The nature of retirement and the decisions around it are changing. Since the removal of the default retirement age in 2011 the decision when to retire is largely in our own hands. This gives us more opportunities but also means that for some of us there is a danger of drifting on at work, not making a decision and missing the opportunity that retirement presents.
Other changes such as more phased retirements, a later state pension age, the advent of pension freedom and the increasing length and active nature of the retirement period are also making us see and plan retirement differently.
There are 3 different sets of challenges as we approach retirement.
The first and most obvious one is finance and concerns about whether we will have enough money to support ourselves and also be able to enjoy our retirement. Although there are important decisions to make close to retirement, especially with the arrival of pension freedom, it’s important to plan retirement finances much earlier. It’s recommended that you review your plans around age 50 while there is still time to take action to build up your finances.
The second challenge is lifestyle and in particular how to spend our time in retirement in an enjoyable and fulfilling way. We’re all different; some of us can’t wait to retire, others are concerned or even frightened about it. So it’s important to plan sufficiently to understand exactly what it can mean to us personally and be able to approach it logically rather than emotionally.
The third challenge is deciding when the right time to retire is. It can be a difficult decision, especially for those of us who have concerns about retirement and how we’ll spend our time or who just aren’t very good at making decisions. Surveys show that even those of us who are really looking forward to retirement can still be apprehensive about it. So there’s a real danger of drifting on at work rather than making that decision, to the detriment of ourselves, and potentially of our employer.
This all means that it really is worth doing a bit of retirement planning to make sure we decide when is the right time for us to retire or partially retire, and to make sure we get the most out of our retirement. Think about all the time that most of us spend planning our annual holiday. We get the brochures, talk to travel agents and other people, trawl through the internet and compare different options. Why do we do this? We do so to make sure that we make the right choice and so enjoy the holiday. Our holiday will probably last about two weeks - 14 or 15 days. Retirement could last 10,000 days and it’s a time of opportunity and choice, so it's worth spending some time planning it so that we make the right choices, be fulfilled and really enjoy it.
We need to do our planning in the context of what retirement is like these days, the choices and opportunities it provides and the pitfalls if we aren’t careful.
The first thing to say is that retirement is one of the most significant life changes that we ever experience. It ushers in a change of life as significant as getting married or having a first child.
Suddenly we have 40-50 hours of extra leisure time, on top of previous leisure time, every week, with hopefully 20-25 years of good active life stretching ahead of us. In addition, for the first time in our lives, we have no structure and no-one demanding our time - we can choose how to spend it. Previously we’ve always had structure; first from our parents, then from school, then from work, but now suddenly there’s nothing to fall back on. It’s a great opportunity to write our own ‘job description’, but it’s also a tall order to decide how to spend all this time in a way that is both enjoyable and fulfilling.
You can get retirement wrong too; there are pitfalls ranging from relationships (where suddenly you may be spending more time with a partner than you ever have done before) to loss of social network from work, loss of status and self-esteem, neglecting health and fitness and having insufficient stimulating activities.
By contrast, those that have a successful retirement have a range of interesting and fulfilling activities that enable them to achieve the 5 fundamentals of retirement:
The bottom line is that retirement today is another major phase of life. There are huge opportunities and if planned properly it can be the most satisfying period of life, in which you are in control.
So whatever you choose to do make sure you take advantage of a retirement planning workshop such as the ones offered by CABA in conjunction with LaterLife. It’s worth spending one day to make the most of the next 10,000!
Tony Clack is MD of LaterLife which he founded in 1999 after 30 years in the IT industry working in various Senior Management and Business Consultancy roles. Interactions with thousands of retirees and their organisations each year gives LaterLife and Tony a unique insight into retirement today and how it is changing.