A dictionary definition of retirement is: “The action, or fact, of leaving one's job and ceasing to work.”
However, I wonder how many people think like that anymore as they approach what we would regard as a normal retirement age?
The concept of retirement at 65 was first introduced as a welfare benefit by Otto von Bismarck in 1881.
It was clearly not expected to cost very much as very few people lived to that age. Since then, the age of 65 has become entrenched as a Western World retirement age, resulting in a binary attitude to an adult life of either being in work, or being retired.
However, we all recognise that this does not begin to reflect the realities of today’s world. Not only are we living longer, thanks to better healthcare, food and lifestyle, we are also living more active lives for longer.
This presents society with some big challenges, of which (excepting health) the most important one is finance. The concept of retirement at 65 can only work if you can be confident of supporting yourself and your spouse until death.
Apart from a rapidly diminishing number of people who are fortunate enough to be in generous defined benefit pension schemes, many of which are bankrupting the businesses behind them, the only others in this very privileged position are employees of the State.
Politics makes it difficult for governments to address this issue as they are faced with increasingly unrealistic expectations of an anchored retirement age against a lengthening life expectancy.
This is made even more difficult by the advances in healthcare that enable those in the latter stages of their life to survive for longer: the frailty brought on by natural aging will create an ever-greater need for care.
In this regard, I admit to feeling rather disappointed by some of my own generation, the so-called “baby-boomers”.
We have been particularly privileged, enjoying a benevolent welfare state, final salary pension schemes, a property market the likes of which is unlikely to be repeated, along with free higher education and a strongly rising stock market.
With such good fortune, we should have been able to prepare ourselves for the later stages of our life without burdening others.
Unfortunately, there is, from some but not all, a sense of entitlement that society should pay for pensions and care for anyone that wants it.
However, society is increasingly made up of younger people starting their working life burdened with student debt, greater in absolute terms, and much greater in nominal terms, than any of us faced with our first mortgage.
They are also expected to repay those loans at the age that most of us were entering the property market and starting a family.
