Hollywood is full of actors who are still making movies in their 80s and 90s. For screen legends such as Harrison Ford, Helen Mirren, and Al Pacino, retirement simply isn’t on the cards.

What’s more, it’s not only celebrities who are enjoying working for longer. Indeed, the shape of retirement is changing dramatically.

While previous generations often stopped working completely when they reached their retirement “cliff-edge” (their retirement age), “phased retirement” is now becoming an increasingly popular choice.

Research published by Aviva has revealed that 40% of 55- to 64-year-olds in the UK are planning to retire gradually before they turn 65.

Read on to discover how baby boomers are retiring differently from their grandparents, and find out whether a phased retirement is right for you.

People are ageing later in life, so many choose to keep working for longer

Average life expectancies vary around the world. Yet, in general, improvements in public health education, working conditions, and healthcare mean that many people are enjoying longer, healthier lives.

This improved longevity may be contributing to the change in how baby boomers are choosing to retire.

Life expectancies have increased from generation to generation

Global life expectancy at birth has increased significantly since the mid-1900s. According to data from Statista, someone born in 1950 could expect to live to the age of 46 on average, compared to age 73 for a person born in 2023. Projections suggest that this figure could rise to 77 years old by 2050.

In the UK, baby boomers could expect to live well into their 80s. The Office for National Statistics (ONS) life expectancy calculator reveals that the average life expectancy for a 60-year-old man is currently 85 years in the UK and there’s a 3.5% chance they could live to 100. A woman who is 60 years old in 2024 could expect to live to the age of 87, and they have a 6.2% chance of living to 100.

Perceptions of “old age” have changed

The prospect of not only living longer but also remaining healthy later in life (a longer health span), is driving many baby boomers to continue working in their 50s, 60s, and beyond. Previous generations may have felt “too old” to work when they reached these ages, but the public perception of ageing has shifted in recent years.

Research published by the American Psychological Association shows that middle-aged and older adults think “old age” begins later in life than their peers did decades ago. This could be due to increases in life expectancy, health span, and later retirement.

Working could benefit your wellbeing

Work can provide a sense of purpose, fulfilment and social interaction that boomers see no need to give up as long as they remain fit and healthy.

Some may even experience a new life stage of growth and rejuvenation when their children fly the nest and they need to reassess their life goals. This could potentially drive them forward in their careers at an age when their parents and grandparents might have been preparing for retirement.

A phased retirement provides a flexible way to move from employment to retirement

As boomers can expect to remain healthy and active enough to work for longer than previous generations, it’s no surprise that this has affected how they choose to retire.

Rather than facing an inevitable “cliff-edge” retirement at a particular age, many choose to rejuvenate their lives in middle age – rather than winding down – and gradually scale back their work commitments as they get older.

This approach could allow you to tailor your retirement to your individual needs and goals – how your phased retirement looks will be unique to you.

The early phase of retirement – scaling back and finding a purpose

In the early phase of retirement, you might decide to step back from the immediate demands of your career. This could involve reducing your work hours or changing how you work. For example, you might switch to consultancy work or continue director-level work instead of attending the office every day to manage day-to-day operations.

Alternatively, you might prioritise finding a purpose in your work and potentially change focus to follow a passion. So, you could retire from your career but continue working on a new venture that is particularly meaningful to you.

This often happens when children leave home, and parents seek a new sense of purpose.

The later phase of retirement – relaxing and enjoying your free time

At some point after you begin winding down your working life, you may decide to retire completely. This could happen over months or many years. A phased retirement puts you in the driver’s seat, so the timescale is up to you.

During this phase of retirement, you may decide to indulge in your hobbies or follow long-held dreams – such as travelling the world – before you begin to slow down in old age.

Is a phased retirement right for you?

The changes in how people are choosing to retire are having a broad-ranging effect on our societies. For example, longer life expectancies are putting increasing pressure on the State Pension in the UK.

However, you might find a phased retirement beneficial in several ways:

• It could allow you to bolster your retirement savings – By continuing to earn and make regular contributions to your pension.
• You could retire with purpose – By stepping back from your career and turning a passion into a business.
• You could continue to enjoy the emotional benefits of working – By maintaining valuable social contacts and continuing to achieve professionally.
• It could ease the transition from employment to retirement – By allowing you to adapt emotionally to a change of pace and also providing an idea of your spending patterns as you approach full retirement.

Boomers are embracing phased retirement, but it may be worth considering this approach whatever your age. Retiring gradually could allow you to chart your own course by building the lifestyle you desire in your preferred time frame.

Read More:

What does retirement look like today and what does it mean for you?

Why you need to ensure you have enough for all 4 stages of your retirement

Get in touch

If you’d like to learn more about phased retirement and how this flexible approach could work for you, we can help.

Please email info@bmpwealth.com or call +852 3975 2878.