To some people retirement means being a youthful 70-something with a wonderfully fulfilled life spending sun-soaked and carefree years strolling along idyllic beaches or playing golf. Wining and dining nightly at the best restaurant, all while maintaining the youthful physique of a healthy 30-year-old.
But this is surely a modern myth dreamed up by marketing people. Maybe some people do end up leading such lives, but I doubt many do or would even want to.
To many people the reality of retirement is likely to be more about coping with the chronic pressures of everyday life that never go away, but simply change over time.
Pressure relating to money and finances; pressure relating to children struggling with their own circumstances and worries; pressure relating to their grandchildren and their health and wellbeing; and, for many, pressure supporting their ageing parents as they reach their final years.
And financial pressures don’t magically evaporate the day you stop work and start drawing your pension.
Retirement is, and always has been, about income streams. When we are young it is fairly easy in our society to sell our time in return for a regular income.
One retirement strategy some people follow is to carry on selling their time and effort as they age by simply carrying on working. There is much to be said for that, but not everybody is able to physically carry out working tasks as they reach old age, so it is not possible for everyone to expect to do that.
People reaching their late 60s these days receive regular income from the state in the form of a state pension. That is an income stream most of us can rely on, but the realities of government finances mean it is more like a trickle than a stream. Worth having, but barely enough to live on.
The single most useful income stream working-age people can engineer for their older selves is a pension. By putting serious amounts of money aside while they are working people can ensure they will likely be more able to cope with the financial pressures that will confront them in their post-working years.
A pension scheme operated and contributed to by employers is demonstrably the best way to instil the discipline necessary to both encourage and help people regularly defer income in favour of long-term savings. That’s why the recent auto-enrolment reforms were, and are, so important.
Steve Bee is director at OpenMoney Benefits.