Once upon a time, the popular notion of retirement was to work into your mid 60s, then retire, relax and live off your retirement savings or Age Pension for the few years remaining.
Nowadays, many people are working well into their 60s, often to their mid-70s, then retiring and living healthily into their late 80s and early 90s. Traditionally retirement was never meant to last that long and with many having to live off whatever savings they have for 20 or more years, it may be time to redefine retirement.
New research by BritainThinks has found that most people’s idea of retirement is not met by the reality. In fact, most of the survey participants were disappointed by retirement, especially at having to scale back their dreams and aspirations to meet the cost of their later years.
Some people found they are having to work much later in life than they had originally planned. Whilst many have had to spend their retirement savings to cover the cost of providing unexpected, unpaid care for a loved one. All of these retirement roadblocks underline the importance of planning and preparation, but finding this practical support is quite often difficult.
Still, with all this in mind, 62 per cent of UK retirees consider themselves happy, compared with 42 per cent of those not yet retired. The study also found that many people enjoyed working later in life, as it kept them active both physically and socially. In fact, many had proactively planned to work later in life in order to boost their retirement savings or to maintain their lifestyle.
The four clear needs that arose from the research were:
- keep people engaged with a retirement savings plan, including providing a retirement roadmap
- support for retirement savings plans, including warnings of falling behind, a 50+ wake-up call, financial advice and intervention (when necessary)
- to guide older people as they wind down their working life
- providing support if they have to care for someone.
In Australia, much of the support for life in retirement is focused on financial matters, which is obviously quite important. But money isn’t everything, and for many people who have worked their entire lives, retirement often sees them at an emotional loss. A number of retirees will become less physically and mentally active and lose the social connections they enjoyed whilst they were working. They may then quickly spiral into a perceived lack of purpose, which can lead to a mental decline bringing about depression and other illnesses.
A lot of older Australians will not like the idea that retirement, in the traditional sense of the word, may actually be, or about to be, a thing of the past. However, working in later life can be just as fulfilling as retirement. Work provides a sense of structure, purpose and opportunities to learn and engage socially and, so long as older workers are supported, may even add to quality of life in later years. It could even add years to your life.
All this sounds great, but what of the limited employment opportunities open to older Australians? Well, according to Australian Bureau of Statistics (ABS) research, as of 2010, people aged 55 years and over made up 16 per cent of the total labour force. The Government offers incentives for employers to hire older workers, but the opportunities for full-time work for over-55s just aren’t there.
But that doesn’t mean you can’t do things that simulate the benefits of working. There are plenty of volunteer groups and opportunities for social engagement, such as community groups and organisations. Or you could start a small business or look to offer your particular skills to specific associations that require them, such as using your book-keeping skills for a charitable cause. And there’s always someone looking for a handyman, so why not market yourself as such?
If retirement is indeed becoming a thing of the past, then we all need to adjust accordingly, so we can ensure that we are happy, healthy and enjoy a better quality of life in our later years, whether retired or not.
Do you think the classic model of retirement is redundant?