Why we suggest you don’t retire…yet

If you’ve not heard of Dr. Shigeaki Hinohara you’re not alone. The physician may be little-known outside his own country, but he is credited with building the foundations of Japanese medicine and helping to make Japan the world leader in longevity.

Hinohara lived until the ripe old age of 105 and, until a few months before his death, he continued to treat patients, kept an appointment book with space for five more years, and worked up to 18 hours a day.

The longevity expert had several basic guidelines for living a long, healthy life, and one of his most important was this:

Don’t retire.

Don’t retire is also something we at BlueSKY advocate. This may sound bizarre coming from a firm whose core function is to help people to plan for their retirement!

However, we believe that retirement is too often viewed as a panacea, or as a moment in someone’s life where they somehow become free of all worries and stress. Yet, a report for the Department for Work and Pensions found that 25% of retirees experience difficulties in retirement that resulted in adverse psychosocial outcomes.

Our own experiences with retiring clients are that there needs to be clear long-term plans and objectives for it to be the positive chapter in life that individuals are hoping for.

Why retirement is changing

So, what is retirement?

It is different things to different people. But a common consensus might be: ‘to be able to start doing what you have always wanted to do, rather than what you have had to do to make a living’.

Aviva reports that 50% of those approaching retirement are fearful of a ‘cliff-edge’ retirement; work one day and nothing the next.

But things might be changing. Aviva also report that over-50s are becoming more interested in transitioning into retirement. It seems that they recognise that phasing retirement can help to balance mental and physical health and wealth.

Fidelity International’s retirement report states that, on average, people expect to retire from their jobs at 66. However, 45% of them expect to continue to do some sort of work into their 70s.

Indeed, B&Q was the first employer amongst a growing number who target older people as employees. They report that they are productive, have great rapport with customers, and are conscientious and enthusiastic.

From the planning work that we do with our clients, what you do in later life is as much to do with your objectives, attitude and health as it is to do with the money that you have accumulated.  Wealth doesn’t necessarily allow your life to have meaning and happiness in retirement.

In 2018 the Global Retirement Reality Report concluded that the formula for retirement happiness could be distilled into three main factors:

  • Trust – Individuals need to trust the retirement system in terms of legislation, understanding and belief that the system will work for them. The provision of trusted advice an individual receives about how the retirement system can work for them is key.
  • Ownership – Beyond believing that the system works for them, individuals must understand and embrace their role within it. This doesn’t mean that they should understand the technical nuances or investment mechanics of their retirement plans, but that they understand and engage with the necessity to seek advice and take action.
  • Preparedness – Assuming that the above two factors are in place, then preparedness relates to whether the finances, attitudes and planning are in place to facilitate a successful and happy retirement. This is perhaps the area where professional guidance can add significant value.

Two types of professional guidance that are important

There are two types of professional guidance that we feel are important.

Firstly, our work with retirement coaches has helped clients explore and challenge their long-term retirement plans in non-financial terms. It’s a mental preparation that helps align thoughts and visualise the future.

Secondly, the work we do as financial planners analyses the financial decisions needed to achieve a client’s objectives in retirement. Are funds enough to last, and what can be done to improve a client’s position? How will the situation be monitored throughout retirement to ensure that plans stay on track?

Let’s roll back our initial statement. While we are not necessarily saying ‘don’t retire’, we are saying that, with increasing longevity, the ‘retiring’ chapter of your life might be the biggest one.

Continuing to work could be extremely beneficial. Planning how it could work best for you is vitally important from a financial, mental and health perspective.

Get in touch

A long and fulfilling retirement takes careful planning. To find out how we can help you achieve the lifestyle you want, please get in touch. Email info@blueskyifas.co.uk or call us on 01189 876655.