From the US, findings in a ‘New Retirement Survey’ from Merrill-Lynch (ML), indicate that many baby boomers (those people of around 65 years, conceived and born in the immediate post World War 2 years) and who are defined as affluent, plan to keep working and earning money during their retirement years. Planned alternate periods of work and leisure indicate significant changes from the tradition of pursuing a retirement of well-earned leisure.
The Merrill Lynch survey findings may prompt similar conclusions in the UK, as both nations have the affluent baby-boomer experience in similar circumstances, so what are the key conclusions we in the UK should take note of?
As a result of living longer, baby boomers plan to be “younger” longer and to work longer. Most baby boomers who responded to the US survey (65%) will stop working for pay and retire in the traditional sense at some point. However, that phase is more likely to begin in the late 60′s than at age 60. While 76% of baby boomers intend to keep working and earning in retirement, on average they expect to “retire” from their current work at around age 64, and then launch into an entirely new job or career.
When asked about their ideal work arrangement in retirement, the most common choices among baby boomers in the US survey would be to:
- Repeatedly “cycle” between periods of work and leisure (42%)
- Have part-time work (16%)
- Start their own business (13%)
- Work full time (6%)
Furthermore, only 17% of the baby boomers in the survey reported that they hope to never work for pay again!
It doesn’t appear, however, to be about the money. While 37% of the baby boomers in the US survey indicate that continued earnings is a very important part of the reason they intend to keep working, 67% assert that continued mental stimulation and challenge is what will motivate them to stay in the game.
The unpredictable cost of illness and healthcare is by far the US baby boomers’ biggest fear. They are three times more worried about a major illness (48%), their ability to pay for healthcare (53%) or winding up in a nursing home (48%) than about dying (17%).
US baby boomer men are looking forward to working less, relaxing more and spending more time with their spouse. Baby boomer women, however, view the dual liberations of empty nesting and retirement as providing new opportunities for career development, community involvement and continued personal growth.
Accumulating the resources, affluent baby boomers list the need for retirement freedom (81%), rather than age (56%) or any other variable as the most decisive factor for when they choose to retire. Recognizing the growing uncertainty of the future economy and government provision, baby boomers who have a plan and feel prepared, are twice as optimistic and far less fearful compared with those who do not.
So do we in the UK echo the US findings in our aspirations and intentions?
Expert advice on investment and pensions.Mr P - Solihull