What a crazy idea! This model is OVER and it is time to align our thinking and life planning for 21st century realities. If you add the 240-odd months for which middle-class children go without earning income to the above insurance salesperson's scenario, you get a situation where income earning is crammed into less than half a lifetime. While this may help sell pension investments, it lays bare an unsustainable life pattern for the 21st century.
As healthy life spans extend towards 90 years and beyond, the idea of retirement at 60 is exposed for the anachronism it is. Why in the world would we jam-pack our creativity and earning capacity into less than half of our lives? It can't go on and it won't.
started a very successful business at the age of 79 - and his business is thriving as he turns 81!
Last week I saw a financial planner whose nifty software suggested that if my wife and I stop working at 65, we will run out of money before we get to 90 years old; if we continue earning at half our current rate for an additional ten years then we can safely stay alive to 100 without resorting to bread-and-water or cadging off our kids.
In my lifetime the concept of retirement is already crumbling. In my children's generation the "portfolio career" is taken for granted. People in the 21st century work flexibly over most of their adult lives.
So it's time to put retirement on pension. What I wonder about is:
- How will people's creativity make the most of the "portfolio career" where we design a mix of giving and taking throughout our lives instead of the mad rush of "wealth creation" jam-packed into the 30s, 40s and 50s?
- Will this rebalancing of income and expenditure over the full lifespan lead to less craziness of inflated salaries at the peak of businesses?