For a multitude of reasons, today’s retirement bears little resemblance to past generations. In the 1980s, most people retired at the age of 65 and lived comfortably on their pensions until they died at the age of 72, on average. The retirement environment is evolving, however, due to the distinctions in today’s retirement patterns.
The emergence of older entrepreneurs, a longer life expectancy, an increase in the number of older couples getting divorced later in life, an uncertain economy, and dispersed families, are 5 prominent factors that have had an influence on retirement today.
1. The Older Entrepreneur
According to the age support charity Age UK, the number of older entrepreneurs has increased by one-fifth in recent years, which is significantly higher than the self-employment rate across all other age bands. These older entrepreneurs are dominating the British business scene, and they don’t appear to be slowing down anytime soon.
In addition, compared to the 28% of small businesses started by young people, 70% of “olderpreneur” businesses survive past the first five years. This encouraging success rate may help to explain the rising percentage of elderly people engaging in entrepreneurial activity, which reached 7.1% last year, the highest recorded rate so far.
By 2030, it’s expected that 23% of the UK population will be over 60, a 250% increase.
2. Longer Life Expectancy
According to the ONS, the current life expectancy for the UK is 81.65 years, a 0.15% increase from 2021 and just over 10 years more than it was in the 1950’s. People are living longer, which suggests they must either delay retirement or make additional savings before leaving the workforce.
3. Silver splitters on the rise
The increase in so-called “grey divorces or silver splitters”, is another trend which is influencing modern retirement. The rate of late-life divorces has doubled in the last two decades.
As they approach retirement, a lot of older adults—especially women—find themselves alone. For older couples, divorce during the years leading up to or during retirement might render a previous, carefully thought-out financial strategy obsolete.
4. Bumps in the road
Retirement in today’s world may also be more financially precarious. The toll that the pandemic had on the global economy, as well as the ongoing war in Ukraine, has presented retirees with additional difficulties.
Over the past two years, interest rates, as well as food and oil prices, have skyrocketed. Even though we might see the economy finding its footing again, the financial losses that many older people have suffered might cause them to have to work longer than they had intended.
5. Global families
Older people must prepare financially for a retirement that may be without family members nearby to aid them, due to so many adult children leaving the house and city where they grew up, to pursue a career elsewhere. It is more crucial now than ever, for people to find senior living facilities that will suit their needs and pockets in the future.
At the end of the day, sound retirement planning has always been essential, but given the rapidly changing world we live in, it is even more vital to cover all your bases and ensure your future is what you want it to be, while you still have the means to.
Our advisers have years of experience investigating the best retirement solutions for our clients and will be happy to chat with you over a cup of coffee to allay any fears you may have and offer your invaluable guidance.