The majority of millenials won’t probably ever retire, and they’ll find the whole concept of everyone stopping working at a certain age to be out-of-date. There are two reasons for this, though, none of the two is the pretense that developed economies couldn’t sustain pension schemes. The first reason is, millenials’ expectations for work is different than the ones of the previous generations. The second reason is the fact that work in the future will be different from what it largely is today.
Millenials have different expectations for work
For years there has been debate about whether or not developed economies can afford having the kind of pension schemes for millenials that the previous generations have built for themselves. The short answer to this is probably “No, not with the current sort of politicians in power”, but stating the obvious misses the whole point of reflecting whether contemporary pension schemes will be needed in the first place. The current retirement ages in the EU vary between 58 and 67 years of age and they are expected to rise to 61-72 years of age by 2050. The numbers seem high at first, but to put them in perspective you need to know what the people subject to these retirement ages expect from their work.
The 2016 Deloitte Millenial Survey presents many insights that allow drawing a hypothesis about why pension schemes could, if not become completely irrelevant, at least be significantly changed from their current forms. Millenials think that values that support business success in the long term are people treatment, ethics and focus on customers. Interestingly, only 5% of the millenials considered profit-focused values to ensure long-term business success. When excluding salary and other financial benefits, millenials answered that the four most important reasons for choosing to work for an organisation are good work/life balance, opportunities to progress/be leaders, flexibility (remote working, flexible hours), and the sense of meaning from your work. Furthermore, 77% of the respondents consider themselves being in control of their career paths.
The hypothesis Deloitte’s insights let us draw is that millenials don’t work only for making a living, but largely because they enjoy what they do and what they’re good at, and they believe in the organisation and its positive impact on its customers. If this was the case, why would millenials stop working just because they hit a certain age? The idea is absurd, especially when taking into account the nature of work in the future!
Luckily, we don’t have to wait until the first millenials reach the retiring age to validate this hypothesis. It’s enough to have a look at political leaders, senior executives and members of the boards of directors of large enterprises, musicians, actors, authors etc. Many of them have passed whatever the retiring age in their countries is, they could afford to stop working and still they continue without plans to retire. They continue because they love what they do and they have a call for it. Maestro Ennio Morricone is the embodiment of this. For the past 60 years he has composed music and still continues doing so at the age of 88 without any signs of stopping. Contrarily, he started concert tours in 2001 (at the age of 73) with a symphony orchestra and polyphonic choir and continues also touring still today!
My conclusion is that in the future decades it isn’t reasonable to expect people to stop doing what they enjoy just because they turn a certain age. The question is then whether it is realistic to expect every millenial to be physically and mentally fit to continue working at high ages. To be able to answer this, you need to know what the future work will be like.
The nature of work will change
What we define as work and how we work have already changed, but these will change even more. These changes are the second major factor in making the current pension schemes obsolete. The most comprehensible and inspiring thinkers I’ve so far come across on this field are Esko Kilpi and Katri Saarikivi, and their science based findings draw a clear picture of what the future work will be like.
During the next 20 years half of all jobs and 70% of low-skill jobs are predicted to disappear as the tasks will be performed by robots, AI and similar technologies.1 However, there will always be work for humans, but it requires defining work differently from how it has been defined before. Saarikivi suggests work should be defined as an activity of solving problems people have. Furthermore, she argues that the future work left for humans require skills that cannot learned by machines and software. These skills are learning, creative thinking, flexibility, contextual thought and social interaction skills, especially empathy.²
In other words, the work that in the future is left for humans is built up by the same elements that the jobs in which we see people working today well beyond the official retiring age (such as, leaders, politicians, actors, etc.). To make it clear, I don’t suggest everyone to become a leader, politician or actor. What I do suggest, is that people whose work is built by these elements are very likely satisfied about their jobs and don’t see any rational reason to stop working as long as they are physically and mentally capable to do so. And these capabilities don’t disappear when you turn into a certain age.
In conclusion, it seems obvious that when work becomes less repetitive and physically arduous and people work not only for financial reasons, but because they genuinely enjoy it, retiring as we understand it now becomes an outdated institution.