Making the decision to retire is not always an easy one for many people. Any time in your late fifties, provided you have that asset base to provide for yourself and your dependants, may seem an ideal point for some. Others are more than happy to carry on into their seventies.
Business owners widely report themselves as not likely ever to retire, remaining fully engaged with their business into their eighties or nineties. We know future later lives are going to be different from the cliff edge retirements seen even 20 or less years ago, where one day you are at work, and the next sitting in an armchair at home.
Retirees today are fitter than previous generations and can expect much longer active lives. In some cases, they are also better provided for in terms of overall wealth and there is sense that we are seeing the wealthiest ever retiree, the baby boomers, going through to retirement now, although this by no means universal and will probably start to decline sharply for generation rent.
So, one of the answers to the question of when to retire might be 'as soon as you can afford to'.
In the case of a former colleague, that point came at the age of 48, when he and his wife sold their residential property in the UK and moved lock, stock and barrel to Spain, planning to live on the spare capital released by this exercise until his workplace and state pensions become available. He reported himself to be 'burned out' after a 20 year career in sales and 'in desperate need of a rest'.
I’m guessing that many of us will be familiar with that one, and envious of his decision. For others, it may not be a question of choice. Ill health can strike at any time, as can death. Over the past year, I’ve seen three good ex-colleagues pass on in their early sixties. By age 65, one in four of us will have a physical impairment which is life-limiting, and thus work-limiting, to say nothing of the rising tide of mental health issues among seniors.
While policymakers wish to raise retirement ages, and extend working lives, the relentless pace and pressures of modern internet-based lives can mean exhaustion and illness at ever younger ages. Anyone who knows what the teaching profession have to deal with these days cannot begin to imagine teaching at age 68, for example.
Wealth or health?
Someone else I know has just announced his retirement. He has successfully run his own business for years after an equally successful corporate career but is stepping down fully from his portfolio of roles when he could have carried into his early seventies at least.
In conversation, it turned out he’d recently had a couple of health scares, both of which were resolved, but he came to the realisation that he didn’t need to work from a financial point of view and that life, as he so eloquently put, is not a rehearsal. We all of us only get one shot at this, and we none of know how much time we have left on the face of this earth.
When it comes to the plans we all have for later life, the answer may well be 'do it now', not later, for later may never come. But to begin to answer my own question, I asked what had happened to make him come to this decision about when to retire, his response fascinated me. He said that it happened quite suddenly. He just had that voice in his head which quietly said 'now'.
Malcolm Small, Special Adviser, Retirement, Copia Capital