Is retirement dead?
The traditional concept of retirement as a career farewelled with a gold watch and twilight years of lawn bowls and afternoon naps is being increasingly challenged by a number of factors.
By 2030, the average Australian life expectancy is anticipated to be 84.5 for men and 87.8 for women. While the over-65 age group represented 14 per cent of the population in 2011, the Australian Bureau of Statistics estimates this will be around 24 per cent in 2056.
Not only are we living longer, generally, we are living healthier for longer. In addition to the retirement savings gap, there is a growing “retirement time gap” where people can expect to enjoy relatively good health for an extended period beyond 65.
The fact that we are generally living longer firstly puts increasing pressure on our ability to fund our retirement as well as highlighting the desire to stay active and connected in the community.
Many of the early baby boomer generation – those now aged 60 or more – reject the traditional notion of retirement. They want to continue to be engaged with the world, to use their hard won skills and experience in productive ways, and to have the option to earn extra income.
It is noteworthy that growing numbers of older workers say they will never retire. The most recent Australian Bureau of Statistics (ABS) Survey of Retirement and Retirement Intentions shows that 13.3 per cent of people aged 45 and over say they intend never to give up work completely. And even if we do retire from work, retirees these days are routinely doing things their predecessors never did – playing greater roles in their families and communities, travelling the world and taking up new hobbies with gusto.
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Longer life expectancy, greater health in later life, and technology advances are creating a broader range of options than ever before. Work locations can be anywhere we like. The internet, ready access to information and the dramatic growth of online businesses are changing our lives.
Those leading-edge baby boomers who reject the traditional retirement models are taking advantage of these factors to create secondary careers.
ABS and other research show that there are quite different motivators expressed by high income and low-income baby boomers concerning their later year careers or retirement plans.
High-income boomers are more likely to embrace a change of career, or career reinvention, which may include paid work, income from private business activities, pro bono work, volunteering and mentoring of younger people. Low-income boomers are more likely to perceive they will have to continue to work beyond retirement age purely for financial reasons. Their choices are much more constrained by necessity.
While traditional retirement is far from dead, there is a clear trend towards older people delaying retirement and working for longer. Whether this is from financial necessity or choice, there are significant implications, not only for these individuals themselves, but for policy makers, service providers and businesses. The leading-edge baby boomers are a large group and the numbers following them are even greater.
Related links:
How to save on your superannuation fees
A guide to planning for your future
How to make your retirement money go the distance