Retired – get ready for the new world order!Posted on: 13 April 2012 by Anthony Page
When you were slogging away at your job did you fantasise about your retirement?
Holidays, cruises, leisurely lunches, upgrading the kitchen and conservatory, treating the grandchildren - these were the dreams we had! Well, for most retirees those dreams are shattered. Low annuity rates prevail, as do low interest rates from banks and building societies. Fuel and energy costs have increased sharply and food inflation is rising steeply. All the while, the government reassures us that the revival is coming, but slower than expected. How can we believe them?
Let’s look at the world we live in and the future it holds for anybody who has retired or is planning to in the next few years. The extent to which the economy revives is very much dependent on two things – internal consumer demand and the economic climate around the world – especially the EU.
Savings and investments
Whatever happens, it will have little effect on retirees. If you have spent capital on living expenses over the past three years, that money has gone - even if interest rates increase. Similarly, people with cash in the bank will have a long wait before making any gains – low rates are here for at least another three years and possibly as many as five.
Fuel costs are going to continue to rise as global demand, spurred by emerging economies, increase. There are now seven billion people in the world (increasing at the rate of 200,000 a day!) and they want what we have had and taken for granted: cars, air-conditioning, consumer good, central heating, and packaging. They all use gas and oil.
Economic power shift
The outlook for the older community is bleak and we may as well get used to it. The economic centre of the world has shifted to China, India, Malaysia and, surprisingly, Africa! All these regions enjoy positive economic growth while the EU and UK remain stagnant. Even when we recover they will still be ramping ahead of us and we don’t make much that they want to buy.
We must come to terms with the fact that we are in a state of economic eclipse that is going to last for two, maybe three, generations!
Sitting in dear old Blighty, what can we do? Well, the answer is not much at a national economic level. The generations following us will live in a very different world than the one we grew up in. They will come to terms with expecting less and waiting longer for it. Families will start later as will home ownership.
To have and have not
There will be two clear groups – the haves and the have nots! The haves will inherit money from their parents and the have nots will have to make it on their own. Life will be tougher and expectations will drop. We will become much more community minded and work together at a local level to solve problems.
Those of us who have retired will have to be much savvier – the brighter ones will set up barter groups and share skills. Buying groups will form to get discounts and benefits for bulk buying. We will become tactical shoppers switching loyalties - ‘shopping pounds’ will go to the stores offering the best deals. Charity shops will boom and we’ll forget our anathema towards buying second hand. Car sharing will become a local and national consumer activity. Public transport will stretch to breaking point as the Freedom Pass owners optimize their advantage over the unretired! We will stop wasting food and energy and we will surf the net to get the lowest price for whatever we are buying. Gardening will boom – but growing food not flowers (unless they can be sold). We oldies will fight it out with younger workers for part time employment – jobs will be at a premium. Home entertainment will boom as we depend more and more on enjoying time at home.
For some nothing will change much – they were insulated for the past five years and will continue to be in the future but for the majority of us life will never be the same again. We’d better get used to it and learn to go with the flow. The people who have retired or are about to and who embrace the new world economic order will still live a good life – only different from the one they planned. Those of us that resist and try to stick to our old life styles will flounder and fail. There is nothing any of us can do to change what is – the die is cast and we have to live with it!
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