Retirement reimagined
- Lem Chetty
“As people live longer, retirement is evolving from a single event to a life stage transition that can take 10 to 15 years.”
It’s been said that the first person who will live to the age of 200 has already been born. While this may be an extreme notion, people are certainly living longer than previous generations. What does this mean for retirement at 60 to 65 in ‘middle age’ and will the ‘silver economy’ replace traditional retirement?
For retiree Anne Fitchett, 65, Honorary Associate Professor in the School of Civil and Environmental Engineering, her day includes exercise, crafting, and possibly brushing up on her calculus. On the topic of retirement, Fitchett is a case study herself, but she is also the author of a paper on The Transition to Retirement from Academia.
“Retirement in the traditional sense is becoming less common, with many retirees seeking meaningful activities post-retirement,” says Fitchett. “At 65, individuals often have decades ahead of them, and they have to make a conscious plan to occupy that time with fulfilling engagements, whether through work, volunteering, or hobbies. It’s something to wake up for in the morning, to have something to get stuck into and feel useful.”
Her research on the meaning of work in retirement highlights the importance of planning and the concept of “successful ageing”. “Retirees, especially from academic backgrounds, often find their identity closely tied to their work, making the transition to retirement a significant life change,” she says.
True ‘me-time’
Fitchett created a weekly schedule for herself at least a year ahead of retirement to avoid the possibility of falling into a lonely and ungainful period of her life. Her week included various activities – from a small amount of academic work, as well as her own writing, exercise in nature, and crafting dedicated to each day – providing both flexibility and structure. “This approach has made my retirement more meaningful,” she says.
Fitchett writes in her paper that academics may have better options for continuing to hone cognitive skills and physical wellness, compared to their counterparts in the corporate or industrial world. “In an emeritus or honorary position, the individual often has the freedom to choose how they spend their time in academic pursuits, whether teaching, supervision, research, or community outreach on behalf of the university.”
“There is also a prevalence of retired academics seeking out a larger role within the institution, often crafted on their previous administrative duties or some new venture that they orchestrated towards the end of their career. This is often a conscious strategy to ensure identity and meaning post the retirement age, thereby postponing ‘real’ retirement,” she adds.
However, the biggest impact of retirement, Fitchett says, is psychological. “Recreation and structure create an anchor for me. I have to make the effort to focus an hour or two on a daily task, so the ‘work’ is done, before going to an art gallery or for a walk with a friend. Retirement comes at a stage when you think about how life could be more meaningful, and you need to create that meaning and purpose for yourself.”
Retirement planning starts in our 20s
Megan Carswell, Adjunct Professor in the School of Statistics and Actuarial Science has researched trends in retirement – and the future for retirees is definitely not the gold watch era of decades ago, she says.
“As people live longer, retirement is evolving from a single event to a life stage transition that can take 10 to 15 years,” Carswell says. During this transition phase, people often realise that they have much more to offer than they might have thought and may find alternative work – but most importantly, many also realise that they have run out of savings so that they can retire comfortably and need to consider alternative income options.”
Fitchett adds that finances are a major part of psychological security. “The financial aspect is for many, a bit of a shock. I was fortunate to understand that you plan for retirement from the first salary cheque. That’s something I passed onto my kids, who now have a clearly structured investment and retirement plan, but many people only think about this at the end of their working lives, and they end up in difficulty.”
So what happens at age 60 to 65 when people would traditionally retire? Carswell says, “First, employers in South Africa and around the world, are raising retirement ages, so people are staying in the economy longer. Many people still retire early – but then realise they are without sufficient savings.”
This could force people back into the working world – creating a ‘silver economy’ – or to rely on other support structures. Carswell says that this trend suggests that we should start thinking early about having adequate savings, outside employer funds.
“Many retirees initially opt for living annuities, which offer higher starting incomes but can lead to financial shortfalls as living costs and healthcare expenses rise,” she explains.
The lack of guaranteed post-retirement medical aid exacerbates this issue, with most retirees paying out-of-pocket for medical care.
“For those nearing retirement, seeking financial advice is essential. Exploring available retirement options can reveal surprising flexibility,” she adds. “The traditional replacement ratio, a percentage of work income, is less relevant over longer retirement periods. Instead, a multiple of salary (18-20 times) is recommended, though many fall short of this goal.”
Empowering individuals to improve their savings, regardless of starting point, is crucial. Carswell concludes: “There’s a saying that the best time to start saving for retirement is when you are in your twenties, and the next best time is right now.”
Read more related Wits research
- The Transition to Retirement from Academia
- Extending the normal retirement age in occupational defined contribution funds in South Africa
- Lem Chetty?? is a freelance writer.
- This article first appeared in?Curiosity,?a research magazine produced by?Wits Communications?and the?Research Office.
- Read more in the 18th issue, themed #Work, which delves into the evolving nature of work, shaped by societal shifts, technological advances, and equity challenges.