Retirees are abandoning the concept of early retirement and planning to work past the age of 67 according to fund manager Fidelity International, which says people are looking for more control over their destiny amid increasing awareness that a happy retirement depends on more than just money.
In a new report called ‘Retirement: The now and the then’ Fidelity says more Australians are now planning to continue working pas the age of 67 for a number of reasons.
“Respondents are continuing to work later in life because they enjoy it, it allays boredom and it provides a sense of purpose,” says Fidelity’s head of client solutions and retirement, Richard Dinham.
“It seems that retirement for many Australians is becoming more of an emotional journey. The research found that Australians who felt they were in control of their retirement decision had more positive emotional outcomes compared to those who were unexpectedly forced into retirement,” he continued.
The research, which involved an online survey of 1,514 Australians over the age of 50 according to Fidelity, found that people believe a happy retirement comes down to a combination of factors grouped as ‘the six Cs’:
- Circumstances – maintaining good health and wealth are critical for enjoyment
- Character – resilience and self-esteem build a good life
- Connection – having a sense of community with friends and family
- Control – avoiding uncertainties in life and feeling like the master of your own destiny
- Confidence – peace of mind to keep looking forward
- Capability – creating a good life trajectory by adapting to different circumstances
Advisers increasingly need to be aware of these drivers and factor them into their retirement planning strategies, Dinham believes.
“This is an important consideration for financial planners as it indicates their role is evolving, as they have to also take into account their clients’ overall emotional wellbeing and how that ties into their finances,” he said.
That consideration naturally includes recommending products that are fit-for-purpose, Dinham added.
“Whilst retirees still need to take some investment risk with their portfolios, fit-for-purpose investments provide exposure to the right kinds of investment risks and, importantly, at the same time help reduce the extent of those investment risks that the client would normally be exposed to.”