What does retirement mean? Our Chairman, Ian Gooden, looks at how the whole concept of retirement is changing.

Almost 100 years ago – 1925 to be exact – the view was pretty clear. That’s when state pensions, as we know them today, came into existence. Means-tested pensions had been around since 1909 but this was when state pensions as we know them today became a reality.

Back then many jobs involved hard, physical labour. The NHS didn’t exist. Average life expectancy was about 58 years. So even to get to 65 you were beating the odds. Retirement then became date driven. You reached 65 and stopped. A reward almost for making the distance.

So much has changed since 1925

Life expectancy for a start. Today the average life expectancy is well past 80. So rather than retirement being a celebration of longevity it can now take up a quarter of your total life – or more.

Age discrimination legislation now means there’s no fixed retirement date for most people. You have more choice than ever about when to push the button. An interesting side effect of COVID was that 300,000 more people than expected decided to retire early.

State pensions, for the fortunate, are the icing on the retirement cake. Those born in the 50s and 60s often had final salary pension schemes. Those often made early retirement possible. And the more recent cap on total lifetime pension contributions meant others reached a point where putting off retirement made no sense.

So what does retirement look like now?

The big shift

Retirement used to be an event driven by a date. My grandfather knew he’d retire on 31 January 1966. The day he hit 65. My Dad expected to retire in September 1990. It was all so programmed.

Today I’d argue it is totally different. Individuals have a lot more options. However are they prepared for them?

The chat in the pub

The issue of retirement is a great one for a pub conversation. And one recently happened in our local. It started with a gloomy comment that “retirement is not what I expected”. Rather than a life of fun, it seems retirement can have its downsides.

Firstly, we were told, it is no fun being retired when all your mates are still at work. That cheap midweek golf membership that looked so attractive isn’t such fun when you realise you’ve no-one to play with.

“The worst decision I ever made” was another comment. What this individual hadn’t appreciated was how much he was defined by what he did. He got a buzz out of being an expert in his field. And that buzz had gone.

“I’d agree” added his partner. “He has no idea what to do with himself and I am fed up with him getting under my feet all day. I’m still working (from home) and he just interupts me all the time”.

What interested me was that the individual concerned didn’t feel like he could go back to his old employer and say “I made a mistake”.

“I love being retired” was an alternate view. “The day I retired I slammed the door shut on my past. I wouldn’t go back no matter what the offer was”.

Clearly this is a topic that divides opinion…

Is retirement right for you?

I guess that’s the big question. If my small “focus group” (aka the folks at the pub) are to be believed there’s no one simple answer. Instead there are a myriad of options to consider before deciding what does retirement looks like for you.

Is retirement good for employers?

That’s another question entirely. In a world where skill shortages abound, the idea of retaining workers who might otherwise retire has to be a strategy worth investigating. We know of businesses that have pools of retired ex-employees who they can call on for project work. Others use semi-retired staff as coaches and mentors for the next generations. Some would rather retain key workers part-time than see their skills exit the business permanently. Others just let people go. Accepting the inevitability that a date has been reached.

In today’s world Chiumento believes that retirement can mean a whole lot of different things. The key is working out the right solution for all parties.

So what now?

In my early career I was involved in organising “pre-retirement classes”. However they reflected the times. The fundamental assumption was employees will retire at 60 (women) or 65 (men). No grey areas- the date is the date.

So what does retirement planning look like today? In a series of upcoming articles I will flush out what I think retirement planning should look like in 2023. Using me – I’m 62 – as a guinea pig.

If you have ideas about what retirement means in 2023 then drop me a note. All views welcomed!