Retirement Planning in 2025: What Every Employee Needs to Know

Employees face a retirement planning picture that is far more complex and pressured than ever before. To tackle this picture, Luke Mersey sat down with Renovo’s Head of Career Coaching Emma Louise O’Brien to discuss how retirement has changed, what concerns surround modern retirement and what employees can be doing now to plan for the later stages of their careers.

How has retirement planning changed over recent years?

Firstly, we're seeing a higher number of organisations making redundancies and with employees having changes forced upon them, some may need to consider retirement sooner than they might have planned. There have also been a significant number of economic and social factors which have played a part in retirement planning over recent times; a challenging economic climate which means people may need to work for longer, a newly appointed government bringing in new legislation and of course COVID, which has resulted in increased health concerns and led to lifestyle changes for many people.

In the past, it was much more common for employees to have one job for life, where they worked for the same organisation throughout their career right up to retirement, at which point they reached a ‘cliff edge’ when their work life abruptly ended. However, with redundancies much more commonplace now, professionals are taking control of their situation and planning the latter stages of their career a lot more strategically and much earlier.

As a Career Coach, what aspects of retirement planning do employees need support with the most?

When I am supporting individuals who are planning for the third chapter of their career, I always ask them at the start whether they truly understand their finances and what they need financially in order to retire; that's going to have a really important impact upon the decisions that they make about what they want their retirement to look like. At this point we would always advise individuals to go and speak to an Independent Financial Advisor to get some understanding around what they need to have, to make their retirement work for them.

Away from the financial considerations, a really important way that Coaching can help is by providing an employee with the ability to take a step back and consider a couple of key questions, primarily; What is their purpose and what do they actually want their retirement to look like? The need to work and the desire to work are two very different things and more and more people are coming to us without having given much thought to their long-term career plans. As such, we’re helping them to take control back and giving people the chance to think about what it is that they really want to do. What are their values, their motivations, their priorities, their wants and their needs and if necessary, help them to reframe the idea of what work means to them.

How are retirement challenges affecting people’s wellbeing and lifestyle?

Employees experience varying emotions when it comes to retirement. The COVID pandemic, for example, made a lot of people re-evaluate their professional and personal lives, with wellbeing playing a key part in that. Fortunately, wellbeing is very topical now, not only in the workplace but also in wider society and people tend to feel more comfortable talking about their situation and sharing how they feel.

Many individuals are also used to the structure which work has given them, but when they move into the retirement phase, this is lost and the challenge often becomes time management and planning their lives effectively. As Coaches, we are here to create a safe space for employees and give them the opportunity to think about the solutions they can create for themselves. For example, if they’re worried about being disconnected from the world once they’ve retired, then helping them to think about ways to re-establish that connection and understanding the factors which are in their control, is important. It’s about giving people the opportunity to really think about ways they can take accountability, not only for their careers, but also for the social and personal aspects of their lives of which well-being plays a huge part.

What employment options are there for someone who is approaching retirement?

We're in a world now where employees have different ways that they can work; remotely, hybrid, full time in the office. There is so much more choice now and that can influence people's work-related decisions, certainly at the latter stages of their career, where they’re in a position to control their journey much more than they have been able to in the past.  

Professionals don’t often consider simple changes they could explore, such as working for the same organisation, or on a reduced hour basis to achieve a greater work life balance. Other options could be to explore roles as a freelancer, or perhaps as a consultant to give them greater flexibility and choice of where and when they want to work. Another possibility could be starting a business. We are in a very entrepreneurial era where employees can turn hobbies into businesses and this is much more achievable now.

For senior level employees, there are again alternative routes they can take, such as Non-Executive Directorships, or they can become mentors by supporting professionals at the very early stages of their leadership careers.

Many individuals we support are concerned about ageism, particularly if they have read about it via the media and come into the support with preconceived assumptions. In reality though it’s helpful for employees to reframe this to their advantage and use their profile to emphasise their experience and knowledge. In the end, having that opportunity to sit down and talk to a career coach about what options are there, can be a real eye opener.

What can professionals be doing NOW to plan for their retirement?

For anybody who is nearing retirement age, the key thing is to invest in their career planning now. Thinking about what they want to be doing in the next 5 to 10 years and starting to put that plan in place straight away and understanding what they need to do to achieve their goals, is central to that.

As an example, if you want to downsize your career as you get older, then you will need to reflect that choice appropriately through your CV. If you want to move from a senior level position to one with fewer responsibilities, then your CV will need to reflect your relevant transferable skills too. Considering what your CV needs to look like for future opportunities is crucial if you are thinking about a change.

Investing in your digital footprint is also crucial in an era where so much now is online and will continue to be so. Updating your LinkedIn profile, building and investing in your networks now is also very important. In the same vein, investing in your personal brand and your social media presence, so that you become the individual that potential employers think of first, is really important when you're marketing yourself.