If life expectancy increases to over 100 years, future generations may need to work even longer and longer to finance their longevity. Some experts estimate that today’s children and teens will work for more than 60 years. They may not be able to retire until age 80 or 85.
how does that sound to you? If we don’t change our work culture, things could be dire. However, if history repeats itself, labor systems may evolve as people live longer.
Explore the past, present, and future of work.
past work and retirement
Retirement is a relatively new concept. Until the late 1800s, people worked to their physical limits and then hoped that their families would support them for the rest of their lives. People usually continued to work until less than two years after his death.
Social Security was introduced in the 1930s to make retirement more financially viable. (However, it was originally intended to fund a few years of retirement, not 20 or his 30.)
Today’s work and retirement
According to Gallup, the current average retirement age is 62 years old. At this age, we have worked for about 40 years, enjoyed about 20 years of childhood and about 20 years of retirement. This system has advantages and disadvantages.
Professional: Income is relatively stable and typically increases over a lifetime.
Cons: For most people, even 40 years of work isn’t enough to fund 20 years of retirement.
Cons: The period of highest earning potential often coincides with raising children and caring for adult parents, creating great stress in midlife. (Learn more about the U-curve of happiness and combating financial stress in midlife.)
Cons: It may be underutilized after retirement. If people weren’t burnt out, some level of work would be enjoyable and rewarding well into what we now think of as “retirement.”
How will the future of work change?
According to the Stanford Longevity Center, “In the United States, demographers predict that half of today’s 5-year-olds will live to be 100 years old.”
This change in longevity will likely usher in new work and retirement practices. Some possibilities:
Glide path to retirement:
This is an incident. More and more people are switching to part-time work before deciding to fully retire.
learn more:
Increased work flexibility in midlife:
The pressures on people in midlife can be immense. Peak earnings coincide with the time when people juggle raising children, financing education, and covering the needs of aging parents.
Parental and family leave policies could be one solution. Additionally, some companies are adopting radical flexibility policies that shorten work hours and schedules in hopes of retaining mid-career employees.
Sabbaticals are likely to become more common.
And working from home will likely remain an option.
Job sharing, where two people share a job, gained some popularity in the early 2000s. This could be a solution for people looking to spend more time with their families as they approach midlife and retirement.
Delaying the starting age for Social Security:
The federal government is discussing the possibility of delaying the age at which people begin receiving Social Security benefits. Extending our lives puts a significant financial burden on the system, as benefits are paid for many more years than contemplated when the guidelines were created.
By raising the starting age from 62 to an older age, the government would encourage people to work longer while keeping the program solvent.
Less work:
In the future, fewer people may be needed to keep commerce spinning. The McKinsey Global Institute predicts that by 2030, a quarter of employees will lose their jobs to automation.
Proposals to combat a future with fewer jobs include universal basic income and shorter work weeks, such as 30 hours instead of 40. Therefore, your years of service may be longer, but your hours per week may be shorter.
Self-employment:
According to the analysis of forbes magazine, the self-employed class is exploding. Whether this is due to the pandemic or a more general trend remains to be seen, but gaining control over one’s work could be a viable solution to long-term burnout. There is a gender.
And it turns out that over 50 is the best time to become an entrepreneur.
Improving financial literacy:
One of the goals of financial literacy is to help people understand how to finance themselves without continuing to work throughout their lives, especially until they die.
Longer lifespans require people to become more financially literate.
How can you do that? NewRetirement Planner is a personalized tool to help you manage your money. NewRetirement is not about one “correct” answer. We focus on what’s right for you: your values, resources, and goals.
About NewRetirement
NewRetirement is a financial planning platform that gives people the ability to discover, design, and manage their personal path to a secure future for those who want to define their choices today and their financial security tomorrow.
Our goal is to make high-quality, low-cost financial guidance available to everyone. Today, over 200,000 people with over $200 billion in assets trust this system to get the most out of their money and time. The platform can be co-branded or white-labeled for partners. Additionally, the company provides API access to companies that want to embed planning functionality within their sites.
