Traditionally, it has been viewed that retirement is when you pull up stumps and walk away from work to never return again, giving you more than 40 extra hours a week at your complete disposal.
Like many of my clients, I share the same view of fearing retirement. The thought of getting up every day with nothing to go to scares them. “What the hell would I do?” is a very common response. My thoughts exactly. How would I fill my days in? Play golf five days a week? Please, that would send me crazy.
How does the Gen X and Y perception of retirement differ from the traditional means of retirement?
One major difference is their view on longevity in the workforce.
They are setting out to design their future with the end goal in focus, like traditional retirement, but with a very different outcome. The outcome for most of them is lifestyle. They want flexibility in their work i.e. maybe three days a week for 40 weeks a year from the age of 55, and this to continue for many years even up to 75.
They understand it would be unlikely that they will have the funds to retire at age 55 and walk away from the workforce entirely, but they don’t want to be walking away entirely either. They want a balance in their lifestyle.
They have more time for exercising, hobbies, family and friends, classes in cooking or languages, travelling or however they choose to spend those extra hours a week.
It is well known that Gen X and Y are more likely to change careers than any previous generation and this works perfectly in their favour for the future. You may currently be a tradie on the tools thinking, “How the hell I can do this until I am 70?” You are right, you probably can’t. But we have the power and the ability to manoeuvre around industries easier than ever.
The other thought is, “Will your industry even exist in 20 to 30 years’ time?”. No idea. Will my industry be around in 20 years’ time? No idea. Fast-paced changes are coming at the moment, so it may well not exist if artificial intelligence continues on its path.
More and more, I am seeing that people are willing to forego money in the pursuit of lifestyle and balance. I think this is wonderful. Who would have thought that people are happier when they are earning less?
Many of these people have goals of spending more time with their children and grandchildren, getting involved in charity work and giving back to the community. They get a sense of satisfaction from these types of goals that money cannot buy.
I believe this path that many people are taking is incredibly empowering for them and the people around them. Yes, they will have a longer career in the workforce, but they are having happier and more fulfilled lives. What a great outcome for them and society as a whole.
Tom Momsen is a financial planner for Armcrest Financial Advice, based in Newcastle.
I suspect that many baby boomers (like me) have those same thoughts about retirement and have done so for maybe the past 10-15 years. It’s not a gen X or Y thing at all – it’s just common sense.
I’m early 60s and in financial services (adviser) and will work until age 70-75 quite happily, albeit gradually winding down to 2-3 days per week, or even less. I already work my own hours (4-8 per day; 3-5 days per week) and being self-employed was always a large part of my lifestyle as well as retirement planning choice. I don’t have a boss. I have over 100 bosses! But they are very kind and are happy as long as I do what they need me to do for them – not minding if I take time off for a few weeks of travel, or just going for a few days’ break.. because it doesn’t affect them. Because my business is about communication it is mobile/portable and scalable.
The ideal lead-up to retirement always involves a taper rather than a cliff. I’ve always counselled my clients to reduce their hours with the consent of their employer rather than just pull up stumps. It was a rare period (that we have nearly all worked through, about 10-15 years ago) where the 55 year olds (plus) decided to retire abruptly from one day to the next – because they could – and most of us would agree that was a mistake. Many are now reliant on Age Pensions and probably regret their decision.
In my view only those who were doing hard manual labour would be better retiring earlier than age 60 as most people need an occupation and interest (not to mention some income!) beyond age 65. The next policy move may well be that the age at which super becomes universally accessible moves up in line with the Age Pension age. That would make sense, but would need to take account of those whose work was more physical than mental, who would always need earlier access. They probably should get earlier access to the Age Pension too!
I agree with all that you say. It is not until you become older (I am early 60s) that you realise that you cannot stand for most of the day (plantar fasciitis), you are always tired (blood pressure, thyroid issues) and so on. This very much depends on health and the type of work you have been doing. I was a teacher, and I am surprised to tell you that a little boredom is a wonderful thing.