This article appears as part of the Money HQ newsletter.

Many people think retirement is for ‘old’ people and this holds them back from engaging with their pensions.

But the way we retire has changed radically in the past decade, and far from being an end, retirement is more like the start of a new phase of life that can include periods of work mixed with sabbaticals, travel and relaxation.

To make the most of your life after the age of 55, it’s crucial to have sufficient retirement income, including pension pots. So read on to find out how retirement has changed and how planning ahead can help you enjoy the ‘new retirement’.

What has changed about retirement today compared to 30 years ago?

Retirement used to be a single event, in the sense that people simply stopped working at the age of 55, 60 or 65. Typically, they had worked for one employer for the bulk of their career and built up a pension pot, which would give them income to support themselves for the rest of their lives.

Now, it’s becoming less common for retirement to be a set date after which people stop working for good and spend their time gardening and watching TV. Today, people tend to ease themselves into retirement – for example, by going part-time at their main job, then leaving for a sabbatical, returning to work but taking a sideways step into a different role in their industry, and so forth. There’s also a growing trend for people in their 50s and 60s to start businesses and retrain to work in new industries.

The Herald:

Why is the retirement age rising?

As a nation, we’re living longer. In response to the changes in the way people age, the government has been gradually raising the age at which people become eligible to receive the State Pension.

If you were born before 5 April 1960, you can expect to be eligible for the State Pension when you reach the age of 66. If you were born after this date, there’ll be a phased increase to 67, eventually rising to 68. You can check when you’ll receive the State Pension here.

Bear in mind that men and women receive the State Pension at the same age.

There’s no fixed ‘retirement age’ when employers can make someone stop working in most industries, so you can continue to work after you start receiving the State Pension or dip into your workplace pensions, if you’re able to.

How do I fund my retirement?

The days of working for one employer for your whole career are largely over. Instead, working-age people today can expect to have several different employers or perhaps a mix of employed and self-employed jobs during the course of their career. That means most people will have more than one pension.

In addition to pensions, younger generations are building their wealth via a variety of assets including property, Stocks & Shares ISAs and other investments.

Read more:

Money HQEverything you need to know about tax in retirement

The benefit of having a range of assets is that it provides future flexibility as they can be earmarked for different purposes and drawn upon at different times, to provide future lump sums of money or an income.

How do most people accumulate wealth for retirement?

For previous generations, retirement planning was a simple matter of accumulating wealth in a workplace pension and keeping up their National Insurance contributions to ensure they were eligible for the State Pension. Once their pensions were big enough, people considered their working and wealth-accumulation phase of life to be over, and they drew on their pensions for income so they didn’t have to work anymore.

Now, that ‘wealth accumulation’ phase can last throughout life, as many people choose to keep working for longer, and are more flexible on what their retirement looks like.

Should I put all my savings into a pension?

Pensions have valuable advantages that make them a great place to start building wealth for retirement. The biggest benefit for many people is pension tax relief, which is a government top-up to pension savings based on your Income Tax band. However, pensions can only be accessed from age 55 (some employer schemes may be different). So, depending on your personal situation and goals, it can be useful to save and invest in alternatives – such as ISAs – from which you can withdraw money at different times. The right solution for you will depend on your personal circumstances.

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Ben Stark is a chartered financial planner with over a decade of experience advising businesses and families. He is partnered with St. James's Place Wealth Management.