retirement are increasingly being challenged by those who do not see a granny flat and a pair of slippers at 65 as their personal utopia.
According to a recent HSBC survey on global attitudes to aging and retirement, 80 percent of people want to scrap mandatory retirement and 75 percent want to keep working in their old age. These are truly startling results and although the results of a 2005 survey on retirement in New Zealand showed that New Zealanders were more content with the idea of retirement than our global peers, there is little doubt that the concept of retirement has changed.
One of the main reasons for this is that people are living longer and want more out of their retirement. Life expectancy amongst OECD countries has increased from 69 in 1960 to 77 in 2001 and experts predict that by 2050 - for the first time in human history - there will be more people over the age of 60 than under the age of 15.1 In New Zealand by 2050, average life expectancy is anticipated to be 83 for men and 87 for women (this is currently 76 and 81 respectively).2
1 – AXA Retirement Scope Survey, May 2005
2 – Statistics New Zealand
Source – Statistics New Zealand
Secondly, many people reaching retirement are finding it is not living up to the dream they had envisaged. In a talk to financial advisers in the USA, Mitch Anthony, author of the book The New Retirementality, explained this succinctly. Anthony told a story about two men, whom he called Gary and Larry. They had been friends for years but were in very different financial circumstances. Larry possessed the financial resources to retire to his Floridian condo at age 55 and Gary (who was unable to retire and had to work for another 10 years) was understandably jealous.
But Larry was the one who deteriorated physically and emotionally because he, as Anthony explained to the audience, “had reached an artificial man-made finish line in his life. Once he reached it, he didn’t know where to go. He was out of the race. He soon found out there was a lot he would miss: the engagement in something productive, the relationships and the interplay with people he really liked, the challenge and the competitions, the feelings of self worth that seemed largely to be tied to his work. He was relegated to the grandstands of life and that was no longer a part of the game.”
Anthony went on to say that the problem was with the concept of traditional retirement which was flawed to the core and “cannot deliver on the promises it makes”. People generally are engaged and have a sense of worth in their working lives and then all of a sudden at a predetermined age it all stops as we reach the so-called ‘finish line’. Solicitors, bankers and shopkeepers are instantly rendered ‘retirees’ and many cannot cope with the boredom, the loss of status, and the lack of mental stimulation.
This is why many people are continuing to work during their retirement. Rather than looking at retirement as the ‘goal’ or the end game, there is a gradual transition where people can perhaps work part-time and thus maintain relationships, mental stimulus and a greater sense of worth.
None of this is to say there is anything wrong with wanting the gardening, the fishing trips and a life of leisure, but it is important for us all to acknowledge that retirement is no longer a static concept. It should not be seen necessarily as the goal we all are striving for, as it will mean different things to different people. The sooner we all consider what it means individually for each of us, the sooner we can create a ‘life plan’ as opposed to a ‘retirement plan’.
Give us a call if you wish to discuss how to create a ‘life plan.’