What caught The Detail Man’s eye this week.
I have long thought that the traditional concept of retirement needs to be put to bed. So I was heartened to read a thoughtful discussion in the Financial Times [1] on what it means to be retired in today’s world:
If ever there was a word that needed to be retired it’s retirement.
What kind of mental picture does this word conjure up for you — sunny beaches and no longer having to set an alarm clock? Or a stressful feeling about how much longer you will need to work to afford such a lifestyle?
Just as our working lives have changed immeasurably over the decades, so has our concept of retirement — not to mention how our long-term savings are structured. So in my own (very happy) retirement, I have been working hard to try and redefine it.
Retirement has an image problem…
I remember as a young(er) lad following my mother around as she visited old lady’s homes to do their perms. Many, at least in the area I grew up in, lived spartan lives. No central heating, old gas stoves, furniture and furnishings from before the moon landings. And they were better off than the poor folks in the run-down retirement homes…
So growing up, my image of people in retirement was one of poor health, poverty and often loneliness. It seemed like a miserable existence.
This image is hard to shift.
…Our memories are stuck in the past
I see a similarity to the late, great Hans Rosling’s arguments that our world view needs updating [2].
Extreme poverty has fallen by half in the past 20 years, but my mind’s eye clings to the vivid images of famines in East Africa and civil war in Sierra Leone. Sierra Leone has enjoyed three back-to-back democratic transitions since 2007. My view needs updating.
Updating our view on retirement
Hans Rosling’s catch-phrase could have been: “Let My Dataset Change Your Mindset”
So what does the data tell us about retirement?
It’s good news. Those aged 65 to 79 are the happiest in society [3] and pensioner poverty has fallen dramatically [4]:
[5]
I accept it’s not all sunshine and rainbows. There are still many retirees in poverty and large levels of inequality. Especially between those nearing retirement (and on drastically lower benefits) than the actually retired [6].
But overall, the financial picture is relatively healthy for Britain’s senior citizens. Back to Don Ezra in the FT [1]:
For starters, few people I know of traditional “retirement age” want to stop working completely. They might want to spend less time working, or do a different kind of work, but they still want to be active.
While more specific, the phrase “life after full-time work” is a mouthful. So I created an acronym for it, using the first letters: (l)ife (a)fter (f)ull-(t)ime (wo)rk, and it came out as LAFTWO. Aha, I thought, that’s how my Texan friends would say “Life Two”. And suddenly three years of assembling thoughts fell into place, and acquired a structure, purpose and much more.
Life One is our grown-up working life. Life Two is what follows. It’s the best part of life, so much so that Life One is just the long prologue that finally gives way to the main event, when enjoyment, happiness and fulfilment peak.
I think Life Two is quite catchy. What do you think?
P.S. Normal service will resume next week with The Investor back in the seat – so look forward to more Brexit rants and fewer tenuous links…
From Monevator
No new posts this week (slackers!) so three articles from the archive-ator:
Financial independence – adrift in the vastness – Monevator [7] (The Accumulator)
Family Income Benefit – the forgotten policy? – Monevator [8] (Mark Meldon)
What is the minimal risk asset? – Monevator [9] (Lars Kroijer)
News
Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1 [10]
StanChart chief blasts investors as ‘immature’ for pay revolt [search result] – FT [11]
Millennials need £80k more in retirement than their grandparents – Telegraph [12]
UK’s renting millennials face homelessness crisis when they retire – Guardian [13]
London house prices fall at fastest rate in 10 years – Guardian [14]
HMRC has ‘no clue’ how many members have faced pension tax relief fines – Professional Pensions [15]
Landmark court judgment will likely shake up public sector pension schemes [search result] – FT [16]
Only a fifth of investors held their nerve during 2018 stock market tumble – City A.M. [17]
…according to this underlying Schroders Global Investor Study 2019 – Schroders [18]
[19]
Products and services
Lifetime ISA investors fined £1m for taking cash out early – The Times [20]
In the wake of the LCF scandal FCA eyes curbs on buying high-risk financial products on the internet [search result] – FT [21]
FCA also warns travel insurers to do more for those with pre-existing medical conditions [search result] – FT [22]
Ratesetter will pay you £100 [and Monevator a cash bonus] if you invest £1,000 for a year – Ratesetter [23]
Cheap wills have sparked a surge in court cases as families fight over inheritance – ThisIsMoney [24]
Mapping the bitcoin forks – Visual Capitalist [25]
Comment and opinion
Three reasons why we don’t need DB transfers – Henry Tapper [26]
The Problem With FIREing At 4% And The Need For Flexible Spending Rules – Michael Kitces [27]
First job? Stand by for some harsh financial realities [search result] – FT [28]
Tim Harford: We are all potential victims of the con artist [search result] – FT [29]
Betteridge’s Law: Should I fake a divorce with my wife so we can split my pension and avoid a tax bill, then remarry her? – ThisIsMoney [30]
How do other countries raise more in tax than the UK? – Institute for Fiscal Studies [31]
Retirement Investing Today on personal finance literacy – RIT [32]
Utterly shameless self-promotion: going back to work – Young FI Guy [33]
Timing of FIRE – Quietly Saving [34]
Cullen Roche on ESG investing – Pragmatic Capitalism [35]
The Investor’s Brexit corner
The wisdom of the crowds – The Conversation [36]
Mr Johnson’s red herring kipper – Full Fact [37]
National Audit Office hub on all things Brexit – NAO [38]
Office for Budget Responsibility warns on Brexit borrowing costs (from the horse’s mouth, the two-page fiscal risks summary) – OBR [39]
Kindle book bargains
#StandOutOnline: How to Build a Profitable and Influential Personal Brand by Natasha Courtenay-Smith – £0.99 on Kindle [40]
How to Give Up Plastic by William McCallum – £1.99 on Kindle [41]
Talking to My Daughter: A Brief History of Capitalism by Yanis Varoufakis – £1.99 on Kindle [42]
More Time to Think: The power of independent thinking by Nancy Kline – £0.99 on Kindle [43]
Off our beat
Unbelievably good piece on how close Notre-Dame was to collapsing – New York Times [44]
Amazon’s most ambitious research project is a convenience store – Bloomberg [45]
The absurd language used by job adverts – Economist [46]
From the comments in last week’s weekend reads [47]: Why you have (probably) already bought your last car – BBC [48]
And finally…
“The trouble with love is that you can’t buy it. You can buy sex. You can buy testimonial dinners. You can buy pamphlets that say how wonderful you are. But the only way to get love is to be lovable. It’s very irritating if you have a lot of money. You’d like to think you could write a check: I’ll buy a million dollars’ worth of love. But it doesn’t work that way. The more you give love away, the more you get.”
– Warren Buffett, The Snowball [49]
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