The changing face of retirement
21 Aug 2019
Technological advancements in modern medicine and other related fields, such as epigenetics, are profoundly impacting life expectancy. People now live longer than ever, which effectively means we will need greater financial security to fund a longer retirement.
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“The world's working population is living longer thanks to improvements in diet, healthcare plans and preventative medicine, despite the rise in obesity and prevalence of chronic conditions,” affirms Chris Hills, Chief Investment Officer at Investec Wealth & Investment UK.
Will your retirement equal the length of your career?
Financial planning and funding longer retirements
“Those in or approaching retirement will need to draw down from their savings for longer than previously thought, and that requirement will increase for those saving for their future retirement today.”
There are also practicalities to consider in supporting older generations for longer periods in relation to social grants and individual and group retirement products, suggests Phil Shaw, Chief Economist at Investec UK.
“When more people live longer, it places pressures on public finance and on a person’s own financial position. Funding retirement on that scale becomes a frightening proposition.”
Those in or approaching retirement will need to draw down from their savings for longer than previously thought, and that requirement will increase for those saving for their future retirement today.
Chris Hills, Chief Investment Officer at Investec Wealth & Investment UK
Traditional retirement vs life expectancy
As a possible solution, Shaw recommends extending working tenures into currently established retirement periods. “People could perhaps work part-time as they get older.”
It's time we retired the traditional concept of retirement.Haynes agrees, suggesting that people will have multiple careers after retirement. “Most people would rather work than remain idle for an extended retirement as they look to contribute and add value somewhere else in their life. As such, I believe it's time we retired the traditional concept of retirement.”
Annelise Peers, Chief Investment Officer at Investec Wealth & Investment, Switzerland, echoes these sentiments. “People are living healthier lives in retirement and enjoy better quality of life. They can, therefore, remain active, and with the ability to continue working on something you really enjoy, why would you retire? Personally, I don’t see myself retiring at 65.”
The value of passing knowledge on to younger generations
“These individuals can add so much value to the business, which is why we should look for ways to retain them beyond the de-facto retirement age.”
Shaw adds that while it may be difficult to practice a profession full time, it should be feasible for these individuals to mentor and pass on their knowledge to employees who are coming up the ranks.
We should look for ways to retain them beyond the de-facto retirement age.“This is a valuable way of leveraging and benefiting from the experience that resides within older generations in the workforce.”
About the author
Patrick writes and edits content for Investec Wealth & Investment, and Corporate and Institutional Banking, including editing the Daily View, Monthly View and One Magazine - an online publication for Investec's Wealth clients. Patrick was a financial journalist for many years for publications such as Financial Mail, Finweek and Business Report. He holds a BA and a PDM (Bus.Admin.) both from Wits University.