In the 2015 film The Intern‘, Robert De Niro plays a 70-year-old retiree who re-joins the workforce as an intern at a fashion e-commerce firm.
Both boredom, and a feeling that he wasn’t done with work were at the root of his return. Although it may appear to be simply a fun, frivolous comedy to while away a couple of hours on the couch with, it is actually indicative of a wider trend.
As people live longer and the demarcation of “old” has become blurred, the notion of retirement has changed. There is a growing sense that the possibilities in ‘retirement’ have expanded dramatically.
Our confidence that such a crucial attitudinal change has occurred is supported by the latest UBS Investor Watch report, which explored UK investors’ (defined as an individual with investable assets over £250,000) mindsets towards work and retirement. It found that wealthy individuals are opting to pursue prolonged careers, entrepreneurship or philanthropy during the traditional retirement phase.
Some 71% of respondents to the survey regard retirement as an opportunity to explore alternative or complementary careers. Only 23% of professionals see themselves as having what might be described as a traditional retirement and doing no work at all.
You can’t stop us
A significant part of the retirement debate so far has been framed by the idea that people have to work longer to be able to afford their retirement. But, our report reveals that many want to carry on because the alternative no longer appeals. Nearly two-thirds (65%) say they choose to go on working, despite having the funds to retire, because they enjoy working too much.
Advisers need to recognise that age-old motivations in financial planning, while not necessarily redundant, have changed
With work and retirement no longer viewed through the lens of a binary, tools-down moment and investors embracing a longer transition between the ages of 45 and 85 or beyond, this has great implications for their financial planning – and for those who help them achieve their financial planning goals.
Financial advisers need to recognise that age-old motivations in financial planning, while not necessarily redundant, have changed. A key part of this acknowledgment must come in the form of challenging our clients to identify what their goals and objectives for this period of their life are. The financial requirements of someone who intends to pursue a new business dream versus someone who would like to play golf are going to be very different.
Attitude towards risk is another factor. While people approaching retirement age might be expected to become more cautious and conservative, the opposite is true for the respondents in our survey: 60% say that their confidence as an investor has grown as they have aged, and 30% are more willing to take financial risks.
The historic model of an accumulation phase followed by decumulation should no longer be the coordinates plugged into auto-pilot mode by financial advisers.
At UBS, we are increasingly hearing from our clients that another financial planning ambition is coming to the fore: legacy. And the concept of legacy itself has evolved too; it isn’t confined to financial legacy for their family, although that is still very important. In retirement and beyond, investors are progressively seeking to leave their mark on society.
The historic model of an accumulation phase followed by decumulation should no longer be the coordinates plugged into auto-pilot mode by financial advisers
Part of this is about financial contributions, but more and more it is about imparting their knowledge and experience.
In the coming years, a big question for society will be how to leverage this desire.
Financial advisers have a role to play here too, in three key ways:
- Helping clients formulate and understand their evolving ambitions;
- Providing the financial frameworks to allow these goals to be achieved;
- And establishing the best network of connections to help them to leverage their unique skillsets.
Through our conversations with clients, and the respondents in the Investor Watch report, it is clear that retirement has become a dynamic life phase loaded with hopes and fears.
We can no longer treat this period of client’s lives based on the assumptions of quaint notions of retirement. You never know how many of them may seek out an intern job at an e-commerce firm, just like Robert De Niro’s character.
Nick Tucker is head of UK domestic at UBS Wealth Management
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