Working During Retirement May Be 'The New Normal'

Welcome to the age of the "Nevertirees."

A study of wealthy individuals around the world conducted by Barclays pokes holes in the notion that an individual should stop working at a pre-defined age, as it is more of an illusion than a reality.

The study found that increasingly, the wealthy are rejecting the idea of a traditional retirement—the romanticized golden years filled with leisure—and continuing to work long past their early 60s.

Retired couple
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Retired couple

In fact, some retirees are even using this period to embark on entirely new careers or businesses.

According to the Barclays Wealth survey, some 60 percent of respondents said they envision always being involved in commercial or professional work of some kind, whatever their age.

Although for some the decision is driven by the expectation of a longer lifespan and concerns about the accompanying financial uncertainties, there is a good chunk of the group that believe their work is their passion, and to stop would be unthinkable.

While this trend appeared to be global, there were some regional differences. Very few of the wealthy individuals from Saudi Arabia, United Arab Emirates, Qatar, and South Africa ever planned to stop working.

But in Switzerland, Spain and Japan, the majority of the wealthy individuals were looking forward to a more traditional retirement.

In the US, the majority were subscribing to this "new normal" for retirement, with some 54 percent saying they would want to continue working in retirement.

Matt Brady, head of Wealth Advisory at Barclays Wealth Americas, said there are several things going on, starting with the fact that people of retirement age today are healthier and more vital than they used to be.

There also were some financial concerns expressed by the group, which was comprised of 2,000 people from 20 countries with more than $1.5 million each in investable assets. Among them, 200 had more than $15 million in investable assets.

The group felt confident that they could predict their daily expenses in retirement, but were less certain they could predict their investment returns or their own personal health.

What was also interesting was that the survey uncovered that in some cases the desire to continue working part time in retirement increased after the individual reached retirement age.

Perhaps it's the realization that retirement may prove to be a bit more boring than they expected when they were younger.

One telling observation was that 85 percent of those who were under 45 years old said they were looking forward to spending more time with their family in retirement, but of those who were already over 65 years old, only 68 percent said that was how they were spending their time.

Even more eye-opening was that only 25 percent of the retired American high-net worth individuals described their retirement as "the best years of my life."

The shift toward a working retirement could have several ramifications.

First, from the investing point of view, there is the possibility that those planning to work longer may have the opportunity to take greater risk with their investments for a longer period of time.

"Your appetite for risk may increase if you are working and getting an income," Brady said.

The trend could also have a profound impact on younger workers.

Some believe that in an age of limited employment opportunities, a pool of talented and experienced workers who continue to work will block opportunities for younger workers. But some argue that individuals who work longer will increase the opportunities available and add to the GDP.

The study quoted John Llewellyn of Llewellyn Consulting, an economics consultancy, who expects the older generation could drive economic growth.

"The concept of a blessed retirement used to be relevant, when the body was exhausted from physical labor. But it is not the case anymore for many people; not everyone wants to be told they have to leave work and play golf," Llewellyn is quoted as saying.

Also, there is the thought that those who work longer, live longer.

"Trade unions say it is not fair to force people to retire after 65, but I would reply to them 'what right do you have to shorten my life?'" Llewellyn said.

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