For those of us aged 50 and over, an extra candle on your birthday cake can bring out mixed emotions – a celebration of your life, but also a subtle reminder that you’re not getting any younger. However, generation-on-generation, we’re living longer on average and it’s likely that many of us will be able to benefit from the gift of more time, hopefully to do the things we enjoy.
With the prospect of a 100-year life now real for some, Aegon’s research into life after 50 – or what we call the Second 50 – takes a look at the many factors that are likely to shape these later years. We’ve grouped these into the themes of work, wealth, family, health and wellbeing – we’ve named these the ‘Five Fundamentals’.
In this article, I’ll share some of the findings from our latest report, which I hope may help you to make the most of your own unique Second 50.
According to official statistics, someone aged 50 can now expect to live to 86, with a 1-in-16 chance of reaching the triple-digit milestone of 100. While not all of us will hit that mark, many of us will have more time than previous generations and should think about how we want to make the most of our extra years.
With longer lives, our Second 50 is changing, too. Evolving opportunities, albeit alongside new challenges, are leading many of us to adopt new ways of living, working, saving, supporting our families, and retiring.
Modern later life is a far cry from what we’ve witnessed our parents and grandparents experiencing. We can’t simply rely on following in their footsteps when it comes to making some of life’s biggest choices – indeed for many, the Second 50 will be uncharted territory.
The traditional three-stage model for life – education in our early years, a long-term career or ‘job for life’ in adulthood, and then a complete hard-stop retirement from work in our 60s – is fast becoming obsolete.
We now live unique ‘multi-stage’ lives, defined by a constant evolution of our situations, priorities and responsibilities. The world around us is also changing, not least around the expectations and opportunities for those traditionally regarded as ‘middle-age’ or beyond.
For example – on average, people are having children later. Those children are also increasingly living with their parents into adulthood, as they struggle with career and financial instability, as well as a challenging housing market. At the same time, we’re thinking differently about our own careers and work-life balance – possibly taking up new opportunities to change fields or re-enter education – and pursuing new hobbies and interests. Many are also having to support ageing parents as their health deteriorates.
With so much to consider, the real challenge in managing our Second 50 can be balancing all of our needs and responsibilities in a way that works for both us and our loved ones. And given the recent economic environment, it’s probably no surprise that Aegon’s research identified the possibility of running out of money as one of the biggest later-life concerns (44% of survey respondents). So it can be a case of balancing our aspirations with a dose of reality – whether that’s financial or allowing for our likely future health status.
According to the research, with the prospect of longer lives, people are open to working for longer. Interestingly, only 28% of employed people expect to make an immediate and clean break from full-time work into full-time retirement. Instead, 40% envision a gradual transition into retirement, perhaps working part-time, while a further 22% never plan on retiring fully.
Thankfully, the reasons for doing so are largely positive – 50% say they want to keep their brain active, 42% enjoy working, and 23% feel empowered to carry on. Although a further 23% are worried they haven’t saved enough to retire, and 17% are generally anxious about their retirement income.
If you’re one of the many people who are attracted to a more gradual transition into later life and retirement, how might you balance your needs, resources and responsibilities?
Should you wish to carry on working, many workplaces now offer flexible or hybrid working options, which could be valuable in helping you to balance your time. This is especially true for those who have caring responsibilities for elderly parents. Many employers are looking at how to meet the needs of employees of all ages, so it’s worth asking if this is a possibility.
From a financial perspective, pensions are also likely to play a big part in how you finance later life. If you’ve been an employee since 2012, it’s likely you’ll have been auto-enrolled into a workplace pension scheme that you and your employer have been paying into. These are commonly ‘defined contribution’ pensions, which can offer flexibility in how and when you take your retirement income. For example – if you plan on switching from full-time to part-time work, you could supplement your reduced salary by ‘drawing down’ an income from your pension, while allowing the remaining funds and future contributions from you and your employer to grow tax-free.
Clearly, each of us will have our own unique journey into later life and there’s no ‘right or wrong’ way of living that. However, giving some thought to the fundamentals shaping our later life can help us make sure our own Second 50 is second to none.
Steven Cameron is pensions director at Aegon UK, an Edinburgh-based provider of pension and investment solutions
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