Flexible retirement is becoming more common as more retirees choose to work part-time in the gig economy.
According to a new report from Abrn, two-thirds of people retiring in 2022 do not plan to give up their jobs completely.
That compares to just over half of those who retired in 2021 and a third of 2020 retirees.
The report, which surveyed 2,000 UK adults, reveals how the ‘class of 2022’ plan to spend their money in retirement.
A quarter said they would work part-time at the same or a new job. One in six said they would continue to work for their own company.
Just over one in ten plans to become an entrepreneur and start their own business.
The main reasons cited for flexi-retirement are the need for income for 31% of respondents and the need for care for 32%.
Colin Dyer, Client Director of Abrdn Financial Planning, said: “Gone are the days when everyone had a fixed date or fixed age when they would never work again.
“The emerging trend of ‘flexi-retirement’ for financial reasons, or simply to keep busy, is here to stay. The Class of 2022 defies the norm and does what works for them.
“Hearing why retirees are choosing to work really underscores the importance of taking a holistic approach to retirement and how sensitive plans can be to external issues, such as the skyrocketing cost of living or the pandemic.”
The report also identified how prepared the Class of 2022 is for what’s to come and how factors such as the rising cost of living and the pandemic are affecting their plans.
Only a quarter of retirees this year feel very confident that they have saved enough to fund their retirement. It compares to 30% for the class of 2021.
A key factor in this decline in confidence is the rising cost of living. More than a quarter said they don’t know how to mitigate the impact of inflation on their retirement income.
When it comes to financing their retirement, one in five people will use their public pension as their main source of income.
For others, their main source of income will be as follows: 15% savings and investments, 13% defined benefit/final salary pension, 12% private pension and 12% defined contribution occupational pension .
When it comes to discussing retirement, the Class of 2022 most often turns to partners, children, and friends.
Yet less than a fifth have sought advice from a professional advisor about their retirement plans.
In fact, only 28% of the Class of 2022 who are considering cutting hours or getting a part-time job in retirement have taken financial advice about the decision.
Only a quarter are aware of the potential tax implications of being able to dip into their retirement while continuing to work and save more for retirement.
One in ten have not told anyone about their intention to retire this year.
Dyer added: “Working in retirement can have wider financial implications, all of which need to be planned for. It may sound complicated, but this is where preparation and discussion with an expert can help.
“A financial adviser can help assess what people need to think about and what action to take – ultimately giving them the confidence to pursue their plans to secure their future in a way that works for them.”
Additionally, 72% of the Class of 2022 will move in retirement, including 19% who will be looking to be closer to family. About 31% will downsize to free up space or make money.
City living remains a popular choice for retirees with 23% wanting to retire in a city. In addition, 15% plan to go abroad after retirement.