Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 542

Let's ditch the idea of retirement

This is an edited transcript of a video talk by Professor Lynda Gratton of the London Business School on why we need to change our ideas of retirement.

The economics are clear: we need to be working into our 70s. The idea of retiring earlier is fine if you're going to die at 70. But the truth is most of us aren't.

Every single decade, we live longer. So the thought that you might live to 100 is a possibility. And so the idea of retiring in your 60s I think is entirely outmoded. We need to think about working right the way through our life. But of course, to do that, we have to change the way we think about our whole life.

The pandemic changed everything about work

I've been writing about the future of work for more than 20 years. And frankly, I was beginning to get pretty frustrated. I wrote about how the world was going to change, and I was sort of surprised it didn't change because actually the forces against change are pretty strong. People were saying, "Well, we still need to come into the office. I know there's a long commute, but it's really important. You can retire when you're 60. That's going to be okay." I knew that wasn't going to work, but I really couldn't see the forces that were going to change that.

The pandemic was an astonishing event. Suddenly 50% of workers could work from home. So what that did was to upend many of the traditions we had about work. For example, if you take a look at a typical life that your dad had, or that my dad had in the 40s and 50s, it followed 3 stages, which everybody did, by the way at the same time: full-time education, full-time work, full-time retirement.

You don't really have to have a great deal of self-insight. All you have to do is to look around left and right and ask yourself, "What's everybody else doing at my age?" Because age equals stage. But that's not going to work for me. It's not going to work for you, and it's certainly not going to work for our children.

Think about the way that the world is changing. It's changing in the sense that we're living longer. So that means that simply retiring at 60 or 55 just isn't going to work. It's changing in the sense that there are huge technological changes coming up almost on a daily basis. For example, generative AI is a thing that we're all looking at now. Why are we so excited and frightened of that? Well, it replaces knowledge work.

In fact, there's an argument that it might even replace the creative tasks that we do. Technology requires us to upskill and re-skill every year of our life, and it's changing in the sense that the family structures that we have are also becoming much more individual. If we're going to have different ways of living, different family structures, we need to redesign work.

A multi-stage life

Here's what I think's going to happen. We're going to start doing what I would call a multi-stage life. It's the idea that you can do all sorts of different things at all sorts of stages. For example, education suddenly becomes something you do right the way through your life. It becomes a lifetime of learning.

Work becomes something that you dip in and out of. Rather than starting in a company when you are 20 years old and just going straight through, you could work part-time. You could freelance, you could take time off. And retirement also moves back, and it takes time.

The point that I want to make is it's very hard to work until you're 70 in one, long, never-ending streak. You have to break that up. And you can make a life that works for you. Not the life that worked for your dad or for your mom. The life that works for you.

The challenges of a multi-stage life

Now, what's exciting about a multi-stage life, but also frankly makes it more difficult, is that each of us lives our multi-stage life in the way we want to do it. It could be that the age of 30, you decide to take time off for a year and travel the world. But as you look around, there's not that many other people who are going to be doing the same thing. You have to have more of a sense of yourself.

The truth is, the 3-stage life is relatively easy. You don't need to think very much about it, you can just get on and do it, and do it the same way as all your peers do. Multi-stage life, the ask is that you do something that perhaps nobody else in your peer group has done. You become, in other words, a social enterprise, you actually do your own thing, and that takes courage.

The sort of questions that you want to ask yourself is, "What's important to me? What is it that I want to get out of my life? How do I want to live my life?" So there's big questions you need to ask yourself now in order to make the most of the trends that shape our work.

Let's ditch the idea of retirement. Let's all work as long as we can and make work fun, exciting, and a learning experience.

 

Lynda Gratton is CEO & Founder of HSM Advisory and a Professor of Management Practice at London Business School. She's the author of The 100-Year Life. This is an edited transcript of Lynda’s video talk on Big Think.

 

31 Comments
DAVID IRELAND
January 17, 2024

Increases in average life expectancies have plateaued. Most males suffer huge physical declines after their mid to late seventies. Travel insurance becomes prohibitively expensive for the over eighties. Surely a wealthy country can support a retirement income scheme that can provide for a ten year active retirement? If people have endured a physically demanding working life, their capacity to continue after sixty five is often severely impeded. The best way to deal with the underfunding of aged care is to allow for high levels of untaxed income from effort by the retirement aged and for it to have zero impact on any welfare entitlements. Of course, having high death duties would be a good option also but like with all things expedient, politicians are not long term thinkers.

