The Changing Face of Retirement

Insight | by Stephen Kiggins
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The sad passing of Queen Elizabeth II this month means that Charles, formerly the Prince of Wales, now finally begins the job he’s spent his life preparing for: he becomes King Charles III at the grand age of 73.

At a stage in life when most people are well into retirement, King Charles is just beginning one of the most prestigious jobs in the world. However, he’s not the only one for whom retirement looks very different. Over the course of the Queen’s reign the traditional notion of retirement has changed for us all.

In this article, we take a look at the history of retirement, how it’s changed, and what this means from a financial perspective. Read on to find out how Forth Capital can help you navigate the changing landscape of retirement and ensure you have the plan in place that works for your future.

The old view of retirement

The concept of retirement can be traced back to German Chancellor Otto von Bismarck who, at the end of the 19th century, proposed the idea that those unable to work any longer due to old age should be provided with financial support from the state. During the Industrial Revolution, when most work was hard, physical labour in factories, this made sense.

Workers who had put their bodies through so much, day after day, for decades on end, were bound to welcome the prospect of being able to stop at a certain point; employers were able to move their less efficient employees on; and the young and fit could gain employment in their place.

Then, as societies shifted from industrial economies to those based more on technology and information, the nature of working life changed from factory floors to the office; yet the old, traditional view of retirement persisted. You worked as hard as possible for 40 years or so until you reached the Big Finish Line of Retirement. After collecting your gold watch and hanging your briefcase up for the last time, you donned a pipe and slippers to watch TV, with perhaps the occasional round of golf on the side.

The dividing line between working life and retirement was a stark one.

But that has all changed.

The new face of retirement

Retirement has evolved into a completely different prospect. For a start, people are living longer, healthier lives. A generation ago, men could expect to live up to their late sixties, while for women it was their mid-seventies. Since then, the life expectancy has improved incrementally. The current life expectancy for men and women in the UK is 79 and 83 respectively.

This means they have more to offer, more time to plan for, and more opportunities than previous generations.

People now view retirement as a huge opportunity to reinvent themselves, to take on new challenges, learn new skills, and enjoy far more than just a life of leisure.

Some people take up part-time work doing something completely different to their previous careers. Others even start their own business, eventually realising a dream that their busy life simply got in the way of.

The pipe-and-slippers image of retirement simply no longer fits.

This comes with health and wellbeing benefits too

As appealing as it seems at first glance, the old view of retirement actually led to some negative impacts on people’s health. For example, a study by the Harvard School of Public Health found that people were 40% more likely than those who kept working to suffer heart attacks or strokes in the first year after retiring. And the effects weren’t just physical, with depression also being more common in those who retired.

Rather than losing social connections with ex-colleagues, becoming less active, and losing the thing which gives purpose and routine to daily life, people are now developing new networks of friends and colleagues, getting involved in more activities, and working towards new goals. This new approach is far more likely to allow people to lead healthy, happy, and fulfilling lives.

However, having more opportunities during retirement comes with additional financial considerations.

Financial planning for a new age of retirement

The upshot of this new approach from a financial perspective is that retirement can be a far more varied, flexible experience than before. But this means that you need a more flexible and sophisticated way of planning for it financially.

The good news is that, whether you retire in the UK or abroad, there are numerous options to choose how to fund your retirement. Each comes with its own considerations in terms of tax and currency implications, the timing and planning of your income from the pension, and ensuring that your family/beneficiaries can also benefit from the assets after your death.

Key Considerations

The key questions you need to ask yourself are; When and where do I want to retire? How many pensions do I have from all my previous employments and what are their respective values (and charges)? How much income do I want to take from my pension and how sustainable will that be? Will my family benefit from my pension assets after I’m gone? If I decide to retire abroad, are there schemes that will deliver better outcomes for me than leaving my pensions in the UK?

This is where it’s crucial to involve an adviser who can help to guide you and create the right solution – the ‘best of breed’ retirement plan – from the options available, wherever in the world you choose to retire.

Working with a qualified financial adviser long-term has other benefits too. As the world changes with increasing rapidity, and retirement offers a host of new opportunities and challenges, having someone who knows your history and circumstances, and can adapt your plans without starting from scratch, provides an invaluable source of stability.

The good news is there are more opportunities than ever before. While the potential benefits are undoubted, for the new approach to retirement to be a success for you, you need the right financial planning and personalised flexibility – which is exactly what you will get with Forth Capital.

Whether you’re looking to start a new business, retire abroad or return to the UK if you’re already overseas, we can help you plan a retirement that suits you.

To have an initial exploratory conversation with one of our dual-qualified advisers, contact us today.

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