Retirement might mean stopping the 9-to-5, but it does not have to mean giving up on work these days. With many people gaining the taste for flexible working during the pandemic, the freedom to work how and when you like suits those who may have caring responsibilities or even health issues, whilst giving those considering retirement in the next few years, more options.
When you picture yourself in your golden years, are you sitting on a beach, hitting the golf course, or working behind a desk? For many people, a mixture of all of the above is the best alternative, often finding that they enjoy work far more without all the pressure.
Working in retirement several decades ago was a binary term, with little overlap. People were either working under age 65, or they had reached age 65 and were retired. However, few people benefit from the sudden transition from working five days a week to suddenly not working at all and this can often make it an unsettling period.
New research has highlighted the fact that fewer people are stopping work completely and are instead opting for a staggered, more flexible retirement by working part-time. In fact, nearly one-third of pensioners in their 60’s and about 20% of over-70s have left their pensions untouched. Of those in their 60’s who have not accessed their pension pot, nearly half say it is because they are still working.
With people living longer and the prospect of additional healthcare costs, retirees are increasingly choosing to have a larger pension pot for later in life. Many people are also choosing to use alternative sources of income, with half saying that they take income from cash savings or by relying on their spouse or partner’s income or the state pension. A staggered retirement also enables people to draw their income in the most tax-effective way.
The benefits of working and remaining physically active, with continued social interaction, can also make a big difference to mental well-being and overall health in retirement. With the prospect of many people living as long in retirement as they worked, it becomes ever more important to maintain quality of life and not just the monetary aspect.
Retirement has often been called the longest holiday of your life. Partial, or phased retirement, can form an important bridge between someone’s working life and the next stage of their life, so it is important to discuss all the alternatives before making a once-in-a-lifetime decision that you might come to regret.
At Foresight, we are experts at listening to our clients, finding out what really makes them tick, and helping them make the right decisions that will affect the rest of their lives.
If you would like to discuss your plans for retirement then please get in touch with us, and one of our Wealth Strategists would be pleased to run through your retirement options with you.