On the one hand we are fed images of grey haired tanned folks, sipping margaritas under palms reading classics or swinging at golf balls on pristine pieces of real estate. These retirees look like they are in the throes of ecstasy and life could not be better. On the other hand we have been scared witless by the financial advising community telling us that only 5 in 100 working individuals will be able to retire. We are told that we will be forced to continue working past 65, and this is a really bad fate to endure.
The scenario’s are at opposite ends of the spectrum, so which one should we believe?
Well unless you are one of the very small minority that saved for at least 25 years and earned a decent salary, the idyllic pictures we see of retirement are few and far between. However having lots of money is not the only contributor to a successful retirement. Lynda Smith, a certified life planner who works extensively with the Baby Boomer generation to help them ‘refire’, says one of the key factors to a successful retirement is the exact opposite of living a life of leisure. She says that many
executives lose their sense of purpose when they leave the working environment. Retirees, she says, simultaneously lose a community, status, and their reason for getting up in the morning. They can often sink into a deep state of depression and even get physically ill.
Smith says ‘Humans are hard wired to work, or at least to have a purpose; the phrase ‘dying of boredom’ does not come from no-where. The world has changed vastly since the industrial era when brawn ruled in the factories and workers were unquestioning drones. A set retirement age made sense when the industrial bosses needed strong fit people to keep fueling their factories, but this is no longer a requirement of the modern world of work. In late 1800’s a man was considered to have had a long life when he died at 46! Now a 46 year old is just warming up!
When the western world finally settled on the mandatory retirement age of 63, the average working male lived until he was 65-67. Now the average male can easily live to 78, and it’s increasing every year. Women are living even longer than that. This poses a huge dilemma, what are we going to do with the extra 20 to 25 years of our lives? And more importantly, how are we going to fund these extra years?
This leads us to the other aspect of retirement, the not so pleasant, underfunded part. Most people do not have enough for 5 years in retirement let alone 25 years. There are many reasons for this but we can examine them until the cows come home but it will not change the situation for people who are in this position. We need solutions.
So we know that we are a tad short when it comes to funding our retirement, that’s the bad news, but the good news is that we do not have to retire at 65. Why would we want to anyway? We can only sip so many martinis and endure so many daytime soapies. In fact 60 is the new 40, we are fitter and healthier than we have ever been and if we enjoy our work we should keep working, and if we hate out jobs it’s time to ‘refire’as Lynda puts it. Many people are looking for new careers as they reach retirement age, not only for money but for personal satisfaction. This relieves an awful lot of pressure on our retirement funding. If we can delay drawing from pensions for 5 to ten years it could solve some major head- aches.
Let’s say for example you are 65 years old and you have R1,5 million invested with no debt and your doctor tells you are in great shape and should live for at least another 20 years. If you could leave that money invested for an extra 5 years earning a real return of 5% (after inflation) it would grow to R1.9 million. If you could keep contributing to the fund it would look even more impressive. If you could leave the funds untouched for a further 5 years your coffers will grow to R2.4 million.
So if you are heading towards retirement with fear and trepidation reassess your career, if you hate hat you are doing find something that you enjoy and move into the role gradually while working in your existing career. If you need help have a look at www.refirementnetwork.com or get yourself a copy of Mitch Anthony’s book called The New Retirementality . This information will lift a huge weight off your shoulders. There is no good reason why we should stop working because of some arbitrary age restriction that was set over 100 years ago. The world of work has changed and so