Retirement is being rejected by a new breed of wealthy worker, who want to carry on working for as long as they are able, said Barclays Wealth in its latest Insights report titled “The Age Illusion: How the Wealthy are Redefining Their Retirement.” The report shows that HNWIs (high net worth individuals) in Saudi Arabia (92 percent), United Arab Emirates (91 percent) and Qatar (89 percent) illustrated the biggest desire amongst global respondents to keep working in later life. The research further shows that while GCC HNWIs are the most enthusiastic about working later in life, the “Nevertirees” are a global phenomenon. The concept is popular, but to a lesser extent, with the UK (60 percent of respondents) and US (54 percent) showing a desire to carry on working. Switzerland (34 percent), Spain (44 percent) and Japan (46 percent), on the other hand, are the least likely to continue working post-retirement age. To some extent, this can be explained by age differentials - 59 percent of millionaires in the emerging markets are under 45, compared with just 16 percent in Europe and 21 percent in the US. GCC respondents' desire to keep on working may also reflect different social attitudes to the concept of retirement itself. Europe has now had five decades or more to adapt to the concept of provisioned-for retirement at around age 65. In contrast, this concept does not have deep roots in the Middle East region. Soha Nashaat, chief executive of Barclays Wealth Middle East, said: “This represents a step change for wealthy people. Whilst previous generations looked to create their wealth early on in life with a view to enjoying it when they retired, this report reflects a different attitude, with people wanting to continue to challenge themselves well beyond the traditional retirement age. Indeed, many Nevertirees prefer to be actively engaged and challenged and are not bound by their age with regards to continuing their working life.” Sixty percent of wealthy individuals polled in the global survey say that they plan to become a Nevertiree, shunning traditional retirement, instead of continuing to work, start businesses and take on new projects in their later years. The findings show that the concept of Nevertirement is expected to grow in popularity over the coming decades, with over 70 percent of respondents under the age of 45 saying that they will always be involved in some form of work. The report also identifies GCC HNWIs as the most concerned about succession planning compared with the rest of the world. Nearly 100 percent of respondents in UAE and Saudi Arabia feel financially responsible for their children. For example, a majority of respondents in the GCC indicated that they wish to leave a sizeable amount of their wealth to their children when they die. HNWIs in the region also mentioned that their next generation will live wealthier lives than theirs, and they are encouraging their children to make their lives a success. The research also shows a trend for the very wealthy to feel more financially responsible for their children than other wealth groups - notably almost all HNWIs in Qatar (94 percent) and the UAE (91 percent) agree that passing on their wealth to the next generation is important. On the other side of the spectrum, wealthy individuals in developed economies do not feel that they are financially responsible for the next generation, with Switzerland (38 percent), Japan (41 percent) and the US (44 percent) at the bottom of the list. The survey also reveals that GCC HNWIs want their children to have a better understanding of their money, which may explain their visible trend of active portfolio engagement in later life. As earlier Wealth Insights report titled “The Changing Wealth of Nations”, the GCC's HNWIs are most actively involved in managing their portfolios. The study showed that HNWIs in the GCC spend a ‘significant' amount of time managing their portfolios, in comparison to other nations. The new study suggests that this trend extending to later life. “Even though many people may continue to work well into their later years, they should not shy away from succession planning. In many cases a longer working life means that people should make decisions about succession planning much sooner,” Nashaat added. Wealthy individuals living in developed countries are less optimistic about the prospects for their children than those in developing economies. Just 35 percent of respondents in the UK and 26 percent in Switzerland feel that their children will be wealthier than them, while 80 percent in Saudi Arabia and 73 percent in India are confident that their offspring will increase the wealth of the next generations. But, while working longer may make many wealthy individuals feel financially more secure and more personally fulfilled, it also raises a number of challenges for individuals, their families and society as a whole. The critical issue for wealthy individuals who choose to decline a traditional retirement is that they do not defer the process of assessing finances, business interests and succession planning that would traditionally have taken place approaching retirement age. – QJM Ongoing discussion, both within families and with advisers, is critical. Those who choose to work longer must still consider whether there is an optimum time for them to relinquish their business interests, or a need to change further the framework of their working lives. They must also consider the timing of and rationale for transfers of wealth within their families. While there is no universal, optimum solution for saving and succession by the older, working wealthy, there is no substitute for thinking hard about how best to approach these issues. Even if old age is still out of sight, it should not be out of mind.
