One hundred year ago, the concept of retirement did not exist. We started working at the age of 15 (usually at a job that required physical labour) and we statistically died at 47 years of age. As jobs changed, life expectancy grew and social patterns developed, so did the concept of retirement. In fact, retirement is a relatively new concept. Since then retirement has changed a lot and change will likely continue. Here are some of the new retirement trends we recognize for today and tomorrow:
- Definition of retirement. When you talk about trends, the place to start is clearly the definition of retirement is changing. At one time, retirement was about a time to relax and take it easy. If you think about retirement 30 years ago, we worked till age 65 and then we statistically dies at age 70 to 72. Retirement was a very short period in ‘old age’. The retiree today is younger, healthier, fitter and sharper. As a result, retirement is about life and living and keeping busy. It’s about staying active and having fun. Today’s retiree is not only younger in age but also younger in heart! The retiree today is busier than we have ever seen. I’m sure you know these people. They are busier in retirement than they were before retirement. Not only are they busier but happier too . . . doing things on their terms and on their schedule.
- Retirement is not about stopping to work. In my opinion, the biggest future trend in retirement is that you will see more people working in retirement. The difference is that people will work doing what they love and not what they have to do. In fact we are seeing it today. I know a 61 year old gentleman who is working at the local Home Depot store part time, not because he needs the money but because he loves the interaction with people. I know retirees who have retired from large organizations like Telus only to go back and continue to do part time consulting projects working on their terms instead of someone else’s. I know other retirees who have turned their lifetime hobbies into businesses enjoying a little extra income at what they love to do with their time. Retirement today and tomorrow will be full of these types of examples where more and more retirees will work in retirement.
- Phased retirement. Traditionally retirement happened on a specific date. For my father retirement happened on XXX, XXX. Retirement was about one day working and the next day relaxing. When the baby boomers start to retire, employers are going to need to get more creative about how this transition is going to happen. There is a risk that because of the demographic bulge, there will not be enough people underneath to replace all the boomers that want to retire. As a result, you may see a concept called phased retirement where instead of retirement being a point in time, it will be phased over a period of time. You might see someone going from full time, five days a week to 3 days per week to 1 day per week to a full retirement. You may see more job sharing in the future. Whatever the case, retirement is not likely to always be a cold turkey event.
- Long term care planning. According to Patricia Randall, author of The Care Years, “Long term Care Planning is an essential component to a retirement plan. In fact, if you do not incorporate care planning into your retirement plans, then you are missing out on one of the biggest financial issues that most Canadians will have to face in retirement.” People are living longer but along with that comes the increasing likelihood that you will be exposed to illness or injury. Make sure you take the time to plan properly in case you become dependent and need care.
- Lifestyle retirement planning. When most people think about retirement planning, they think about money and more specifically, they think about how much is enough. Although money is important, retirement is about more than just money. I know people who have enough money for retirement but they still aren’t happy. Today, retirement is about being happy. In many cases, more money can mean more happiness but not always. Today, people planning for retirement need to think differently. They need to think about life and what life means to them in retirement. It’s about soul searching and determining what is most important to you. When thinking about retirement you need to think about what you are going to do with your time, how you are going to maintain your health and who is going to be part of your retirement in terms of friends, family and other social groups. Money is important but money is less important if you do not have your health, your friends, your family and all the things that give you pleasures in life.
As you can see, retirement is changing right in front of our eyes. Retirement is busier and full of more choice. Your success at retirement is really dependent on you and the choices you make. Studies have shown that the more you plan and think ahead, the more likely you are to enjoy a happy retirement. After all, retirement is supposed to be the Golden years and the Best years of your life. Only you have the power to make it happen.
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