Older people generally are looking younger, staying healthy, working longer and rejecting thoughts of retirement — a life stage that is an outdated concept born in the 20th century to serve the Industrial Revolution.
These are among the findings of a new study, Forerunners Report, by the University of Cape Town’s Liberty Institute of Strategic Marketing, which shows that middle-class South Africans are no different to their counterparts in places such as Europe and the United States where people are staying economically active for longer, redefining ageing and reshaping consumer behaviour.
The report found that as life expectancy increases, the number of people in this age group is also rapidly rising and many are reimagining traditional models of retirement.
The 18-month study included a survey of 1 900 people and more than 300 interviews using quantitative and qualitative research methodologies.
“Through our research, we found that middle-class South Africans want to remain active, with many continuing to work both out of choice and necessity.
“Interestingly, we also found that 64% of middle-class individuals aged 55 to 60 have children living at home,” said Paul Egan, a managing consultant at the institute and the report’s co-author. “This means that the empty-nester stage, when adult children become independent, appears to be happening later in many cases, leading to parents bearing financial responsibility for a longer period.
“At the same time, the study found that nearly two-thirds of middle-class individuals aged 55 to 60 expected their financial position to improve over the next five years. This is likely connected to an anticipated ‘windfall’ when financial responsibility for children ceases.”
According to the study, the number of adults over 55 has grown to more than eight million, making it one of South Africa’s fastest-growing demographic segments, with an aggregate taxable income of more than R600 billion annually. This segment is expected to continue to grow and its income trajectory to continue well into the future.
Andrew Scott, author of The 100-Year Life, who is cited in the study, said that in the United Kingdom and the US “a 75-year-old today has the same mortality rate as a 65-year-old from 40 years ago. So, 75 is the new 65”. It’s a notion supported throughout the research and by independent analysts. The study also found that 52% of middle-class people under 55 expressed a desire to live beyond 90.
Co-author James Lappeman said research shows the health benefits of being productive and purposeful into older age, which also fuels the desire to continue working in some form.
“Purpose was a major theme from our research and many people find much purpose in work. Many participants in the study, however, did express the desire to work on less restrictive terms than their corporate jobs had allowed,” Lappeman said.
But there were also financial factors fuelling a “necessity” to work longer for some.
“With life expectancy increasing, a cost of living crisis, children staying financially dependent longer and often under prepared finances, many are looking to extend their income generating years,” he said.
“Those that are able to keep their careers beyond traditional forced retirement ages often do. This could be in the form of contractual arrangements or consulting. South Africans are also prolific at side hustles, often started before official retirement. Another important income source is using paid-off assets like property to earn rental or AirBnB income.”
Lappeman said the tension between youth seeking employment and older South Africans staying employed for longer is “somewhat mitigated” by the skills shortage and the need for these in economic development.
Liberty’s executive for experience and journey management, Kroshelan Chetty, said one of the key findings of the research is that the “traditional approach of a ‘three-phase life’, where you spend the first phase getting educated and then transition into working and earning followed by a final phase of retirement from work with financial independence, is no longer relevant”.
“Conventional thinking around ‘preparing for retirement’ was based on a construct that is no longer relevant so there is an opportunity for people to rethink their planning as they shift into this next phase of their lives,” Chetty said.
“The research found that people enter this phase along three distinct trajectories — one where you are able to maintain your current lifestyle, one where your lifestyle deteriorates steadily, and one where your lifestyle improves … People will experience retirement differently due to two key lifestyle drivers — health and resources.”
He said the notion of retirement was borne out of a need to drive efficiencies in factories during the Industrial Revolution more than 100 years ago, when older workers were perceived as slowing down production lines.
“This has shifted significantly and we now live in a world where knowledge workers play a critical role and one where technology has been an enabler of productivity and economic growth. This along with the fact that people are living longer, and remaining healthier for longer, has contributed to South Africans choosing to work longer,” he said.
Marilyn Hallett, founder and director of digital platform You’ve Earned It (YEI), which showcases information, jobs and benefits for those over 60, said the global trend dubbed “The Great Unretirement” was top of mind for many over 55.
“YEI ran a series of surveys earlier this year in which 75% of respondents indicated that they would choose to continue working past the traditional retirement age, in either full- or part-time or temporary or job-share employment or in encore careers or entrepreneurship opportunities,” Hallett said.
“It is said that only 6% of South Africans can afford to retire. Research shows that the majority of South Africans only start saving for retirement over the age of 40 which does not leave enough years to build a substantial nest egg for retirement.
“We all know unemployment is a huge burden on the economy. In addition, ageing is often seen as a burden to the economy. The retirement age needs to be done away with and seen as a source of opportunity.”
Hallet believes that over 55s who are making a contribution to the productivity of an organisation will enable their dependents, many of whom are unemployed, to enjoy greater financial security. And organisations will be stronger when they allow long time employees to use their experience, skills and institutional knowledge to mentor younger people.
“Fifty-five pluses are deemed to be one of the highest contributing sectors to society. Longer lifespans will revolutionise the way we live, offer incredible new opportunities and require change in the way organisations think about employment,” she said.
Founder of Refinement Network and 50Plus-Skills, Lynda Smith, a social entrepreneur focused on the future of ageing and longevity, agrees there is space for older and younger people in the workplace.
“At the age of 50, I found myself at my own crossroads. I was divorced with both children married and living internationally. The company I was working for as national sales and marketing manager was bought out and the company moved from Gauteng to Cape Town. I felt a deep hole of despair and lack of purpose,” Smith said.
She was doing consultancy work with TomorrowToday Global and Graeme Codrington suggested she look at the trend of longevity and technology and how this would affect the 50+ generation in South Africa.
“This was in 2007, 16 years ago. The trend is only now becoming something that is impacting more people,” she said.
Smith set about building a skills bank of older, experienced individuals who could become involved in projects to help build South Africa.
“We are not a recruitment company. We believe that there are many ways to work in this season, but everyone is unique and must navigate what this means.”
She said that while older people with scarce skills are more likely to find work, there are many ways to find jobs locally and internationally, such as through providing consulting and mentoring services, starting side hustles and offering child related services to young professionals.
Smith’s golden retirement tip: “My personal mantra is to grow my investments to 70, earn enough to support my simple budget, be debt free and then buy retirement products in my 70s. That means my investments have grown for 10 more years and I have 10 less years to draw down if I start at 70 instead of 60. I call my life a portfolio of some leisure time and two or three projects where I earn.
“Work also brings purpose and a reason to get up daily. I call this financial and social sustainability. Mentally fit and financially strong,” she added.
Lappeman doesn’t foresee this global unretirement trend changing as the over 55 generation harnesses their skills coupled with technology to remain productive.
“The 20th century model of retirement is being rejected. This is also coupled with South Africa’s first wave of black middle-class retirement over the next few decades. As the Black middle class ages, they are rewriting the script and have a deep desire to create generational wealth. This desire is fuelling the need to stay productive long-term.”