How to rethink your retirement and take advantage of your prime time

How to rethink your retirement and take advantage of your prime time

Where does the concept of retirement come from? At times it can seem like your whole life is geared towards it. Government policy in all countries can hinge on it. It seems retirement has been with us for all of time.

When did the notion of retirement begin?

Although the notion of retirement for those in the military began in Roman times, retirement as a mainstay for all is relatively recent. Otto von Bismarck started it in 1883 as a response to the rising polarity of Marxism. Prior to this, people typically died long before any thoughts of retirement, usually between the ages of 26 and 40.

In 1905 William Osler, one of the founding fathers of the John Hopkins Hospital in Maryland, said that the years between 15 and 40 were the “15 golden years of plenty”. He went on to assert that between 40 and 60 you were tolerable because you were “merely uncreative”, and after 60 the average worker was “useless and should be put out to pasture”. Nice. Luckily, over the last 115 years or so, things have changed.

That said, this is not what defines the word ‘retirement’. It comes from the French retirer – to withdraw. Related words in the dictionary include ‘fallback’, ‘desolation’, ‘solitude’, ‘aloneness’ and ‘detachment’. The company that ‘retirement’ keeps doesn’t paint an inspirational picture for the time of life when your experiences, knowledge and expertise are likely at their peaks.

Nowadays, retirement starts when your state pension begins, at least if you want discounted entry to a range of UK venues. In most countries, this is age 65, although it is being pushed back almost everywhere.

However, drawing your state pension doesn’t mean leaving the world of employment or usefulness.

For some, the idea of a ‘hard-stop’ retirement is a dream come true. One day you’re Joe or Jane the CEO, or a manager or creative director, and the next you’re a lord or lady of leisure. Retirement could be the never-ending holiday you’ve always dreamed of.

For some, though, a hard-stop retirement can induce a feeling of loss and shock. If you loved your vocation, leaving it can feel like a type of bereavement.

It’s understandable. From the age of around 21 or even earlier you spend your time working. It defines who you are. Who are you without your vocation? No wonder it seems strange when, on your 65th birthday, life as you know it stops. Recent studies have shown that retirement increases the chances of suffering from clinical depression by 40%.

If this sounds like you, then you need to redefine retirement. You need to reform it in your own image and do away with any preconceived ideas of what retirement means. Ask yourself what you want. Perhaps you never want to retire. You may not want to work full-time, but you just can’t see yourself doing nothing for the best part of thirty more years.

At the age of 60, the Japanese celebrate Kanreki: the age of rebirth. Could you recreate yourself? Are you now the authority in your field? Could you mentor? Is there anything you would like to learn?

Primetime

Primetime is when the best stuff happens when the drudgery of daytime TV turns to peak quality content. This can be your own metamorphosis, shedding your old self for your new adventure.

“A new period or time of youthfulness; the beginning of something”.

wiktionary.org

Some of the most successful entrepreneurs started relatively late in life. Ferdinand Porsche founded his company at the age of 56. Similarly, at the age of 61 Charles Flint formed the Computer Tabulating Recording Company which would later become IBM (although he did eventually retire at the age of 80).

Other late starters include Harlan ‘Colonel’ Sanders, who was 66 when he started KFC, and Morgan Freeman, who only became an international star at the age of 52 after his role in 1989’s Glory. Meanwhile, Julia Child’s first book came out when she was 50, forming the beginning of her successful culinary career (she only learned to cook when she was 40).

Our blog Why so many are delaying retirement to become ‘olderpreneurs’ discusses the advantages of being an entrepreneur later in life.

Your retirement glide path

An aircraft’s line of descent to land, especially as indicated by ground radar. A series of events or actions leading smoothly to a particular outcome.

You could also just do retirement differently. You could take a mini-retirement (employer-permitting) to explore some of your ideas. Winding down gradually is a popular concept, with many choosing to work two or three days a week for a period before full retirement.

Staying on as a non-executive director is an option for others. This gives you the opportunity to use your skills, be looked up to for your input and doesn’t have to eat up valuable time.

You could use your skills as part of a community group, volunteer project or charity. Whether your main skills are financial, creative or advisory, most local projects would benefit from your expertise.

You could also find a retirement job – something less demanding but still interesting and possibly closer to home. Retrain, don’t retire.

Either way, if you’re looking forward to retirement, or are indecisive about it, you need a plan.

  • Where is your money coming from?
  • How will you bring in money, and how frequently?
  • Do you have enough to cover the basics and afford a comfortable lifestyle?
  • What if you have an emergency and need a lump sum of cash?
  • How do you fund your life when there are no more payslips?

You could spend at least a third of your life (0-30, 30-60, 60-90) in retirement and a large part of your working income goes towards saving for it. This is a lot of time working and saving, but perhaps not as much time planning for it. What if you have left it all a little late? Don’t worry; you can find some tips here.

Having a plan can help you to answer all these questions. Having your financial planner guide and counsel you through your options can give you the advantage of envisaging hundreds of different retirement scenarios. If you would like to discuss your retirement options with an experienced Chartered Financial Planner, contact Capital today.

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