Somewhere in a hospital near you, a baby was born today.

Chances are that the trajectory of their life is going to play out very differently to mine and yours.
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Back in my day, some people graduated from university and went straight into employment.

The child born today is unlikely to do that. Young people often start work significantly later nowadays, completing several degrees (“why not?”), travelling post-university or taking a couple of years doing casual work before they get serious about their careers.

Once this child does start working, there is a good chance that their career will not follow the same straight line that was once considered standard.

In 1975, the average life expectancy was 75. Most people worked for the same company their entire working life, retired at 65 and then collected their pension (often a final salary pension) for a decade or so.

But a child born today has a 50% chance of living to 100.

They are going to work for a lot longer, switching between many jobs. They may even switch between several completely different careers.

Perhaps they will take time off, mid-career, to retrain or to travel. They may take ‘adult gap years’ just because… they can.

And they may never retire in the traditional sense. They may continue some form of work well into their 70s and even 80s.

As you can imagine, today’s baby will, in the future, need to manage their finances quite differently to the way you did, when you started your career.

And so do children born 20, 25 and even 30 years ago, because many of these trends are already happening.retail-education

It’s not a question of just saving up for a much longer retirement. They need to save up for mid-career breaks, for mid-career switches, and potentially for additional degrees or training and travel.

The reality is that a longer life requires greater planning and more money.

That’s why, if you have adult children and grandchildren, it’s worth talking to them now about how they picture their career path

It doesn’t have to be a heavy conversation, but see if you can get them thinking about the changes in the way people work and retire, and what this might mean for them.

  • How do they visualise their working life, and even retirement?
  • What do they actually want?
  • And what are the financial implications?

They are unlikely to have clear answers, and any answers they do have will probably change with time.

It doesn’t matter.

Just get them thinking about it. Plant the seed.

Their future selves will thank you.
 

Posted by Peter Selby

Topics: Insights & Advice, Retirement

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