| Retirement is heading for an extreme makeover. |
| The baby boomer generation has changed the perception of every life stage as they have reached it. |
We now read about fifty something?s being the "new teenagers". Another, less generous, way of looking at it is that the baby boomers have simply never grown up. Spending and living for today has been one of the hallmark traits of the post-war baby boomers.
Which poses the question of how they will change the notion of retirement - and retiree attitudes - when they begin arriving at that life stage in large numbers in the next 10 years or so. Certainly, no-one is expecting them to pull on the cardigan and slippers and curl up with a good book while waiting for a weekly visit from the grandchildren.
At this point in time baby boomers - those people born between 1947 and 1960 - are largely in the accumulation phase when it comes to superannuation and retirement savings. But what will it mean when they farewell the monthly or weekly paycheck and enter the world of dissaving.
Dissaving is one of those ugly words the investment industry invents to describe a perfectly normal event - you have done with saving and have begun spending the money you have put aside for your retirement lifestyle.
Super is really lifestyle on lay by. The government gives you tax concessions to save via super but locks it up so you can not touch it until you stop work.
When you formally hit retirement you get instant membership to the disssaver club. Your super really does become yours.
There is no law which says you have to spend your super but after the paychecks stop coming something has to pay the bills and after all that is super's purpose in life.
In 2005 our concerns are focussed on whether people are saving enough - most are not - and what it will take to get the baby boomers attention and start socking away some serious money into super.
But look out to 2015 and the landscape may be quite different. For a start investors will fundamentally shift from looking for growth investments to needing more income.
Consider how the media may respond to an interest rise in 2020. If a big part of their audience is more concerned about the interest rates they are earning rather than their mortgage repayments, we may find front pages of newspapers urging the Reserve Bank to lift rates again to help boost the lifestyle of the poor old baby boomers.
Fixed interest investments - and the steady income streams they throw off - could displace dinner party conversations about shares and property and dissavers will appreciate the value of liquidity like never before. Property investors will agonise over sell decisions because of the big lump of cash it will release - and what it will do to their pension and medical entitlements.
Part-time work is also set for a makeover - particularly if dissaving has been embraced a little too enthusiastically in the early retirement years.
The simple reality of the baby boomers retiring in big numbers will create a skills shortage meaning employers will have to fit around the new "retiree lifestyle".
The argument for part-time work is certainly powerful in terms of stretching your super savings.
The only thing that is certain once the baby boomers begin storming into retirement is that they will change the way society looks at retirees.
In fact given the marketing industry's ability to develop new, more exciting labels for the different stages of baby boomers' life, the entire notion of retiree may become redundant.
10th-June-2005 |
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