Spence & Partners latest blog for Pension Funds Online –
“Will you still need me, will you still feed me, when I’m 64?”
That famous Beatles line maybe summed up how twenty-somethings viewed 60-year-olds back when the song was written. Their take was that by the time you got to 64 you would need to be looked after and cared for as you probably had one foot in the grave.
In the 1960s private pensions were relatively new, equalisation was still to rear its head (men retired at 65 and women 60 – can we all remember those days?) and people generally died within five years of retiring if they actually managed to make it that far!
Now if we fast forward to the 2013, pensions are beyond complicated, there is no retirement age as such and the state pension age is just moving further away. Perhaps the most salient point is that most people just do not die within five years after retirement any more and expect and need their pension to be paid for 20, 25 or sometimes 30 years and beyond.
However we, as an industry, are still fixated by the fact that our members on the whole should retire at 65 and the systems are geared up to constantly remind individuals from age 64 that they are due to retire in a year. Indeed I have seen many flowcharts that regimentally tick down the last 12 months with constant requests for information and reminders that the member must make a decision about their retirement.
No real thought is being given to the fact that maybe, just maybe, the member might be better off not retiring at 65 and reflecting upon what their needs might be for the next 20 years or so. I do appreciate that 65 is arguably too late to reflect and that reflection should be done at a much earlier age (another day, another blog) but making an irreversible wrong decision at 65 may just be plain daft.
It is said that today’s age 60 is yesterday’s age 50. Therefore, it is worth reflecting that yesterday’s 50-year-old worked for 15 years before retiring, so perhaps today’s 60-year-old might have to do the same. But if working a bit longer and making better choices at age 65 helps fund a better retirement, then that’s no bad thing and perhaps, to paraphrase another line from the same song, the cottage in the Isle of Wight might not be too dear…