Lyn
January 16, 2024

One has to wonder if insurance companies would eventually take up Prof Gratton's concept by lowering travel insurance cost for the over-70's if fit enough to be in this futuristic workforce. Doubt it as they have the risk figures reflected in skyhigh premiums so her hypothesis unlikely to come to fruition unless sudden serious illness in over-70's is thwarted. Maybe in a 100years.

Dave
January 14, 2024

The thoughts of a knowledge worker. These days companies treat staff as resources use them or throw them out.
Most Manual working struggle physically after the age of 50/55 years. Hopefully by then they have cleared their debts.

Hoping for early retirement!
January 13, 2024

Yet another spin on it is, that the older generations retire, so they can then enjoy the time they have left and the younger generations take over the reigns and work for the next generation an so on and so forth. Let's face it, who wants to go to the grindstone everyday, for the rest of your life. That is not a life, if you cannot enjoy something or have something to look forward to - and travel at above 70 and 80 is more of a struggle than an enjoyment.
The FIRE movement is the better option if you can - but as others above have said, it comes down to circumstance, the economy and the things out of our control - that keep on this pressure to have to work. If work is a choice, then there might be some enjoyment in it - but being on the flywheel for your entire life - that is certainly not.

James
January 12, 2024

A somewhat subjective, moralising, biased article! Many assertions are made with no proof they are true: "The economics are clear: we need to be working into our 70s"; "Work becomes something that you dip in and out of"; "Let's ditch the idea of retirement. Let's all work as long as we can and make work fun, exciting, and a learning experience." "Work" and "retirement" no doubt mean very different things to different individuals. There is no one size fits all! One is not a moral paragon if one continues to work until one's ultimate demise! Nor is one morally deficient if they choose to retire from paid work at any age! It is entirely subjective and can be driven either by choice or necessity. If you continue to derive meaning and value from working, do so. If you are fortunate to be able to retire and be master of your own time and desires, do so! Simple!

Rob
January 12, 2024

Very succinctly and aptly put, James. Couldn't agree more.

Kaye
January 13, 2024

I agree with James as well - if you are a cleaner who is wrangling a mortgage and family needs, dipping in and out of work sounds pretty unrealistic? Some people simply cannot work into their seventies - my Dad was one - he was a carpenter and his body gave out ... he made it through to his late 60s but simply couldn't climb up a ladder any longer. Yes, workplaces are more flexible now, but this article seems to be directed at knowledge workers ... not the millions of others including those in the gig economy and those who can't cover rent ... life's not exciting when that is happening.

Dr David Arelette
January 12, 2024

What long column of winging "should have, could have been" - how does a project get a year behind, one day at a time, how does life be taken and leveraged, one day at a time. I set my 20 to 30 target to have three UG degrees, get a house and get a job with a MNC, did that; got my Masters at 43 and my PhD at 51, expat posting to London, Red Ford Mustang, just delivered MBA lecture from 6 to 9 PM for $500, created small $50,000 a year half a day week businesses here and overseas, one day at a time and everyday counts. Ask did I make every single day a winner from 20 to 70 before listing your shortfalls and blaming everyone except yourself.

Disgruntled
January 12, 2024

Some will continue to work until they drop because they have no choice, the working poor.

Others will work till they drop as they can't fathom the thought of a regular pay not coming in.

Yet others will retire from the workforce as soon as they feel they can afford to do it,

Others will retire at pension age, or just keep working even though they can afford to retire but don't no what to do with themselves if they stop.

Peter
January 12, 2024

I am 70 next week and have been made redundant three times. I still work but my back prevents me from sitting, standing and makes walking painful. Nice theory . . .

Disgruntled
January 12, 2024

I have zero intention of working past 60. I would have done my time by then.
I have enough in Super to retire now but unfortunately, rules were changed over the previous years meaning I have to wait until preservation age of 60.

Previous Divorce means outside finances are not sufficient to pull up stumps now at 56.

Co workers ask me what I intend to do when I retire, first and foremost I'll be grateful that I don't have to get up and go to work anymore.

Be a productive member of society and keep working... pffft. I'm going to travel, do things I want to do.

Some days I'll wake up and say, stuff it, I'll do nothing today. Others, I'll book a flight somewhere, get in my car and drive somewhere, go for a ride on my bike. I'm done expending my labour coins while others make dollars from me. I've saved and invested well. I intend to enjoy the benefits of that.

Manoj Abichandani
January 14, 2024

Hey
If you are permanently disabled (mentally) and not working you can legally access your super as a pension before you are 60

Disgruntled
January 14, 2024

Yes, you can. Just need a Doctor and a Specialist to sign you off.

