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The Future of Retirement?

Written by Nickel - 7 Comments

I recently ran across a report from the World Future Society detailing emerging trends that are shaping the world. In it, they argued that “the traditional age of retirement is losing it’s significance.” They went on to argue that:

People in the developed world are retiring well before 65. In fact, they cite data that less than 60% of people aged 54-60 in such countries had a job in 2004.

As of 2006, the average American planned to retire at 61, but… Actual retirement age averaged just under 58 years old.

Many of these retirements aren’t permanent. Americans in particular often return to work after retiring.

Paradoxically, 70% of American Baby Boomers plan to work into their 70s. Supposedly, this isn’t because they can’t afford to retire, but rather because they can’t stand to be healthy and inactive.

The upshot, they say, is that:

People increasingly will work at one career, “retire” for a while (perhaps to travel) when they can afford it, return to school, begin another career, and so on in endless variations. True retirement, a permanent end to work, will be delayed until very late in life.

So… People are leaving the workplace earlier than ever, but are ultimately returning to work well beyond traditional retirement age. I wonder how much of this is a byproduct of older workers being laid off and then having to scramble to find a new job, as opposed to people choosing to switch gears midstream.

Speaking for myself, I can definitely see the attraction of early retirement. That being said, I can also imagine getting restless, especially once our kids are grown. But it sure would be nice to have free rein over how I spend my time — whether it be freelancing, volunteering, or whatever.

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Published on May 30th, 2008 - 7 Comments
Filed under: Retirement

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

7 Responses to “The Future of Retirement?”

1
Frugal Dad Says:
May 30th, 2008 at 9:28 am
Interesting statistics – I think the other thing that needs to evolve, along with the traditional retirement age, is the traditional views of what “retirement” means. Many people still think of old folks sitting around playing gold, knitting sweaters and playing bingo. “Retirement” can be anything you want it to be. My ideal retirement looks a lot like yours. I hope to be an active volunteer, work a little freelance, and generally enjoy time with my family and friends.
2
Sara A. Says:
May 30th, 2008 at 12:17 pm
I wonder if this trend has anything to do with a dropoff in volunteerism? Would those retirees who are returning to paid work have become unpaid volunteers in the past?

I know for my grandparents’ generation, they kept very active in their retirement by volunteering and giving back to the community. My parents, who are boomers, are exactly the opposite. They will give money to charity occasionally, but would not consider “wasting” their time with something that does not directly bring them recreation or money.

I would be interested to see how the retiree volunteer numbers compare to the retiree returning to the workforce numbers.
3
Jim Says:
May 30th, 2008 at 12:24 pm
My retirement will consist of sitting on my bum, reading, watching movies, and playing video games all day. I will go between 51 and 57 and won’t look back.
4
Funny about Money Says:
May 30th, 2008 at 3:07 pm
Interesting, indeed.

I’d planned to be successfully self-employed at 50, but didn’t want to work that hard.

I’d hoped to retire around 62; then realized I couldn’t afford the COBRA and it wouldn’t carry me to Medicare anyway.

Now I’m thinking I’ll work till age 65 and then think about it. But what I’m hoping for is to hang in there until age 70. At 66 1/2 I can collect full Social Security without (unless the law changes) having it confiscated for the crime of earning a living, and so I could take the net income from SS (about $12,900) and put it directly into my retirement funds. Actually, I could live on that and have an extra $12,900 from my salary put into my retirement plan, pre-tax, cutting taxable income and plumping up the 403b to the tune of about $26,000.

My job is so easy it’s effectively semiretirement. As long as that stays the same, I’d be nuts to give up a salary and health insurance.
5
AJC @ 7million7years Says:
May 30th, 2008 at 3:11 pm
I agree; I retired at 49 and consider that ‘late’ …

Life’s too short to spend 40 hours a week, 50 weeks a year (less holidays) pushing papers for ‘the man’ … hell, I got sick of BEING ‘the man’!
6
My Dollar Plan Says:
May 30th, 2008 at 3:55 pm
I’ve always been planning for a retirement in my 30s. That way I can do what I want and spend time with my kids. Once they’re grown I’m sure I’ll be more than busy with volunteer activities and social stuff.
7
Frugal Mom LA Says:
May 31st, 2008 at 4:42 pm
My mom who’s in her 70s (Depression Era Baby) doesn’t want to retire–she likes feeling useful and getting paid for her expertise. My dad, same age as my mom, enjoys his retirement to its fullest. He was a career professional for one of the big mil-ind corporations. He was given the golden handshake in the early 90s and has since been involved in volunteering for his HOA, investing, playing tennis and helping watch his grandkids. So, you’ve got two perspectives there. My husband and I enjoy owning our own business despite its trials and tribulations and it gives us certain flexibility.

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