The traditional “retire and rest” is rapidly disappearing. We live longer, with better health and for many people the word “retirement” doesn’t at all match their active, busy varied and sometimes ambitious post 50’s. The popular interest-sharing and educational organisation for over 60’s gives us a further clue. It’s moniker, “U3A” stands for University of the Third Age. A great name and I wonder if “the third age” is perhaps a better way of describing what most of my clients are now enjoying?
We have evolved as human beings and understand that a happy life is not about working 18 hours a day, not taking holidays, burning out and becoming ill – all for the sake of a better house and a shinier car. Trends in some statistically happier countries, like Norway, show that people are working less hours but being more productive.
Productivity v. hours
For example, with a 38.6-hour work week the average US employee works 4.6 hours a week longer than a Norwegian. But by GDP, Norway’s workers contribute the equivalent of $78.70 per hour – compared to the US’s $69.60.¹
And there are a plethora of health and wellbeing studies and articles that suggest that downtime, breaks, reflection and shorter working days are beneficial. The notion of an 8-hour day has simply become the expected minimum. During the industrial revolution it was 14 to 16 hours until Ford introduced the 8-hour day and doubled their profits within 2 years.
The problem is that reducing hours for most workers isn’t that straightforward. In a recent experiment in Sweden², 6-hour days were found to result in better health and productivity. However, because of the increase in the number of extra staff needed to compensate for the gap, the model was deemed by some as unsustainable. Business owners cite similar logistical issues.
So, if we can’t work shorter hours as employed or self-employed people, what can we do, apart from looking after ourselves better? Well, the current trend is to semi-retire, cutting back on the number of days we work and managing a work life balance. Of course, this needs to be carefully planned so that we can still have the necessary funds to live the life we want.
Increasingly for people typically in their 50’s and 60’s “phased retirement” (semi-retirement re- branded) is an option that many people ask me for advice about. And employers are taking notice too, with the NHS offering a “retire and return” scheme for workers to come back into a less demanding role after leaving.
The notion of a 3-day week, perhaps topped up with some other work occasionally, is appealing to many. They quickly begin to realise what else can be added into their lives in terms of fulfilling activities. Not forgetting downtime of course. Many of us aren’t good at doing nothing, but it is the mental state that activates the default-mode network (DMN) and plays a crucial role in our memory consolidation.
With phased retirement offering so many potential benefits, you may want to consider it as an option. The first step is some financial modelling exercises to determine if and when it is possible and what it might look like. I do this with a lot of people. If you’re curious to know if a phased retirement might work for you, why not get in touch? Until next time, thanks for reading…
Categorised in: Retirement planning
This post was written by Huw Johns