Gforce
January 12, 2024

I like the basic premise of the article to 'Ditch Retirement'. My ageing father who had the soul of a stoic philosopher, quipped to me many times, I am still working, and you never retire. This was despite being an octogenarian and a pensioner. The point is he saw himself as still being viable, thinking creatively and possessing an iron will to live and contribute to society via the general discourse of living and engaging. The concept of retirement, its outdated and meaningless. Its time we reframe it with a useful life well lived as the stoics championed.

DW
January 12, 2024

I love how various people espouse the idea of basically working till you drop, as this article seems to imply. This ignores a couple of fundamental realities. Although I was lucky enough to change careers just over a month prior to my 57th birthday last year, the reality is I’m one of the lucky few, as ageism is rife in the work world. Not only that, but with rapidly advancing technology put more and more jobs at risk of elimination, we have a slippery slope to nowhere.

B
February 02, 2024

Finally someone to address that elephant in the room... Agree, DW
Gratton makes employment sound like the life of a butterfly: work here a few months - perhaps part-time; take a beauty break in Bali for a year; work at another place for a couple years, etc.
Honestly can't see that for over 55's in a work environment where HR recruiters are 23-year-olds who dream loudly about the Day of the Pillow. You could start your own business (like I did) but that's only if you're prepared to work very hard until you're 70 in one, long, never-ending streak...Too hard for Gratton apparently. The sad fact is that most over 55's do not get a say in WHEN they retire. Especially during that 'astonishing pandemic' many over 55's were retrenched/shoved into retirement before they were ready.

Old and Cranky
January 11, 2024

Perhaps we could retire with greater security if the first $30,000 per year contributed to a super fund during our working life were tax-free. Additionally, as I approach retirement, the vultures are circling my nest egg—lawyers, accountants, investment advisors, retirement community promoters, and real estate agents—all looking for a cut. Then the State Government charges transfer duty on any downsizing purchase, while espousing the cultural virtue of moving out of the family home so we can be warehoused in a small dwelling until death. Look at the cost of that move in its entirety, commissions, renovations, repairs, (in our case in excess of $100,000) all so we can vacate a large comfortable home to a 2 bedroom dog box.

Retirement Dr
January 11, 2024

As an academic myself and Professor of Psychology I have to agree with most of the comments above - the utopia described by Gratton ignores health issues, and redundancies (consistently in the top 3 reasons people leave work according to the ABS) not to mention individual differences in spending preferences and carer responsibilities. I also seriously doubt the possibility of dipping in and out of the workforce in the context of ageist attitudes to older workers. Sure - we'd love employers to change but try telling that to the 63 year old on a "sojourn" that ends up a permanent reality.

Michael
January 11, 2024

"ageist attitudes" It is the main problem!

david edwards
January 12, 2024

so..ya stop working, ya start dying.

Errol
January 11, 2024

Have to agree with the majority of posts. This is a typical academic article devoid of the realities for many people particularly those blue collar workers, those with health issues, family responsibilities or those just trying to afford the mortgage on their grossly overvalued house.

Would be nice if we call all live in that fantasy though

Edward
January 11, 2024

So true. Academics are full of theory not practicalities. The point of working is to live a life of quality for each person's requirements and freedom to enjoy that quality. It's all about choice not someone should be working til they drop dead as I know some have or they have died at 67 of cancer! Tell this theory to that partner/spouse. I'm sure you'd get a great response.

Cam
January 11, 2024

My parents worked past age 72 and 75, with the last decade funding travel to all corners of the world. I can see an appeal to that idea, maybe buying extra annual leave or with some leave without pay.
My Dad had lost some of his work energy by the end though. I recall him saying he wasn't interested in managing any projects anymore when he was 71. He'd worked longer and harder than most, so that may have been a factor. He's very active as he moves into his mid 80's.
I don't see how working longer can be done for many blue collar jobs and shift work though.

TonyD
January 11, 2024

I suggest Professor Gratton venture out into the real world...

Robert Craig
January 11, 2024

This seems a very limited view of the past present and future and for the most part reflects the lives of about three generations of, mainly, men who have lived in wealthy industrialised countries with developed state education, welfare, health and aged care. This is a tiny proportion of world population and the problem we face is the rejoining of these privileged generations withe rest of humanity.

Been there, got the T-shirt
January 11, 2024

An academics white collar worker view on life, however for a lot, if not most blue collar workers, the situation is that they struggle to physically do their current jobs by sixty and employers don't want to employ people over sixty with minimal experience in a new occupations, even if they have done all the study and training.

