The changing face of retirement
A generation ago, retirement meant stopping work completely and winding down. The baby-boomer generation, on the other hand, are much more likely to see it as a fresh start – a chance to explore new opportunities or carry on working on their terms.
We're living longer, healthier and often more affluent lives – today's retirees can expect to spend 20 or more years in retirement.
The state pension age is rising, so we'll have to work for longer before we can claim our pension benefits. It's unlikely that the state will become more generous in the future - and fewer companies are offering final salary pension schemes.
All of which means that we will all need to take greater responsibility for our pension plans.
On a positive note, the pension system has become more flexible - you don't have to buy an annuity with your pension pot. If you have or take out a Self Invested Personal Pension (SIPP) you have the option of leaving your pension pot invested and drawing an income from it (subject to certain limitations).
More about annuities and income drawdown
These days there is no blueprint for retirement – you have to create your own vision of what you want from life after work.
You might want to sell up and start a new life abroad. According to Standard Life research* the top retirement hotspots are Spain, France, USA, Canada and Ireland. Or you might prefer to stay in the UK, but move closer to family and friends.
At some point you might choose to downsize, perhaps to release some capital, cut your outgoings or help your children financially.
Of course, retirement doesn't have to mean a full stop to your working life. You might ease yourself in, cutting back the number of days a week that you work, or take on contract work.
You might even decide to become an 'olderpreneur' and start your own business – an ambition for 1-in-20 retirees, according to our research.
"We're relocating to France"
The Wingham-Wattses were planning to enjoy the quiet life in their French farmhouse. But as retirement approaches, they've realised that they can turn their passion into a business.
Norma Wingham-Watts and her husband Peter, both 63, are art teachers. Three years ago they sold their house in Wiltshire and bought a substantial property in France, with a view to retiring there.
'We've got a year left in teaching – we should both have retired at 60, but the recession pushed our plans back.
'We bought our house in the Charente with retirement in mind, and have spent the past three summers out here, getting a feel of what it would be like to live here permanently.
'We knew that we wanted to relocate, but realised that with the right property we could use our skills to create some extra income.
'I suppose we're unusual because we've "upsized". The house in France has a gîte that we can rent out, there's a workshop where we can hold courses in watercolour painting, stained glass and jewellery design. And we also offer B&B in the main house.
'Unless you're very fortunate, and have retired on a generous final salary pension, you have to think of ways of energising your retirement. We're fortunate in that we earn our living doing something that we love, and enjoy passing those skills on to other people.
"I'm carrying on working"
Patricia McDonagh decided that she wasn't ready to retire, so she's scaling back her commitments so she can work three days a week and phase her retirement.
Patricia McDonagh, 62, is Head of Education and Training Operations at the Association of Accounting Technicians (AAT). She commutes from Peterborough to the AAT office in the City.
'I turned 62 in November 2010, but I didn't feel ready to retire. I love working, and I particularly love working here. There's a great atmosphere and over the years I've shared a lot of experiences with my colleagues. I don't really like to think about leaving the workplace for good – I know it's a cliché, but work really does give you a sense of purpose and self-worth.
'At the moment I'm working three days a week, but my job is quite responsible and far-reaching. I try to work 7.15-4.15 because I like to have the evening at home, but as a manager that's not always possible. I'm on email and I've synched it to my iPhone. My work-life balance is definitely shifting, though.
'It's only in the last 10 years that I've really focused on planning for retirement. Earlier in my career, I hardly saved a bean, but when I hit 50, I thought: "How am I going to live when I stop working? I'm single, and there's no-one to look after me." So I started saving regularly and joined the AAT company pension plan, which was a final salary scheme. That closed, but then I took out a group personal pension scheme with Standard Life.
'I've accepted that my standard of living might drop a bit when I finally retire, but that's because I've got a very comfortable lifestyle now. But I feel I have the building blocks in place now so that I can do some of things I want to when I retire, like volunteering abroad.'
'If I could give my younger self one piece of advice it would be: "Start thinking about money earlier!"'
"We downsized to help our kids"
Tom and Elena Snow decided to sell the family home where they'd raised their three children so they could help them get onto the property ladder.
Tom Snow, 82, and his wife Elena, 75, moved in 2005 from a six-bedroom house in North Oxford to a three-bedroom flat in the same area. Tom was previously Director of the Careers Service at Oxford University and Elena worked as a psychiatric social worker. Both are retired.
'We bought our house in 1970, raised our three children there, and enjoyed living there for nine years after we retired. However, as our children began to have families of their own, they were able to visit less often, and we found ourselves rattling around in a large house with a big garden to maintain.
'We decided to sell the house to release some capital so we could help our children financially, as well as boost our own income.
'We gave half of the profits from the sale to our children. This helped one of them to build a larger house, another to renovate an existing house, and enabled the third to buy their first house.
'Our own share of the profit is invested, and currently funds overseas holidays and special events such as our golden wedding party. We also contribute to our children's pension schemes. Our day-to-day living costs, including UK holidays, are just about met by our pensions.
'We're very pleased indeed with the flat. It's spacious, light, well-insulated and quiet. We also feel completely safe here and can lock up and go away on long holidays without a care in the world.
'I'd advise others thinking of downsizing to move before you're forced to. That way, you can stay in charge and make decisions with less stress.'