Giving up the 9-to-5 doesn’t necessarily mean stopping work. Many people are now considering staggered or flexible working. It can suit some individuals who have caring responsibilities or health issues, or those thinking about retiring in the next few years.
When you picture yourself in your golden years, are you
sitting on a beach, hitting the golf course or working behind a desk? For many
people of retirement age, continuing to work makes perfect sense.
Unsettling Period
Several decades ago, working and retirement were binary
terms, with little overlap. People were either working (and under the age of
65) or had reached the age of 65 and were retired. That’s no longer true,
however, as staggered retirement is becoming more popular and more common.
Few people benefit from the sudden transition from working
five days a week to suddenly not working at all. Retirement can often be an unsettling
period, and it’s not surprising given that the most common path into retirement
is to go ‘cold turkey’ and simply stop working.
Pension Pot
New research has highlighted the fact that fewer people are
deciding against completely stopping working and are opting for a staggered and
more flexible retirement and working part time [1]. Nearly one on three (32%)
pensioners in their 60s and 16% of over-70s have left their pensions untouched.
Of those who haven’t accessed their pension pot, nearly half
(48%) of those in their 60s, and 24% of over-70s, say it is because they are
still working. With people living longer, and the added prospect of health care
costs in later life, retirees increasingly understand the benefits of having a
larger pension pot in later life.
Of course, retirees who haven’t accessed their pension pot
must have alternative sources of income. When asked about their income, nearly half
(47%) said they take an income from cash savings, others rely on their spouse
or partner’s income (35%) or the State Pension (22%), while 12% rely on income
from property investments.
Good Health
This trend for staggered retirements offers many financial
and health benefits. It is often taken for granted, but continued good health is
one of the best financial assets people can have. The benefits of working –
such as remaining physically active and continued social interaction – can make
a big difference to people’s mental well-being and overall health in
retirement.
People are increasingly making alternative choices about
retirement to ensure that they do not run out of money, but it’s also really important
to make pension savings work past retirement age so as not to miss out on the ability
to generate growth above inflation for when there is the requirement to start
drawing a pension.
Looking for Interconnected Retirement Planning?
The retirement journey opens the door to interconnected
retirement planning rather than product-based solutions. Put simply, in order
to get the best outcomes, it is necessary to have a retirement strategy to give
you choices and greater flexibility. If you would like to discuss your
retirement plans, we’re here to help.
Source data:
[1] Research from LV survey of more than 1,000 adults aged
over 50 with defined contributions