I live in the UK, and the current state pension system is not very long-term self-sustaining. There are strong beliefs that if the current state pension system is not looked at, and changed, the system won’t exist in maybe 30 years or so. [Reference - yes I did my research]
So, my hot take doesn’t seem so crazy if you consider that there may not be a state pension system to support the current younger millennials/older gen z workforce in retirement, let alone future generations after them.
Gif by kking-blobb on Giph
I can’t tell you what to do, but here are the things that go on in my head:
The retirement age currently is 66 (rising to 67 in 2028).
This is most likely to increase during my working life, due to the increase in aging population. People are living longer, which means they rely on more state pension pay outs, than in the past.
There is concern that the state pension may not exist by the time I retire, so I need to ensure I have money to look after myself.
According to the IFS (Institute of Fiscal Studies), the current system (which increases state pension each year by the highest of inflation, average earnings growth or 2.5%), is just about enough to keep most people out of income poverty. (i.e. there are people currently not earning enough money from the pension system to survive). It also states that for households that are above the income poverty line, the pension is not enough to live comfortably, or provide a standard of living they had when they were earning an income (yikes).
Living to see retirement IS NOT a guarantee for ANYONE.
The way society has encouraged us to think “Oh I will just work, until I retire and then I can reap the benefits of my literal labour”, as though reaching the age of 67 is guaranteed for everyone is a crazy assumption. Our time on earth isn’t guaranteed (grim), so why work towards the assumption that you will see it through (sorry, that’s also a grim image, but I think it’s better to have a slightly realistic grip on reality, rather than just following blindly the dream they have fed us, but can’t promise/give us).
How I deal with that grim potential reality:
The government are encouraging people to invest in Stocks and Shares ISAs – the whole point is that this money is all yours AND tax-free. And you can access it anytime, but ideally, you’re better off withdrawing from it after a long time of investing. It relies on market fluctuations, so when the market is high, your money will grow, but it can also make a loss if things are rough (like the whole USA – Iran situation we got going on).
I still go to work and pay into my pension – even with doubts with the system, we don’t actually know what the government might end up doing to it. So, in the hope that they fix the system by the time I retire, at least there is money in my pension pot, and I am making the most of my contract and getting the employer match.
I am making the most of every day living – whether I am doing hobbies, learning new skills or just connecting with the people in my life. My time is not guaranteed, and I don’t want to live a life of “Oh I can wait till retirement to do that”, because time isn’t promised. I think it would be cool to get a few years of retirement in my late 30s/early 40s, (and extend how long I work beyond my retirement age) just so then I can make the most of my life. I feel like employment sabbaticals might be the way forward, or else with the rising pension age, we will all be working until we pass, which is an even more grim reality to me.
Weekly reflection
“Yesterday is history, tomorrow is a mystery, but today is a gift. That is why it is called the present”
~ Master Oogway Kung Fu Panda
Have a lovely weekend,😊😊
Rue
Adulting For Life
