Illustration of a life time

2020! What a year! It remains to be seen what the lasting legacy of this global pandemic will be and it will certainly take some time before we reach a true reckoning of the medical, societal, economic and human impact. To keep perspective amidst the ever-changing circumstances, I have found it useful to put the events of 2020 into a broader context.

The flu pandemic of 1918 was the most severe in recent history and spread during a time without the level of medical sophistication or capacity for joined-up responses and knowledge-sharing that we have available today. We have progressed significantly since then in terms of our health and the quality and length of our lives.

In fact, for our children and grandchildren, there’s a very good chance they will still be around to celebrate their own centenaries. A child born in the West today has more than a 50% chance of reaching 100, compared with a 1% chance a century ago.

The end of the three-stage life?

A few years ago I wrote a series of articles about the book, The 100-Year Life: Living and Working in an Age of Longevity. It’s worth revisiting the ideas in the book as they make for interesting reading on this topic, especially now as we are all being invited to review how we are working and living today and maybe long into the future.

The thrust of the theory is that the traditional three-stage life of education, work and retirement – which was created for a society where people generally stayed in the same profession all their lives and died in their 70s or 80s – is no longer fit for purpose.

Instead, it suggests that this will be replaced by a new multi-stage life where we can think more creatively beyond these outdated constraints, to the possibility of a multi-stage life where transitions, career changes and continuous education become the norm.

Education and keeping our options open

During the course of a longer life, the need to invest more regularly in our education and skill base throughout will increase. It will be necessary to develop and nurture our skills to remain relevant and marketable over a longer and more varied career, rather than thinking of education solely as something that happens only at the beginning of our lives.

A longer life brings greater capacity for change and so having more available options becomes more valuable, if not crucial, to an individual’s success in the multi-stage life. Big decisions will take place later and commitments like marriage, starting a family and buying a house are already being postponed longer today than they were by previous generations.

We will think of education in the broadest possible sense, incorporating not just formal schooling but also our personal development, physical and mental wellbeing and tapping into the resourceful networks of our peers and families.

Career changes

With a longer life comes a longer period of work and productivity, but potentially one which includes greater variation spread across multiple stages. The traditional work model of steady progression in a relatively unchanging sector will become less common and less suited to a rewarding or prosperous career.

More flexibility could inspire an age of greater entrepreneurialism and self-employment, where big organisations will still continue to exist but be surrounded by smaller, more nimble, specialist businesses.

Platforms and models where skills can be matched with demand will continue to grow in popularity. These new ecosystems are likely to blend life, work and leisure in new ways.

A new retirement model

If retirement ages stay the same and life expectancy lengthens this will have implications for how we plan for retirement. For some of us, perhaps not much will change. Those nearing the end of their career now or in retirement already, are likely to have been one of a steadily-reducing number of the three-stage-life generation to find this model sufficient for their needs.

Conversely, for those entering the work force now it’s almost certain that their retirement planning will, or should, follow a very different trajectory. An earlier start and a more purposeful approach to their pension will be vital for many if they are to successfully prepare for a comfortable later life.

Some certainties

While ‘The 100-Year Life: Living and Working in an Age of Longevity’ is a theory, it contains many social and generational shifts that we are already seeing play out in our lives and communities. In any of these scenarios in this potential new multi-stage life that we may be moving towards, what’s clear is that having access to good financial and cash-flow planning is essential.

Many of these social shifts have been accelerated by the pandemic, where many of us have reassessed our priorities. Remote and home-working, amongst other factors, have shifted the work/life balance for many. However, as we embrace the potentialities for quality of life, less travel and more time spent with family, it’s also important to weigh up any potential financial trade off this may have, and plan out the financial impact with your adviser.

Whether we are funding lifelong education or changing our career, launching a business or planning far in advance for a comfortable longer retirement period – the correct financial and legal guidance will be instrumental in helping us to make a success of the circumstances that these changes will bring. That’s one certainty, however long we live.

You can find all three parts of my earlier articles on this topic here. If you would like some advice and guidance with your future planning, please get in touch.

This article is distributed for educational purposes and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.

Past performance is not indicative of future results and the value of investments can fall as well as rise. No representation is made that the stated results will be replicated.

Author Andrew Pereira

Director, Wealth

Andrew has been working with families, high-net-worth clients and business owners for well over 20 years.

Learn more about Andrew Pereira

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