“We believe that investors need plan to be in the financial position to retire, taking into account the longer life expectancies, but that they could aim to work or contribute to society until they are no longer able to,” said Cannon Asset Managers’ private client portfolio manager, Patrick Barker.
“Although the current system of retiring relatively early in life appears morally questionable and psychologically devastating for many, what is extremely encouraging is that the industry is growing in awareness of these challenges and the subsequent opportunities that exist from a simple change in thinking. The man in the street is sure to follow suit and embrace this shift in thinking by gearing up for longer working lives and better investment planning.”
While the age of 70 was once determined as being an appropriate retirement age, now, work has become more mind and knowledge based, and with medical technology, people are beginning to live longer.
This has therefore had an impact on the right time to retire as well as the process involved in planning retirement.
“As man gains a better understanding of how to manage physical health and scientists are developing ways to extend life expectancy, we will extend our lives. This poses a challenge financially and psychologically and places a different perspective on how you plan your life. How much we accumulate and need to accumulate changes and how we invest changes,” Barker explained.
“After further lowering the retirement age to around 60, countries have more recently extended it because their social systems cannot fund retirees and work contracts are starting to be re-structured to accommodate longer working terms. In addition, far fewer people can afford to retire now, given a lack of planning or understanding of inflation, compounded by the fact that people are living far longer than their money lasts.”
He added that retiring too soon could also lead to a lack of purpose, passing on soon after retirement or depression.