Recent figures show that record numbers of people in their seventies are continuing to work. Rest Less, a website which describes itself as a ‘digital community for the over 50s’ recently analysed figures from the UK’s Office for National Statistics and found that the number of over 70s in employment has risen by 135% over the last decade.
In the UK one in 12 of those in their 70s are now working either part or full time, compared to just one in 22 in 2009, while across the pond, the share of Americans working into their 70s has risen from less than 10% to nearly 15% in the space of two decades according to US Census Bureau data.
These significant increases beg the question of whether the over 70s are choosing to continue working through choice or out of necessity.
Undoubtedly, continuing to work is a lifestyle choice for some. As the average lifespan is getting longer many people who have officially reached pension age wish to keep mentally and physically active through paid work and feel more than capable of doing so.
However, that is only part of the picture.
For many others, the stark financial reality of retirement makes working past 70 a requirement even if their physical and mental wellbeing would be better served by slowing down and spending their time in more leisurely pursuits.
To put it bluntly, many over 70s simply cannot afford to retire.
This is a problem which affects more women than men. Women in the UK frequently fail to qualify for the maximum state pension because they have failed to make sufficient national insurance contributions due to taking career breaks to bring up children or look after elderly parents. Even those who qualify will find that the full state pension, meagre as it is, will only afford a very frugal lifestyle.
In addition to having spent fewer years working and contributing to private pensions, women tend to earn less than men throughout their working lives which means that even if they invest the same percentage of their income, they will end up with a smaller pot when they retire. This is a double whammy for many women because on average they live longer and need to support themselves for more years post-retirement.
None of us know what state of health we will be in when we reach retirement age but all of us will appreciate being able to choose whether we want to continue working or not. That’s why it is so important to start retirement planning as early as possible during your working life, particularly if you are female. Take the issue of retirement saving seriously from the start in order to maximise the years that compounding can occur to make your pension pot grow and give yourself the gift of choice of how to spend your twilight years.
Whatever your age, if you haven’t already started a private pension plan, now is the time. Our team of professionals in our offices throughout Asia would be glad to help you take control of your financial future and advise you on the savings and investment options available to you. Why not get in touch?
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