Every morning I wake up to a WhatsApp message from my mum letting me know what country she is in. A couple of weeks ago, she, aged 83, met up with my aunt, in Istanbul. Now they are backpacking their way home to London by bus and train.
They had intended to book transport and accommodation before they set off. But then they thought – nah, where’s the fun in that? ‘What if we like somewhere so much that we want to stay for a few days?,’ my mum said. So instead, they are booking places as they go on their phones or when they arrive at their next destination. So far, they’ve found a great Armenian restaurant in Sofia, Bulgaria, enjoyed the bus to Nis in Serbia, and loved walking around the Plitvice lakes in Croatia. They’ll come home when they feel like it.
Meanwhile, I’ve been at work receiving the usual stream of reports, surveys and commentaries about pensions and retirement. And I can say, hands down, I’ve learned more about retirement from my mum’s backpacking adventures than all of them put together. Much as I’ve enjoyed the National Annuity Day press releases and the retirement perception gap reports, nothing beats the lessons from real life.
The first is that your retirement is unlikely to fit the stereotype. Considering how many retirees have no interest in ‘putting their feet up’, it’s extraordinary how bad we are at letting go of these old cliches. Sure, some people prefer or need to take it easy when they stop work, but plenty don’t. It’s time to wage war on the ubiquitous depictions of retirees sitting next to gas heaters, patronising references to ‘twilight years’ or – my mum’s bete noire – older people being depicted merely as a pair of wrinkly hands.
Representation is important. For this reason, it might be harder to achieve the lifestyle that’s right for you if you’re surrounded by images and language that you simply don’t recognise. And perhaps some people might find themselves influenced by this and end up downgrading their aspirations to what society expects of retirement.
Equally, someone who is planning a model of retirement that breaks away from the perceived norms is probably going to need a different type of financial plan. Financial advisers often talk about the so-called ‘smile curve’ if you were to plot retirement spending on a graph.
According to this model, costs start high in early retirement when you’re fit and active, then fall gradually as you spend more time at home before rising again should you need care later in life.
But if people are travelling and out having fun in their 80s, they might be smiling, but their spending pattern is not.
This relates to the other important takeaway: a large pension is not the only answer. Having sufficient funds to do what you want to in retirement is important. But accumulating these sums is tough – and millions are unable to save as much as they’ll need. But it doesn’t have to be the end of the story if you’ve not achieved this by retirement. My mum still does occasional work, helping to pay for adventures and providing satisfaction in itself.
The pensions industry neatly divides life into ‘accumulation’ and ‘decumulation’ phases, but it’s frequently messier than that – whether by necessity or choice.
Over a million over 65s are still in work – many because they have to, and plenty because they enjoy it.
Besides, money is not the only thing you’ll need. This trip will not cost my mum and aunt a fortune because they’re thankfully in good health. That means they could afford to catch a bus that takes longer if it’s cheaper, or stay in basic accommodation sometimes. If they were in poorer health, everything would be more expensive – not to mention the insurance.
This leads on to the final lesson: preparing for retirement is about more than building wealth. We put so much emphasis on saving, but staying healthy and nurturing both friendships and interests are surely just as important. What’s the point of a large pension pot and having more time to spare if you don’t know what to do with either.
For some, retirement is the perfect opportunity to finally have that trip of a lifetime or to spend time on things other than striving to make a living.
But, it looks to me like all this is much harder to do if you’re starting from scratch. Far better to limber up for it.
My mum’s always enjoyed an adventure so inter-railing in her 80s is no leap. But if she’d put off travelling or doing what she loved until retirement, I’m not sure she’d have the confidence required to do it now.
That’s what their experience has taught me so far. Now I can’t wait for my mum and aunt to get home to hear what they’ve learned.