At Wells Gibson, we’re not particularly keen to use words such as retirement or retiree, as we believe these are words which ought to only apply when we draw our last breath! If anything, we believe this stage in your life is a new beginning.
This new stage, or new beginning, whereby you transition from paid employment, is achieved because you are financially independent. So, no more use of the word retirement in this article!
However, one potential consequence of the coronavirus pandemic, could be a delay in stopping work for millions of over 50s. According to recent research, as many as 1.5 million employees over 50 could push back the age they cease paid employment due to the pandemic.
This research found that 15% of over 50s plan to cease paid employment at a later date due to the financial consequences of the pandemic.
On average, these delays are likely to be three years.
Around a quarter of those over-50s surveyed said they would keep on working indefinitely, either on a full-time or part-time basis.
The research reported that 10% of over-50s could delay their plans by more than five years, thanks to the virus.
Looking at older workers who have been furloughed or have experienced a pay cut during the pandemic, nearly a fifth said the financial consequences of Covid-19 would mean a delay to when they cease paid employment.
Around 4 in 10 said they expected to work indefinitely due to the pandemic.
There is no doubt that the financial impact of the Covid-19 pandemic seems to be particularly pronounced for people aged over 50, who are still in work.
While some people will choose to work for longer, or indefinitely, the key consideration when it comes to this research is that it seems this decision has been driven by the financial impact of the pandemic, rather than personal choice.
We know this stage is a key transition in all of our lives, so seeing a material impact on your household income will naturally lead to pessimism. Pessimism about achieving your goals of stopping work and perhaps other life and financial goals.
It would be naïve to say that these financial issues will not have an impact on people’s ability to cease paid employment or achieve financial independence. We believe It’s important for people to have a strong understanding of the options available to them before coming to the conclusion that there needs to be a delay.
It’s never too early to be planning for financial independence; it is far better to be prepared, than to need repaired. This is why having a comprehensive wealth plan, that has your desired lifestyle at its core, will ensure you can visualise what your financial future could look like. It can help you to be less anxious about tomorrow, as well as give you the certainty to know you can secure all that you value.
As always please get in contact if you have any questions.