Retirement - a personal journey

“What’s your selected retirement date?”. That’s a question we ask our pension scheme members when they join our schemes. But nowadays, does anyone actually know when they’ll retire? A retirement plan that’s been made, even when someone is approaching their “expected” retirement date, can change due to health, wealth or other factors. Having a goal in mind is good – but we in the industry need to appreciate that our members' retirement plans will, and do, change.

My dad retired at 63 and my brother at 62. I’d always thought that I might retire around the same age. Having reached the age of 59 in 2024 and having worked almost solidly for 39 years (except for the month off at the Rugby World Cup in 2019!), I’d set my heart on travelling the world. My bucket list includes Alaska, Vietnam and Costa Rica, as well as the Rugby World Cup in Australia in 2027.

But my “expected retirement date” changed when two things happened in 2024. Firstly, my dad passed away and left me a sum of money. Later in the year, my husband was diagnosed with Huntington’s disease, a degenerative disease, similar to MND. My plans of working to 62 or 63 suddenly seemed distant and the travel plans less likely if I continued to work for three or four more years.

So, I went to speak to the wonderful Jeff Simpson at Hymans Robertson Personal Wealth (HPRW) and asked him if I could afford to retire this year. When I’d first started thinking about retirement around five years ago, I’d initially had a chat with the HRPW team who’d given me the “homework” of finding out how much the annual pension would be from my two final salary schemes, and when they would pay out. I’d been pleasantly surprised that they paid a decent amount out at age 60 (I can see the “generation DC" amongst you now turning green with envy!). Jeff carried out some forward-looking modelling for me and we concluded that, with the money coming in from my dad and the other assets I had from my compulsive saving throughout my life, I could retire this year without too much danger of running out of money in the long term. 

That was re-assuring and gave me more flexibility. But it didn’t stop my brain waking me up at 2am for the next month or so saying things like:

• “Can you really afford to retire?”
• “Should you take your ISAs before your pension?”
• “After working at a frantic pace over many years, how will you cope with not working in a team and not being a “somebody” anymore”,
• “Do you want to do something else in the industry after you retire from full time working”. (I think the answer to the last one is yes, but I’ll need to work out what will fit best for me and where I feel I can add most value!)

I had totally underestimated the stress and psychological impact it would have on me deciding to retire. (My next blog will examine more about the practical issues I faced here!).

So, what are my key learnings from the emotional side of retirement, and how can we potentially tackle them more effectively in our industry?

1. Like starting a family, going through a divorce or buying a house, retiring is a hugely emotional thing. I suggest we treat all members as “vulnerable customers” when they’re close to retirement. It may be a different vulnerability to some of the others – and is probably temporary, at least for many - but by appreciating the emotional upheaval people are going through, it would help us make the experience of retirement less stressful for many
2. Regularly remind members who are closer to retirement about updating their selected retirement date and their beneficiaries. This is when it really matters. And do this in a positive way that genuinely supports people in their decision making.
3. Give your members as much help and support as possible with the process of retirement and the key decisions they need to make. Not everyone will be as lucky as me with final salary pension benefits and, for many, the thought of not having a regular income in retirement is very scary. Even though I’ve worked in the pensions industry for nearly 40 years, I couldn’t have done it without the guidance (and now advice) of the team at HRPW.
4. Giving your members access to pre-retirement webinars is great – but you need to build on this with individual conversations which allow people to ask the questions that are most relevant to them. Sessions like that can be provided in a cost-effective way. And when you look at the cost against the benefits this will bring to your members, it really can be priceless.

The key lesson for me has been that the decision to retire goes well beyond affordability. It’s a sea change in life and a time where help and support on the wider aspects of retirement, including the emotional impact, is as critical as the financial side.

If you have any questions on anything covered in this blog, please don't hesitate to get in touch.

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