Planning your retirement is getting more complex, so what are the key trends impacting the way we set our ‘golden years’?
As our population ages and the way we live changes, retirement, as we have known it in the past, is becoming disconnected to the way our countries ‘retirees’ are wanting to live their lives. David Kennedy, a Financial Adviser, has written a book encouraging those soon-to-be retirees to ’embrace the pursuit of meaning, purpose and prosperity’ when it comes to mapping out their financial future. The book is called “The end of the retirement age” and it speaks to a global phenomenon shifting the world of retirement.
There are several factors at play impacting the way retirees are planning their ideal retirement.
According to the Australian Bureau of Statistics, just over 45 years ago (1971), life expectancy at birth in Australia was 74.8 years for females and 68.3 years for males. Women born in 2013 can expect to live to 84.5, men 80.4. The 2015 Intergenerational Report also found that in 2054-55, life expectancy at birth is projected to be 96.6 years for women and 95.1 years for men.
Retiring at 65 for a person born in 1971 meant another 3.3 years of living for a man and 9.8 years for a woman. Fast-forward another 36 years from today, and that retirement period extends to 30.1 years for males and 31.6 years for females.
These trends affect us all deeply on a personal level. We need to prepare ourselves for this phase of life, financially and emotionally. “They” say boredom is the fastest killer. If we are to live longer, how will we pass that time? The trends also have broader societal impacts. The 2015 Intergenerational Report found the number of Australians aged 65 and over is projected to more than double by 2054-55, with 1 in 1,000 people projected to be aged over 100. In 1975, this was 1 in 10,000. If more of our living community members are past ‘retirement’ age, what does that mean for our society, economy, family?
Of course, the longer you live, the more you will need to have saved before you officially pull the pin on work. But the trends suggest there is more to this than just money…
As life expectancy increases, so to do the number of years we have good health. As we near our 60’s we just feel better than our parents did. We have more energy, physical wellbeing and stamina. But this doesn’t mean we are necessarily keen to continue to punch the same clock we have been routinely attending each weekday.
Many are seeing this phase of life as a chance to either branch away from what they have known to a path that is more personally fulfilling, or to leverage the years of wisdom acquired into a venture of their own. Whilst they are wanting to work longer, they are wanting to do so on their own terms, with greater flexibility.
Senior entrepreneurs are our fastest growing segment of new business start-ups according to research conducted by the Swinburne University of Technology and Queensland University of Technology. It is an opportunity to leverage a lifetimes career or experiences, and with experience comes knowledge & skills along with patience, communication skills, access to networks and ability to source and leverage resources. There are barriers (ageism, holding a comfortable job, lack of business skills/education for entrepreneurship) that need to be overcome. But increasingly, our ‘pre-retirees’ are swapping their day jobs for their own businesses.
And it is a global trend. According to Ewing Marion Kauggman FoundationKauggman Foundation, nearly 25% of new businesses in the US in 2013 were started by ‘Seniorpreneurs’ (aged 55 to 64). That is more than those in the 20’s or 30’s.
With 2-3 decades of life past 65 ahead of you, how do you want to fill your time? What will get you out of bed each day? What activity do you want to fill your lives with?
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