MD
January 11, 2024

This is great in theory but employers need to embrace the change also. Part-time roles for instance are hard to come buy for those over 60. Decades of experience are ignored when they could add knowledge to a company

Richard
January 11, 2024

Hmmm, ‘dipping in and out’ of work isn’t going to maximise the compounding your retirement savings over 20, 30 or 40 years.

Moreover, her strategy makes no allowance for possible mid-life health issues that come out of nowhere, and force you into an early retirement (as what happened to two friends in 2023, both in their late 50’s).

In my view, work hard and constantly in your early years and let compounding work it’s magic. The early hard yards creates optionality as you approach retirement, especially if you develop significant health issues or you do strenuous manual work that’s taking its toll on your ageing body.

CC
January 11, 2024

That's easy to say for those of you in comfortable daytime only office jobs pretending to do work whilst reading emails and looking at Facebook, but for those of us who have to do tiring shift work, stressful work environments, and /or physically demanding jobs that are taxing on the body, working even past 60 can be very difficult.
Life is too short to be working until you die, and once you're in your 70's things such as travel and sports can be so much harder or even impossible when health problems set in and spoil one's retirement.

Neil
January 12, 2024

I agree, having just retired at 60 following 40 years of shift work in very stressful ICU's.
I have seen far too many die in their late sixties and seventies or living with disease or disability, telling me they wouldn't have enough in super, according to their accountants, to retire earlier, and now it's just too late.

TheBigShow
January 11, 2024

I would like to hear more on your thoughts on how this applies to blue-collar workers. Many of them have given no further thought to work and their retirement beyond turning up to the same job each day and expecting to retire at the age of 60 as their bodies have broken down and they don't know how to do any other job.

I guess they will just use whatever super they have got then go on the age pension until they die, which perhaps will be earlier due to their working life being more physically taxing than say, a professor or a financial planner.

 

Leave a Comment:

     

RELATED ARTICLES

The quirks of retirement planning with an age gap

Retiring young: Is 50 really the new 65?

Making judgments based on age

banner

Most viewed in recent weeks

An important Foxtel announcement...

News Corp's plans to sell Foxtel are surprising in that streaming assets Kayo, Binge and Hubbl look likely to go with it. This and recent events in the US show the bind that legacy TV businesses find themselves in.

Welcome to Firstlinks Edition 578 with weekend update

The number of high-net-worth individuals in Australia has increased by almost 9% over the past year, and they now own $3.3 trillion in investable assets. A new report reveals how the wealthy are investing their money.

  • 19 September 2024

The challenges of building a portfolio from scratch

It surprises me how often individual investors and even seasoned financial professionals don’t know the basics of building an investment portfolio. Here is a guide to do just that, as well as the challenges involved.

Creating a bulletproof investment portfolio

Is it possible to build a portfolio that performs well in any economic environment? So-called 'All Weather' portfolios have become more prominent of late, and this looks at what these portfolios are and their pros and cons.

What's left unsaid in Australia's housing bubble

The current difficulties confronting housing policy partially stem from an explosion of mortgage debt. We've engineered a price for housing that will cause a severe problem for future generations – if it isn't addressed.

Which asset classes are a bargain now?

Many assets have enjoyed a positive year, leaving some of them looking pricey. Here we compare valuations of cash, bonds, stocks, and property, and suggest where investors may be able to find opportunities.

Latest Updates

Retirement

The quirks of retirement planning with an age gap

A big age gap can make it harder to find a solution that works for both partners – financially and otherwise. Having a frank conversation about the future, and having it as early as possible, is essential.

The everything rally brings danger and opportunity

Most market players today seek quick rewards and validation of opinion. Outsiders willing to combine new technology with old-fashioned patience and focused analysis can prosper.

Investment strategies

Portfolio construction in the real world

Building a portfolio is like building a house. This framework can help you move towards your goals without losing sight of reality or leaving yourself vulnerable to market storms.

Shares

Feel the fear and buy anyway

In this extract from his new book, the co-founder of Intelligent Investor reveals how investors can avoid critical mistakes and profit from opportunities in collapsing share prices.

Investment strategies

The risks of market concentration and not staying invested

MFS chief investment officer and CEO elect Ted Maloney talks market risks, similarities between Trump and Harris, and the most important thing investors can do to avoid destroying value.

Gold

Gold's important role as geopolitical tensions rise

Equity markets have traditionally struggled at times of sustained geopoltical tension. Gold, on the other hand, has thrived and can provide investors with protection against "unknown unknowns".

Strategy

The changing face of finals footy and the numbers behind it

A well-meaning AFL rule change in 2016 seems to have had unintended consequences. The top teams might cry foul but AFL bosses are unlikely to be too miffed about the outcome.

Sponsors

Alliances

© 2024 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.