What is “retirement” anyway?

September 19, 2017

In the past, there was a fairly consistent view of what retirement meant. On the last day of your “job for life” job, you shake hands with the boss and spend the rest of your years playing golf/going on cruises/growing old disgracefully. Whatever floats your boat.

But this concept of “retirement” is fast becoming a thing of the past. It’s unlikely to ever be as cut and dried again.

People are living longer. But people are saving less for their retirements. It’s not hard to spot the big flaw here. The end result is that people are having to work for longer.

So, if retirement’s not an option…what then?

The pursuit of happiness (and its risks…)

Life’s been pretty tough for many people in recent years. House prices have gone through the roof making the first step onto the property ladder seem unattainable. Wages aren’t keeping up with the cost of living. Lives seem to be getting busier and busier.

And with no promise of a shiny retirement on the horizon, some people are taking a different view. They don’t want to be working for years in a job they don’t very much like. Instead, it’s become rather fashionable to make a living doing something that makes you happy instead. You might make less money, but life is sweet. For now.

Perhaps job satisfaction is becoming more important because the duration of our working lives is increasing? It’s the old “work to live, not live to work” adage. If we’re not going to be able to afford 20 years of luxury when we “retire”, why not enjoy the journey? You could even take “mini retirements” along the way to do a bit of travelling or learn a new skill.

It certainly sounds like a much nicer way to spend your life. But…

… We feel it’s our duty to come and crash the party. Just a little bit.

In the quest for a more fulfilled life, perhaps people aren’t paying as much attention to their finances as they should? Money can’t buy happiness. We know that. But it can make life easier.

It’s hard to make decisions about managing your long-term finances. Especially when you’re not convinced you’ll ever have enough money to really manage.

But. What if you’re not well enough to work into your latter years? What if you are forced to retire because you can no longer work? The chances of the state being able to support you with “social care” enough to cover more than your very basic needs is looking pretty slim. What if you need to get a job but no one wants to employ you because they think you’re too old? What if robots take all the work?

What if you change your mind and think, actually, you would like to give up work when you reach 70? You could still have another 20 or 30 years ahead of you. You’ll need to support yourself financially somehow.

How to get the “retirement” you want

By all means, go out there and find a job you love. Enjoy the here and now. Get used to the idea of working into your dotage. But please, don’t forget to save along the way. You’re probably going to need it at some point.

The challenge is how to find a way to live your life in a meaningful way. And take responsibility for financing it until you check out.

The ever-changing goal posts of the dwindling state pension mean you simply can’t rely on that. You probably can’t rely on just a great pension from your employer either. You never quite know how long you’ll be able to rely on a monthly wage for. And relying on that lottery win is not what we’d call a solid plan. So, you have to sort things out for yourself.

And start sorting them out now. The sooner you face up to the facts, the better!

Our advice is to start small. Get some financial planning steps in place. There’s no longer a “one size fits all” approach. With more choice, comes more complexity. So asking for some professional help will more than pay for itself in the long run (we’re here!).

The key for most people these days is to have flexible retirement savings. Savings that you can dip into when you need to. This might mean a wider range of savings types – like ISAs and shares – not just a pension (although you should probably have one of those too).

A study conducted by Scottish Widows for Mental Health Awareness Week earlier this year revealed that three in 10 people surveyed said just thinking about retirement makes them stressed. Failing to plan for the future can have a big psychological impact.

So really, doing a bit of financial planning now is just another positive step in your pursuit of happiness! Give us a ring, pop into the office, then skip back out again knowing you’re on the right track.