“Retirement,” writes leading 50+ writer Tony Watts, “is being redefined.” So how do you retain control of when you put your feet up?
It all used to be so simple. In the days of full(ish) employment, you worked until your allotted retirement day, politely received your clock or watch, and went off into the sunset to tend the roses. You knew what to expect in terms of your state and company/private pension in the years ahead, and cut your cloth accordingly.
Today’s pre-retirees are contending with a slew of often-conflicting factors. Putting aside all the variables on how your pensions, savings and other assets might perform over the years ahead, and for how long you will need to make those assets stretch, there is the whole business of electing when to actually give up work.
Unemployment amongst older people
Doggedly high unemployment rates amongst the over 50s are not as well publicised as those affecting young people – but they are serious: almost 400,000 people aged 50 and over are unemployed and over 40% of those have been out of work for over a year. Many more have given up even trying to find employment and don’t even register in the figures.
Not so easy for those who had been relying upon their 50s and 60s to top up their pension and savings pot.
Conversely, the demise of the Default Retirement Age means that those in work now have far more say when they leave employment: reaching ‘retirement age’ no longer triggers an automatic process. Moreover, many enlightened employers recognise the value of retaining or even recruiting the experience of older workers – not just to mentor younger employees but also because (in many fields) it’s seen as a positive to be served or advised by someone with grey hair.
In many instances, employees and employers are striking a mutally-agreeable arrangement to work part time, or slowly wind down the hours they work.
Certainly older women are finding their retirement age being postponed as ‘retirement equality’ kicks in, and the Government is keen to keep the figure rising for both sexes as a way to keep down Government spending. 67 will soon be ‘the new 65’ for men and ‘the new 60’ for women.
How long must I work for?
Tellingly, the DWP Government department responsible for developing new policies in this arena is called ‘Redefining Retirement’; and, in truth, it appears to be the way we are heading as a society.
The bald fact is that many of us cannot afford to give up work entirely, while many more (not unreasonably) feel entitled to ‘keep their hand in’. This may involve having to reskill or explore new avenues to find employment, but today’s older generation is far healthier and more active… so why not?
The dilemma for many is: do I need to keep working in order to have enough to retire on… and, if so, how much do I need to earn and for how long? The sums are difficult to calculate, because staying at work will also impact upon your State Pension (you can elect to postpone it and receive a higher amount later) as well as other benefits and allowances. Delaying converting assets into income streams will also add to the complexity of the calculations.
It’s far better to have all that information as early as possible, and to work through all your options with all the facts at your disposal. The message is: take control of your retirement… and not the other way around.
(Footnote)
A sure, and very clever way to take control of your retirement is through the RetireEasy online software programme. Feed in your income and outgoings and you can see at a glance what you can afford to draw in the years ahead – and when you can afford to retire in comfort.
