The End of Retirement As We Know It?

Olivier-Le-Queinec / Shutterstock

As Chairman of the Milken Institute Center for the Future of Aging, Paul Irving wonders if retirement actually makes sense today. BlackRock asks: Is it time to change the retirement conversation?

For those of you who have ever considered an encore career, did you ever think your next job would be in retirement research? That’s what happened to Paul Irving. After thirty years as a corporate attorney and CEO of a large law firm with roots in the financial services industry, he says, “I fell into a project having to do with aging and I just fell in love with the subject.” That project ignited a new passion and inspired him to launch his own encore career.

Today, Irving is the Chairman of the Milken Institute Center for the Future of Aging and Distinguished Scholar in Residence at the University Of Southern California Davis School Of Gerontology. He believes we need a new conversation about the benefits and costs of retirement for individuals, businesses and the broader society—and wonders if the word retirement makes sense in the 21st century. Here are a few of the topics we discussed.

The title of your book, The Upside of Aging, is more positive than we usually hear about the impact of longevity. Are perceptions shifting?

We’re at the early stages of building a movement and there’s increasing understanding about the upside of aging and the possibilities for older adults. But we have a long way to go. You still hear a lot of negative metaphors, such as “Silver Tsunami.” Populations are aging rapidly in the United States and elsewhere due to increasing longevity and lower birth rates. While aging brings the risks of financial insecurity and the challenges of disease, awareness of the opportunities associated with our longevity dividend is growing. We have a real chance to spread the conversation about a new way of thinking about aging. That’s very much what we’re involved in every day.

What’s wrong with the current conversation about retirement?

You still see it on television commercials, older couples who look like former models on some beautiful beach. That’s not a realistic expectation for most people and it’s not good for our society. So let’s just stop. It’s not an accurate picture today, and it likely never was. Let’s start a conversation about what people’s lives are really about. Research confirms that most people want to age in place and at home. They want the opportunity to continue to work and learn. They want meaning and purpose and joy in their lives. They have a desire for continued contribution, to stay connected and relevant, and to be respected.

What should be included in the new conversation about retirement?

I’m not sure that retirement is a notion that makes sense anymore. I don’t think most people will retire in the current sense of removal and disconnection from what they’ve been doing in their careers and communities. A better way to think about it is as a “shift”. It’s a shift, a change, a transition, a transformation.

Is that new conversation why the Milken Institute’s “Best Cities for Successful Aging” report is about successful aging rather than retirement?

That’s right. It’s not a retirement guide. It’s intended to recognize the reality that a majority of older adults expect and intend to age in place. Our focus is not how one lives in a beachside retirement community with a rec center or a nine-hole golf course and a cafeteria. It’s about remaining in community, with access to great healthcare and education, lifelong learning, the opportunity for continued work, ongoing connection with family and friends and faith and all the other things that enable the full kind of life that we now hear consistently is the kind of life the current generation of older adults seeks.

Do communities reap the benefits from being great places for aging?

There is increasingly broad-based recognition that keeping older adults healthy, engaged, able to work and productive is not just good for them, it’s good for the broader community. Younger people get the benefits of mentorship and companies are recognizing the strength of intergenerational teams. It goes beyond that. Infrastructure investments to support aging in place also benefit the young. I live in Los Angeles. We’re finally making meaningful investments to build a great transit system. I may not enjoy the full opportunities of those investments in my lifetime. But I’m happy we’re making them. The next generation of older adults in the city will benefit from a fully evolved spectrum of transit options. And, in the nearer term, we’ll see other outcomes of infrastructure investment, like a healthier economy, better employment rates, and a whole series of associated characteristics of a safer, more prosperous and increasingly connected city.

How do we get the new conversations started?

The financial services industry is a critical delivery system for the new conversation about aging. It’s an industry that reaches into people’s lives and families—where this conversation is increasingly being held. It can help with new ideas and new messages. There’s already been a lot of focus on this conversation about aging at the senior levels of many financial services companies. The challenge is breaking through legacy formulas and practices and building awareness and understanding in the ranks—in the sales force and others who are interacting with clients and customers on a daily basis. Financial advisors want to do the right things for their clients. But circumstances have changed. Motivations and objectives have changed. With longer lives ahead, conversations about financial security and financial expectations are much more complex today than ever before.

What should they be talking about?

We know from polling data that most baby boomers don’t expect to retire at 65, much less earlier. People are working longer and expect to work longer—some because they want to, many because they need to. And that leads to different conversations about how people should be planning their lives. Let’s say that at 55 someone is interested in doing something else. Shouldn’t they be able to use some of their “retirement” money for a sabbatical, to return to school or to start a new business without paying a penalty? Investments like these could improve their skills, their health, their confidence and their productivity. That’s good for the individual and a benefit for society at large. Aligning our systems with the new realities will require bold thinking and action, and revision of laws, regulations, policies and practices. But change is needed and it’s time for all of us to join this conversation about the future of aging and retirement for the benefit of today’s older adults and of aging generations to come.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of August 2015 and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader.

This is intended for general information only and does not take into account an individual’s financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decision.

©2015 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries. All other marks are the property of their respective owners.