January 25th, 2011
10:25 AM GMT
An interesting group of people turns 65 years old this year, from Bill Clinton and George W. Bush to Steven Spielberg, Cher and Sylvester Stallone. Add to that list Geoff Woodhouse.
Geoff recently retired as a maths teacher and like many of his “baby boomer” generation, he may have decades in retirement. He told me that his decision to take early retirement, at 64, came quickly and without much preparation. Five months on, he has to figure out what's next.
Welcome to the New Reality of retirement life. With men in the west happily (and many healthily) living into their 80s and women pushing into their 90s, the impact on health care, pension systems and the jobs market is profound. The UK government recently estimated that more than seven thousand Britons will hit 110 years old by 2066.
"As far as retirement is concerned, attitudes are stuck in the last century, while life expectancy and the way the job market functions to enable people to work longer has moved on substantially, " said Roz Altmann of the retirement-focused company Saga Group.
There are many factors here to consider. Older folks may want to work way past 65 even if companies don't want them to. Here in the UK, the government this year will outlaw “forced” retirement at 65, which currently is the norm. Employer groups are furious because they say this will increase their costs and lead to more employment tribunals. They want more flexibility to fire workers in the UK, not less.
Campaigner Andrew Harrop of Age UK disagrees. "Actually, when you look at people in their 50s and 60s, they tend to be paid less than earlier in their career - quite compatible to people earlier in their career but often with a wealth of experience as well," he said.
Some older people will need to work longer in order to enjoy their lifestyle. With many state pension ages being raised closer and closer to 70 in the next decades, younger boomers will certainly need to find part-time work or new employment after their peak earning years.
That sheer number of people will balloon, of course, as this first year of “baby boomers” is joined by millions more each year, all the way up to 2029 when I and the other last-year boomers hit 65. I dare not say the year we “retire,” because the state pension ages will be later than that and most of us will still be working, hopefully at a more leisurely pace, and hopefully with few health problems.
Geoff Woodhouse said, "I would imagine there would be a considerable element of volunteer work in that mix, to justify the singing and the acting and all the other things," along with some occasional paid teaching work.
This leads to the next debate. If older people continue to work, and if governments raise the value of pensions, then this generation will become a powerful consuming group. Altmann said, "If you don't have much money when you are older, you are not going to go out and eat - restaurants won't thrive. You are not going to get your hair done - hair dressers won't thrive." She wants to remind younger people that giving more disposable income to this group will create jobs.
Those companies that tap into this market with products and services that are modern and sophisticated will thrive, said Harrop. "The economy is going to change fundamentally with more spending power in the hands of older consumers," he explained.
I spent one afternoon in Southampton with 68-year-old Jean Rumbold. She will never "retire," she told me happily. "I've got my car, we've the MGB in the garage that goes on the road for six months in the summer, and we've got the motor home. There is no way, if I was not working, that we could keep the three vehicles on the road."
With her father living into his late 80s and his mother in her early 90s, Jean has plans to work and spend for years and years to come.
Previous generations may have saved more money to pass on to children. Both Geoff and Jean say their children are fine, so money earned will be money spent.
Good news for struggling economies.
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