Introduction
The financial services industry often paints a grim picture of retirement, particularly for those without pensions. The narrative usually revolves around “cliff-edge retirements,” a term designed to induce fear and, consequently, encourage asset management services that come with fees. However, when we put the consumer first and integrate financial planning, technology, and advocacy against financial exploitation, a different, more hopeful landscape emerges. This article explores a retirement planning strategy that leverages productive assets and entrepreneurial opportunities to create sustainable livelihoods. We also incorporate findings from McKinsey Health Institute’s research on healthy ageing.
The Consumer-Centric Approach
When contemplating growing older, most people wish for physical and financial independence, engaging activities, and closeness with loved ones. The question is, how can every older adult, irrespective of their country or socioeconomic status, achieve these goals?
McKinsey’s Perspective on Healthy Ageing
According to the McKinsey Health Institute, healthy ageing is defined as maintaining “functional capacity”—the ability to live daily life without undue pain or fatigue. Their survey of over 21,000 adults aged 55 and above in 21 countries revealed five key factors contributing to health and functional capacity: having a purpose, managing stress, being physically active, interacting with others, and participating in activities beyond the home.
Bridging the Gap: Financial Planning and Healthy Ageing
- Identify Productive Assets: Whether it’s real estate, a small business, or investments, identifying and leveraging productive assets can provide a steady income stream, fulfilling the need for financial independence.
- Leverage Entrepreneurial Opportunities: Older adults are often rich in experience and wisdom, invaluable assets in entrepreneurial ventures. Starting a small business can provide financial security, a sense of purpose, and community engagement.
- Advocacy Against Financial Exploitation: Utilising technology to educate and protect against financial scams can preserve one’s hard-earned assets.
- Community Engagement: As per McKinsey’s findings, involvement in community programmes or even part-time employment can enhance functional capacity and overall well-being.
The Economic Potential
McKinsey estimates that older adults who want to work but are not currently employed could contribute up to $1.7 trillion in incremental annual GDP. This is a significant untapped resource that could benefit not just individuals but society at large.
Case Studies and Real-world Examples
In Hanoi, the NGO HelpAge International established Intergenerational Self-Help Clubs where older people gather to make decisions about community contributions. These clubs have provided microcredit loans to over 300 members and have significantly increased community unity. “After joining the clubs, most members report that they feel happier, wealthier, and healthier, and they feel more empowered and confident.”
Conclusion
Retirement planning doesn’t have to be a one-size-fits-all model focused solely on pensions and asset management. By integrating financial planning, technology, and a focus on functional capacity, we can create a more holistic and hopeful picture of ageing—one where everyone has the opportunity to live a fulfilling life.
And, https://academyoflifeplanning.blog/2023/09/21/unlocking-the-full-potential-of-older-adults/
Academy of Life Planning 