Retirement Income Alliance

Preparing For Retirement

by Malcolm Small 11th April 2017

Recently, I’ve been engaged with looking at the run up to “retirement” in the conventional sense of stopping working. Whilst such an event may look like good news, I’m discovering that, for many people, it can be an almost distressing concept to deal with, thought of not with positive anticipation, but almost with fear. Yet it is hard for people, and perhaps especially for men, to admit to such thoughts and feelings; retirement is supposed to be something you eagerly anticipate, not something you secretly dread.

In my experience (admittedly limited so far) people in senior posts are particularly vulnerable. They have a mental “picture” of themselves which can make it hard to permit themselves to “let go” and to allow themselves to stop. For this reason, as well as many others, it is good to observe the increasing emergence of “pre-retirement” seminars for staff immediately approaching retirement. This service is increasingly provided as an employee benefit by more enlightened employers and can actively help staff think through what retirement will mean for them. This means in many cases creating a more holistic plan for later life, not just around money. I think there is also scope for one-to-one retirement “coaching” to emerge, to help deal with some of the emotional journey outlined above.

Of course for some it all looks good. Their pension and asset arrangements are sufficient for life; they have a wide range of interests to pursue; they and their partner are in good health and active; their mortgage is paid off and the children have long left home. But I suspect this is just a rosy dream for increasingly many people, and this is why planning ahead to put in place plans and strategies to cope is important.

Money planning is only one aspect of this process; an important part of course, but there are many other issues which will appear more significant to the individual. Some people I’ve encountered over the years simply have no idea how they will fill their days. Often, I’ve observed the changing dynamic between a couple as retirement comes. The stereotypical breadwinner is suddenly at home all day, alert for any opportunity to “visit the shops”, for example. His or her partner becomes increasingly resentful, feeling “clung” to, or suffocated as part of a, now retired, couple. Here again, there is a need for discussion, to really think through what a “retired” week typically looks like. This can be difficult, even painful. Perhaps it is no surprise that, against a generally declining divorce rate, the over-65s are the fastest increasing in divorce terms of any population cohort according to the Office for National Statistics.

But the same body also identifies the over-65s as the fastest increasing employment cohort, and this fact may provide some of the answer – consider NOT retiring, or at least not fully.

Research I’ve conducted through the Institute of Directors over the years has clearly indicated (admittedly amongst an entrepreneurial membership) a strong desire never to retire or at most only to gradually “scale back”, with eventual full retirement deferred until well into an individual’s 70s. This gives the “retiree” some kind of position within his or her industry and can provide valuable experience to any organisation willing to hire them. Some take on non-executive roles or act as consultants, others work on in a part-time capacity. As well as bringing in some extra income, it provides a focus and an excuse to “go to work”, even if that “work” is based in a home office at the bottom of the garden. The need for careful thought and planning for later life remains, of course, and for many, the options will necessarily be limited. But for increasing numbers, the answer to the retirement conundrum may be not to retire at all.