Pre-tirement – the new life phase.
Before pre-retirement. Once upon a time you worked hard and were looked after by your employer. In exchange for loyalty you reached 65 (if a man) and received a final party, gold watch or clock. And access to your index linked occupational pension and state pension. You were now retired, and could relax following a life of hard work.
But the story has changed.
The index linked pension days are over for most people and retirement age has changed. Most significantly for women. If a few years older their state pension would have started aged 60, it’s now matched with men, currently at 66. Many of us need more money, our pension pot won’t support us for 30 years or more.
But there are other changes too.
Back in 1962, life expectancy in the UK was 70.93 years, and by 2012 it had risen to 81.5 years. With 5-10 years left after working we were ready to rest but now? Do we want a conventional retirement?
In our 60s, many of us still have good health and we don’t feel old! We aren’t ready for a life time of leisure. Whilst this is true for many people in office based jobs, clearly if you have had a manual job you might be feeling your age and ready to stop. People such as postal workers, plumbers, and medical staff can be physically ready for a break. But this might not be a forever break. After a year or so you may be ready for something else, just not more of what went before. It could be volunteering or it could be back to work.
There are also family changes. With people having children later you could still be responsible for children well into your 60s so it’s essential to stay working.
If you are self-employed you may never have considered anything else
Many self-employed and freelancers have always assumed they will carry on working. They just never knew it was called pre-tirement. For some, their work can be their life. But for many they have chosen the freelance route to give them the flexibility to work as they travel. This could be something to aspire to. Have laptop and run a business from anywhere in the world.
Many of us want to stay working, but on our terms.
This could be a change of focus and to do something you really want, that you don’t find stressful or too physically demanding. Something you can still do even if you have a dodgy hip or the start of arthritis in your hand.
You may be ready for pre-tirement. A stage between full time work and a conventional retirement.
This period of pre-tirement can start in our 50s, or when you may have taken retirement. Pretirement is a flexible term. It’s a time to work less hours, but stay earning money. Whilst some will find the money essential, there are plenty more who don’t need the money. They work for other things – mental fulfilment, companionship, they still have plenty to give back.
If you love your job, and it’s something you can continue to do then stay with it. There’s no set retirement age any more so you can stay with your employer. Or if you have a long and stressful commute could you could move to a similar job but closer to home. Or if you don’t love your job move to something you would love.
It’s common in the media
We only need to look to people in the media to see people still working in their 70s and 80s.
For example: John Humphries, born in 1943 (73 years), Mary Berry, born in 1935 (82 years), and Warren Buffett born in 1930 (86 years). None of these are working for the money.
Now is the time for a phased approach to retirement.
A transition phase to pretirement that can last for 10 years or more. You are in charge.
Remember, do what you love and you’ll never have to work another day again.
Reviewing some research data (Zopa 2014, surveying 2000 people aged 50-80), 90% of 50-54 year olds have no clear date of when they will retire. 20% are planning to work beyond the state pension age. For some it will be about the money (17%) but for many more (27%) it’s because they want to keep their mind active.
Learning, not earning
You can still have an active brain, outside of work. You could take on a significant role with a voluntary organisation. Or study for a degree or PhD.
But so much of our identity is tied up with work and this could be the reason to stay in work. Plus, the money is important. You may be fortunate and not ‘need’ the money to pay the mortgage or bills. But that doesn’t mean you can’t find other ways to spend this money – either for family or charitable donations or to travel more.
The pre-tirement phase
The benefit of moving into the pre-tirement phase is to give you greater balance. You can continue to work, if you want, but it also gives you more time to focus on your health or your family or to give something back through volunteering.
Aged 50-75 you may decide to start a new career or you may prefer to transition to retirement through cutting back on your hours. 17% of over-65s are still in paid employment and 30% of them are in unpaid employment.
What we do will depend on different factors. It’s clearly easier to stay in work if you sit at your computer and work from home than if you have a physically active job as a plumber, postal worker or nurse. But you may be able to start a business working for yourself. Or support your partner as he or she continues with their career or income generation activity.
You could then move to a full retirement or stay in this pre-tirement phase for as long as you want.
The benefits of pretirement
- We can continue to add value to companies. 60-70 is no longer seen as old and past it. Yes, there is age discrimination and some over 50s find it hard to get a job. But this can be due to outdated job search techniques.
- I’ve worked with many clients aged 50+, like Ade who say he now has more than one job offer following a changed approach with an updated modern CV and a different approach to finding jobs.
- It’s likely to be helpful to the economy with changes in employee availability due to Brexit.
- Your brain stays active and you have a purpose. When I worked predominately with pensioners as a welfare officer, I’d visit them a few years after retirement and they had slipped into a life of watching TV. They had dramatically aged in just a few years.
- More time for other activity such as volunteering or looking after the grandchildren. Yes, you can do this with a conventional retirement, but we all know when we are busy we use our time more effectively, so your life could be work 3 days a week, a day volunteering and a day with the grandchildren.
- We have more control over our lives. Too often if you retire you spend more time than you want on child care duties, Grandad is always free. Fine if you want to do this, but not if it’s expected and you would rather do something else.
- We can choose how to transition.If you want to focus on voluntary work, that’s a great choice. You can still get fulfilment and a sense of purpose from volunteering, and there are plenty of things you can do beyond low skilled work. A lawyer can work for an advice centre, you can use your leadership skills within a charity, you can opt for VSO assignments. But you do need enough financial resources to make this happen.