Wednesday, January 23, 2019

World without retirement, coming sooner than you think

Are we heading towards a world without retirement? We know that Boomers are changing what retirement means.  From a personal perspective, we can redefine what work means to us. It is interesting that Boomers are not alone in looking at the reshaping of retirement. Generation X (born between 1960-1980) and Millennials (born between 1981 and early 2000) are disconnecting from the traditional idea of retirement. 

Some of the reasons may be that changes to government retirement policy tend to confuse most of us. The idea of a state pension can give a false impression that it will provide enough for a comfortable retirement when the reality is that it only delivers a basic income. Because of this wrong impression, many switch off when the subject of pension provision is discussed.

People are concerned and many know or think they will have to work at least parttime when they retire. Not because they want to but because they have to work. In their report Gig Economy Workers and the Future of Retirement,(pdf file) investment firm Betterment found that 16% of Americans plan to take a gig job in their retirement. Similar numbers are likely in the UK. Another option for retirement might be a combination of flexible working, it could be finally turning a hobby into self-employment, it could be a combination of part-time work, mentoring, volunteering and retirement. There are no set rules any longer.

However, retirement can still mean stopping work altogether, but for a growing number, retirement is being redefined as something that is just one stage in your life – a stage that could enable you to take a different path to increased levels of wellbeing and financial security. 

Whether it’s developing a ‘side hustle’ or opting for semi-retirement, a key takeaway is that it’s crucial for workers to nurture different options for their autumn years

According to research from pension firm Aegon, more than one in four people (27%) think they will be working either full- or part-time at age 70.


Money,  or lack thereof, is a key component to this trend. Last year a survey from the Financial Conduct Authority found that one in three people in the UK has no pension savings, and will have to rely entirely on a state pension in their retirement.

Another option is to work parttime in the gig economy and become semi-retired. Semi-retirement is becoming increasingly attractive. According to research from HSBC,(pdf file) more than half (54%) of working age people who plan to retire want to stay in the same job or career but work fewer hours.

If it’s handled well, developing a flexible career now could mean retirement becomes an evolution of the work you are already doing. This could be a good thing, not only from a financial standpoint but also in terms of wellbeing.


What “retirement” actually means today is clearly changing, and this is affecting the workforce as well as individuals. According to Aegon, since 2000 the balance of the workforce has changed. People increasingly delay retirement, or work in a different capacity beyond typical or state pension ages, resulting in a higher number of older workers.

Business is becoming acutely aware of the value their older employees bring to their enterprises. Often, employers don’t want to lose the expertise, skills and experience older workers have so they are willing to allow workers to "semi-retire". 



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