With people on average living longer, life after 50 is less likely to follow the traditional retirement path.
This could create an opportunity for financial advisers with retirement advice becoming an ever-vital part of financial planning.
A report from Aegon suggests a radical rethink is needed for the ‘unchartered territory’ of life after 50.
It highlights people are likely to see more of a ‘multi-staged’ life rather than the historic convention of education, work and retirement.
The Second 50: Navigating a multi-stage life report outlines how different life after 50 will be from previous generations.
It explores five areas of change such as work, wealth, family, health and wellbeing. There will be millions of combinations of how this will affect an individual’s journey.
Steven Cameron, pensions director at Aegon, said: “As we see record numbers of people in the UK celebrating their 100th birthday, we want to start a conversation about how varied people’s second 50 years may be and to help people better understand and navigate them. For many, seeking financial advice will be of particular value.”
The report finds past trends in retirement are no longer a reliable guide to the future.
While working into later life is often seen as a negative, Aegon’s findings reveal for most, the main reasons for doing so are positive among those over 60, and include an enjoyment of working life (57%) and keeping the mind sharp (54%).
Research finds only 27% of people currently in employment expect a ‘hard stop’ retirement, according to the report.
People aged 50 to 59 expect to spend almost a fifth (17%) of their later life in ill health, but only 25% have considered future social care expenses in their retirement savings plans.
Aegon calls for government, the pension industry and individuals to work together and create a landscape fit for purpose.
The report argues the more varied our second 50 years are, the greater the value of retirement advice.
Clients will need personalised help to plan for multiple stages of retirement, as well as unexpected life events such as social care in later life.
Aegon argues financial planning may require a more holistic approach, reflecting the interconnections with future transition from work, health, family and wellbeing.
Cameron added: “The second 50 is a new phase of life that is vastly different to the prospects our parents and grandparents had when they reached age 50. There are millions of combinations of circumstances and situations that people over 50 may find themselves living through at various times and in different orders, meaning everyone’s second 50 is truly unique.
“In fact, in many ways, it’s uncharted territory. We can no longer simply look to what’s gone before to know how to manage it on behalf of clients.”
Typically insightful, Steven! If you need a test case – of someone entering their ‘fourth 25 years’ and still getting a lot out of working, I’d be happy to volunteer! (And introduce you to a few more!)