A new global report says the wealthy want to carry on working, not retire. According to the latest Wealth Insights report, The Age Illusion: How the wealthy are redefining their retirement, released by Absa Wealth (an affiliate of Barclays Wealth), 60% of global high-net-worth individuals will “never” retire.
The report looks at the attitudes of 2 000 high-net-worth individuals in 20 countries all over the world – and interestingly, wealthy South Africans are the world’s most confident when it comes to their financial security. These same South Africans also top the rankings as the most optimistic about retirement.
“These South Africans see retirement as the best years of their lives,” says Absa Wealth managing executive Nomkihta Nqweni. SA was followed by Australia and the United States in terms of retirement, with 25% of respondents in agreement. By contrast, 2% of Saudi Arabians, 5% of Latin Americans and 8% of the Swiss think retirement will represent their best years.
The report also highlighted sociological shifts in attitudes towards retirement – long perceived as the time in your life when you kick back and forget about work. About 60% of wealthy individuals polled say that they plan to become a “neveretiree”, shunning traditional retirement. They expect to continue working, start businesses and take on new projects in their later years.
South Africans (89%) said they want to keep working in later life, after other emerging markets such as Saudi Arabia (92%) and the United Arab Emirates (91%). The concept’s also popular in developed economies, with the UK (60%) and US (54%) showing a desire to carry on working. High-net-worth people in Switzerland (34%), Spain (44%) and Japan (46%) are the most likely to want a conventional retirement.
“The findings show that the concept of ‘nevertirement’ is expected to grow over the coming decades, with over 70% of respondents under the age of 45 saying that they will always be involved in some form of work,” says Nqweni.
When respondents were asked about their financial status, South Africans were the most confident in the world about their financial security with 65% of respondents certain that they are financially secure. This was ahead of other confidently wealthy people in Spain (63%) and India (55%).
Succession and inheritance
Wealthy respondents living in developing economies feel a greater sense of responsibility for, and plan to give considerably more to, the next generation. Economies such as the United Arab Emirates (98%), Saudi Arabia (95%) and South Africa (80%) say that they are financially responsible for their children. However, on the other side of the spectrum, wealthy individuals in developed economies don’t feel that they are financially responsible for the next generation, with Switzerland (38%), Japan (41%) and the US (44%) at the bottom of the list.
“These contrasts are particularly interesting when compared with their views about the prospective level of wealth held by their children,” says Nqweni.
Just 35% of respondents in the UK, 28% in Spain and 26% in Switzerland feel the next generation of their family will be wealthier than them, compared with Saudi Arabia (80%) and India (73%), who show far more optimism about the prospects for their children’s wealth. Respondents from developed countries don’t seem to be planning to counter this by passing on a significant portion of their wealth to their children, while those in developing countries are potentially giving their children a head start.
One of the risks is that neveretirees may not bother with succession planning, because they’ll still be working beyond retirement age.
Traditionally, retirees make plans for their family’s wealth – but the neveretirees seem less concerned.
New attitude, new career, new role
The wealthy are also using the later years to re-examine their options with regard to work, looking for different careers and positions, often moving from the role of execution and control to that of influence.
Sarah Harper, Professor of Gerontology and director of the Oxford Institute of Ageing at the University of Oxford, said: “People want to contribute, they want to be doing something. Work gives people status, and at an age when you’re incredibly experienced you may want to start a second career or even do something completely different from your previous professional life.”