The Covid-19 pandemic has forced many of those who are nearing either company determined retirement ages or self-imposed ones, to reassess their careers and how they view retirement. People who are fortunate enough to be working from home might be coping with a mix of technological hurdles, while also enjoying more family time and more flexible hours. Avoiding peak hour traffic while getting in some mid-day exercise are some of the additional benefits.
Too many others nearing retirement though are facing real financial worries due to reduced income, job loss, and instability in their investment accounts. Some of these themes were starting to surface pre-Covid due to South Africa’s tough economic environment and Covid-19 has only magnified these conditions.
Under ideal circumstances, there are three broad choices about how to transition away from your full-time job: phased retirement, full retirement, and continuing to work in retirement. Let’s consider how the pandemic has affected each of these options and which path could be the most fulfilling for you.
People traditionally choose this option consciously because it provides a number of benefits. With phased retirement, you can keep working and continue to make payments to your retirement accounts and saving plans. At the same time, you can also begin enjoying some of the benefits of retirement. Often this option is negotiated with your employer.
Working from home during the pandemic might be giving some workers a small taste of what phased retirement is like. Reducing the hours that you’re in the office can help you ease into a new routine where you’ll be spending most of your time at home. You’ll also most likely be working with a much more flexible schedule, which will allow you and your spouse to start experimenting with shared and separate calendars that will let both of you get things done without driving each other crazy. This can be important as full retirement usually can have negative consequences on spousal relationships as couples need space for relationships to grow, especially during the retirement transition.
Moreover, the pandemic has forced all of us to reassess the people, experiences, and goals that mean the most. Phasing into retirement can help you fine-tune your work-life balance as you continue to process how social distancing has affected you professionally and personally.
That same spirit of introspection is leading many seniors to think about jumping into full retirement sooner than they were planning. Perhaps being away from your job is making you realise you’re too used to doing unfulfilling work for a paycheck that’s not making your life better. This feeling is not uncommon. Or, if you’ve been putting off retirement, the experience of social distancing might have motivated you to stop waiting and start doing as soon as life gets back to normal.
Social distancing has created a separation between our sense of self and our jobs that some people find a little unnerving. That feeling is very common among new full retirees, even those who are following a long-established plan and retiring wholly on their terms. If you are leaning towards a full retirement right now, talk to your spouse or family about how you’d like to reframe your identity and start living a freer and more fulfilling life after work. The reality of full retirement can end up being less than fulfilling if you don’t plan ahead.
Working in retirement
Even before the coronavirus pandemic, more and more seniors were choosing to work after retiring. Today’s retirees are healthier and more active. Some are working past 65 because they love what they do. Others transition to part-time jobs that let them explore other interests while still earning a paycheck. Many working retirees also want to top off their retirement and savings accounts while they’re still able so that their nest eggs keep pace with increased life expectancy.
Could the coronavirus pandemic accelerate this trend? While social distancing, many seniors have gained greater proficiency with technologies like Zoom, Skype and Slack. Those skills could open up a whole new world of remote jobs, including teaching and consulting positions. Entrepreneurial seniors might be looking at the shifting landscape of global business and spotting a new route for starting their own dream companies. And still, other seniors might be so sick of being cooped up that, when conditions are safe, they’ll seek out part-time jobs as a way to reconnect with their communities.
If retirement is a transition you saw fast approaching on your horizon at the beginning of the year, make sure that you talk to your trusted advisor about how the coronavirus has affected your thinking. This discussion should ideally cover both the financial and often neglected lifestyle impact that retirement has on people. If your retirement plan extends beyond what’s in your portfolio, you will no doubt be successful.