How to quit the job market and strategies for early retirement are repeatedly making the headlines of late. But what if retirement isn’t all it’s made out to be. In this article I explore five reasons why we should never retire.
1. Financial
A few years back I ran the annual retirement planning programme for the university I worked for. The goal was to help those nearing retirement get the most out of the next stage in their life. The sessions were mostly focussed on lifestyle design but also included a session from a financial planning consultant. I remember on one of these courses we had a participant excitedly tell us in the morning that she was going to be retiring in six months. She had given notice to her line manager and the HR department and was now busy planning all the things that she wanted to do. It wasn’t until after the financial planning session that she realised she hadn’t given much thought to how she was going to fund her retirement. She had thought about the next couple of years but hadn’t really considered the longer term. She didn’t know how she was going to manage and by the end of the day she was seriously concerned. She’d only worked for the company for 6 years full time and so her small pension wasn’t going to stretch far.
Can we rely on the state pension?
The state pension age in the UK is currently 66 rising to 67 for those born on or after April 1960. The current State Pension is £203.85 per week. The actual amount you’ll receive is based on your National Insurance record and the full amount is only payable to those with 35 qualifying years. For those with between 10 and 35 qualifying years you’ll receive a proportionate amount. Is it possible to live off of this amount? Researchers at Loughborough University have created a set of retirement living standards which suggest that as a minimum to live in the UK in 2023 a single person will need an income of £20,500 and a pensioner couple would each need a pension income of £13,900 a year to reach the minimum standard of living. This minimum standard covers needs not wants and is based on what groups of people that participated in the research think we need to be part of society and to live with dignity in the UK today.
How can we plug the gap?
So, unless we have been fortunate to have built a sizeable pension pot to live comfortably, we need to think about how we are going to plug the gap. We may need to think about continuing to work if we are able to. Whilst some are ardently against the notion of working later, others are looking at different options.
Firstly, you don’t have to do what you’ve always done. How about trying something new? Something you’ve always fancied trying but you couldn’t afford to? Now that you have a pension back-up maybe you can experiment. See my article Ten side hustles you can do in retirement.
The great thing about working in later life when you have a pension is that you might be in a better position to work part time. You might explore self-employment as an option, short term contracts or freelancing. What’s going to work best for you and fit with the lifestyle that you are designing for your next chapter?
2. Social
From lunches with colleagues to company celebrations, water cooler chats and co-worker banter, social connections are a big part of our working lives. We saw this through the Covid era when HR departments were busy designing ‘virtual coffee mornings’, quizzes, lunchtime learning and various other initiatives designed to avoid us getting lonely and disconnected. It’s no surprise then that as we transition to retirement our social network size often changes.
Of course some of us need more interaction than others! Some of us can’t wait to exit the political landscape of the workplace. But work can bring us a sense of belonging, a space where we get to know a diverse range of people often bringing together several generations. No matter what our age work brings opportunities for networking and interactions that we might not otherwise experience. Working in teams and projects can be frustrating but working towards a common goal helps us to develop trust, rapport and common bonds.
Social capital is the term used to describe the intangible elements of human relations that arise through social activity and connectedness. Higher levels of workplace social capital are linked to lower levels of stress, lower levels of mental health problems like depression and anxiety and better health related behaviours. Having friends at work can improve wellness and a sense of community brings people of all backgrounds together. Volunteering can bring similar benefits.
I remember being invited to a two night residential trip to celebrate the success of a year long management development programme I had designed and delivered. Inwardly I groaned. Much as I liked my colleagues I wasn’t sure if I was ready to spend 48 hours with them. In actual fact, mixing with people beyond the corporate environment is great for learning about people beyond the role that they do and it was great fun. Many organisations provide opportunities for meals out, sports events, quizzes, competitions and much more. It is of course possible to replicate these connections and events beyond the workplace but we must do it intentionally.
3. Health
In the UK 1.4 million older people in the UK are often lonely. Loneliness is bad for our health. It is associated with experiencing depression and older people with a high degree of loneliness are twice as likely to develop Alzheimer’s disease as those with low degrees of loneliness. Despite the fact that retirement removes work related stress, losing our daily structure and our work relationships can be harmful to our health. Retirement is in fact ranked as the 10th most stressful life event. Research related to physical health provides a more complicated conclusion. It is unclear as as to whether physical health improvements can be explained by the elimination of adverse work, the reduction of physical and mental demands or by positive lifestyle changes. If we can incorporate a better balance of work and life then this can only be good news for our longer term health. Reducing our working hours can allow us more time to incorporate fitness routines into our daily activities.
4. Learning
The pace of change in organisational life requires us to continually adapt. Digital innovation is challenging all of us at an unprecedented pace. ChatGPT, a generative artificial intelligence tool is the fastest growing consumer application in history reaching 100 million users in just two months. Organisations offer a myriad of learning opportunities ranging from in-house development, mentoring, accredited qualifications, conferences, coaching, peer collaboration and self directed learning through platforms such as LinkedIn Learning, Coursera, Alison.com, etc. So, how are we going to keep up with developments in technology and societal change when we exit the labour market? It’s easy to stagnate very quickly and deciding to opt out is likely to have a detrimental effect on life generally.
Consider how digital trends have impacted banking services, the way we shop, the way in which we buy tickets, consume entertainment, etc. Lifelong learning provides us with opportunities to socialise and it stimulates our memory and ability to focus. Some form of work, whether paid or voluntary, will require ongoing skills and knowledge development that can only be good for our long term prosperity.
5. Purpose
One of the most frequently asked questions when we meet new people and join new groups is “what do you do?”. Our careers not only take up a significant part of our lives but also shape our identity. Work gives us a structure, a reason to get up in the morning. Last week a delivery driver knocked on my neighbour’s door just before lunchtime. After a long while the door opened and my neighbour appeared in his dressing gown. The driver apologised for getting my neighbour out of bed enquiring about his health. “Oh no, I’m not ill, I’m retired, he explained.” I don't have to get up now”.
So how can you find purpose in retirement? Firstly, what do we mean when we talk about purpose? A study published in JAMA Psychiatry defines purposefulness as “the extent to which people see their lives as having meaning, a sense of direction and goals”. They suggest that those of us who live purposefully have reduced stress levels and are in better health than those who don’t.
Finding our purpose might be determined by a long held passion we have. It could be spending more time with family or travelling or it might be broader in scope. It can include work in both a paid and voluntary capacity. For example, you might like to share your knowledge and skills with others through teaching, coaching or mentoring. This is sometimes referred to as self-transcendence, whereby we shift our focus from the self to others. It might be possible to turn your passion into a new business opportunity or perhaps you might like to work as a freelance consultant. The most important thing is to do work that is meaningful to you.
Summary
So maybe work, in some form, health depending, will actually be good for us after all. Having the opportunity to work part time, perhaps to change what we do and how we do it might prove to be invigorating. So there we have it, five reasons you should never retire!
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