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November 19, 2013 at 08:06 AM
It’s time for this thing called “retirement” to start using its assets to golf, sail, travel and enjoy its grandchildren while it still can. After all, it’s over 78 years old.
How do we calculate its birthday? By the Social Security system.
Born in 1935, this system was a revolutionary innovation that addressed the need to take care of people who were beyond their feasible working years and dignify their lifestyle until they died.
But in 1935, the life expectancy was actually lower than 65, and only around 57 percent actually lived past that age. Today, life expectancy for someone who just entered the workforce is closer to 80, with about 80 percent living well past age 65. Furthermore, people are living healthier lives. Sugary drinks and trans-fats aside, medical technology is enabling people to enjoy 65 as the new 45.
So why do we still talk about 65 as some magic number? Why should somebody stop contributing at that time? Today’s workforce doesn’t think of it that way anyway.
See also: Help to family rivals retirement for many boomers
“Retirement” is for old people
In fact, according to a Maddock Douglas language study conducted in 2010, 50 percent of Millennials (Gen Y) identify retirement with being old, with a negative connotation. They prefer to look at their lives as a series of adventures that make their mark on the world and on the futures of the people they care about.
Are we going to become irrelevant if we assume people want to retire at 65? Perhaps more are going to opt to “re-fire” at any age they choose, figuring out how to create, grow and use their assets to continually contribute to the world.
What implications does the change have on retirement planning? Well first, let’s stop calling it that. Maybe something like “scenario planning” or “opportunity analysis” would be more descriptive of what today’s consumer is looking for.
The career re-fire
Will the planning horizon be long or short? My bet is that it will be shorter than it is now and will continually get shorter.
People may want to plan for something five years down the road versus 10 or 20, knowing they will have the capacity to renew, reinvent and recalibrate what they want to do after that. This squares with the Gen Y view of employment.
