Retirement is Dead: Vive la Différence!

When do you think you’ll retire? At age 65? Maybe younger if you’re fortunate, or older if you’re not – or maybe you are more fortunate if you don’t retire?

The concept of retirement as we know it is outdated and needs a radical rethink. The term "retirement" originates from the French word "retirer," which means to retreat from battle. Should the latter half of our lives really be viewed as a retreat? Given the advances in healthcare, increased life expectancy, and the dynamic nature of modern work, it's time to redefine what retirement means and how we approach the second half of life.

The Flaws of Traditional Retirement

Traditional working models have an embedded trigger for retirement, which is typically the resignation of employment and the entering of new financial support models through the superannuation and pension systems.  This ‘cutover’ type model for retirement has been adopted across industries and is subject to government and employer policies.

Current retirement policies are often rigid, based on the idea that people should stop working at a certain chronological age.  This approach fails to consider individual differences in health, capabilities, and personal aspirations.

We are already seeing shifting desires for retirement, which are not necessarily accommodated by the working models and policies currently in place.  The Age Wave study conducted by Merrill Lynch in the US, reveals significant insights into the desires and expectations of retirees. According to the study, 81% of retirees cite health as the most important ingredient for a fulfilling retirement, followed by 58% who emphasise financial stability. Interestingly, while 76% of boomers intend to keep working and earning in retirement, they plan to retire from their current job or career at around 64 and then launch into an entirely new job or career. This reflects a broader trend among boomers, who reject a life of either full-time leisure or full-time work.

When asked about their ideal work arrangement in retirement, the most common choice among boomers was to repeatedly “cycle” between periods of work and leisure (42%).   Moreover, 67% of boomers assert that continued mental stimulation and challenge is what will motivate them to stay in the game.

Traditional retirement has long been associated with a host of negative outcomes. Retirees often struggle, often for years, to establish their new purpose and routine.  The workforce suffers from an immediate substantial loss of working experience from that individual.  Statistics show that retirement can lead to increased rates of death, divorce, depression, and the onset of dementia. These stark realities are a wake-up call to reconsider how we spend the latter part of our lives. Instead of retreating, we should be embracing a new phase of purposeful living.

It’s not the age, it's the mileage

Instead of focusing on chronological age, we could consider functional age. It considers how well a person functions in terms of mobility, cognitive abilities, emotional stability, and overall health, rather than simply how many years they have lived. Functional age can vary significantly among people of the same chronological age, reflecting differences in lifestyle, genetics, and health conditions. These measures reflect an individual’s physical and mental capabilities more accurately than a simple age number.

Using chronological age as a primary measure reinforces ageist attitudes, portraying older individuals as less productive and more of a burden. To change this, we need to decouple age from economic measures and adopt a more holistic view of a person's value.

One way to do this is by phasing out structures that rely heavily on chronological age. This will help eliminate the artificial divide between young and old, reducing generational tensions and competition for resources. Instead, we should recognise the diverse contributions of people across all ages, whether economic or non-economic.

Dr. Kay Patterson, the Age Discrimination Commissioner, highlighted that a mere 3% increase in participation by individuals over 55 could generate a remarkable $33 billion annual boost to the Australian economy alone. 

The structures we need to dismantle and rebuild include the arbitrary age-based policies, economic and taxation hurdles, flexible workforce participation models, and ageism in the workplace and society.  Where to start?  Recast retirement as an exciting life evolution, not an adverse event.

A New Vision for the Second Half of Life

The key to redefining retirement lies in shifting our focus from withdrawal to engagement. This means rethinking how we work, learn, and contribute to society in our later years. John Maynard Keynes famously predicted that we would eventually move to a 15-hour workweek, allowing more time for leisure and personal pursuits. Adopting a model of three 5-hour shifts per week could be a step towards this vision, blending what we love to do with what we need to do. 

This approach not only provides financial stability but also maintains a sense of purpose and community engagement, which are critical for mental and emotional well-being. By continuing to work in a more flexible, purpose-driven way, we can mitigate the risks associated with traditional retirement.

In an age of fluid identities, it’s time to re-evaluate the relationship between age, society, and economy. Societies need a dynamic, age-fluid approach that values contributions beyond economic output. This involves acknowledging the non-economic roles that individuals play, such as caregiving, volunteering, and community engagement.

By adopting a more flexible, purpose-driven model for the second half of life, we can create a society where individuals of all ages are valued and supported. This shift will not only improve the well-being of older adults but also enrich our communities and economy.

Let’s Embrace an Age-Fluid Society

The traditional concept of retirement is no longer viable in our modern, dynamic world. By rethinking how we approach the second half of life, we can move away from the idea of retreat and towards a vision of continued engagement and purpose. Let’s embrace an age-fluid society where every individual, regardless of age, can live a fulfilling and meaningful life.  Maybe the French did get it right after all - “Vive La Difference”!