Historically the concept of retirement is a relatively recent phenomenon. It was first introduced in the early 20th century in Germany and then in most western countries. A major reason was to ensure long-term loyalty and stability of the work force. Before that, people assumed that they would work and be productive in some way until they died or were no longer able to continue.
The idea of retirement has now become so entrenched in our thinking that everyone is assumed to retire at a certain age, and whole industries have developed around the idea. Retirement planning is an expanding and highly profitable part of major employee benefit financial institutions. Investment specialists badger everyone to start saving early for retirement. Retirement housing and lifestyle communities are a burgeoning sector of the property market. Whole travel companies cater to the “grey nomads”. They are all working to ensure that retirement in the “autumn years” will be a peaceful phase of life, indulging in hobbies, spending leisure time with the grandchildren, playing golf or becoming world travellers. For many, nothing could be further from their reality.
Retirement has for a long time been seen as some kind of reward for a life well managed. Those who, through careful management or entrepreneurial skill, can afford to retire early are considered to be very fortunate and to have won one of life’s great prizes. For others, who have had a tough life of sweating in some unforgiving job and managing the rulebooks of a punitive corporate culture, the goal of retirement has signified the ultimate release. They looked forward to no longer having responsibility and the prospect of a lazy life of leisure.
But very few fortunate people these days retire in financial comfort and most worry about their long-term ability to fund a reasonable standard of living. Even the rich are anxious about their retirement. Paying for sound healthcare and coping with the idea of increasing costs of living in a much longer lifespan are critical issues. The boomer generation now heading into retirement is the first to see their children being less well off than they were and often have to support, or contribute to the support of their children and grandchildren. They have been called the “sandwich generation” because they are frequently called on to look after both their aging parents and their own children.
Pension funds that used to be rock-solid and secure are these days increasingly vulnerable to the turmoil in the financial sector, adding to the anxiety of retirees who watch the volatile investment funds failing.
But even those who have a measure of financial comfort in retirement are inclined to experience the trauma of life-change with great difficulty. Being forced to adapt to a new lifestyle excluded from the mainstream and with reduced social interaction often leads to depression. Retired executives sometimes say what they miss most is the friendship and camaraderie of the workplace. Although there is medication to deal with this, the sense of uselessness and redundancy experienced by previously productive people can be devastating.
While people used to die off conveniently somewhere around the biblical “three score years and ten”, they are now often still strong and active enough to be playing competitive sport, running Comrades, or participating in events like the Two Oceans at that age. They take care of themselves physically and feel well enough to remain fully involved. The actuaries tell us that people who are now reasonably healthy in their early sixties will, barring anything untoward, live into their nineties and beyond. Few people have come to terms with what those extra thirty or so years of life will mean to them.
In a study published by Merrill Lynch Wealth Management last year the noted gerontologist Dr Ken Dychtwald was quoted in a presentation to the American Society of Aging saying that his advice to retirees was that they should re-invent themselves and should plan for a productive retirement. While this makes good sense, the problem is still with the idea that retirement should stay and that people should merely try to make it as pleasant and pain-free as possible.
It is treating the symptom instead of removing the cause.
The question we must ask is: should the whole idea of retirement not be scrapped completely? It has so many downsides. Should we not allow and encourage everyone to continue with work until they no longer want to? Should people not be encouraged to see the late stage of life as just another stage requiring appropriate adjustments without such a final blowing of the whistle? And should it not be up to each individual to decide when to leave formal employment instead of having it thrust upon them?
The institution of retirement was conceived more than a century ago for a world which was operating under very different circumstances than those that exist now. In those more paternalistic days, when employers had to legislate for a system to ensure loyalty and to provide for people so that they had a living income when they stopped work, pension schemes and regulated retirement made good sense. Today, loyalty no longer drives corporate performance and pension schemes are not as secure as they were intended to be. People are more independent, and want to make their own choices.
The notion that retirement should start for everyone by the time they are 65 years old seems arbitrary and such a one-size-fits-all regulation is out of touch with current thinking. Even if an individual feels energetic and intellectually active, it is like a gong going off and signifying the onset of a fade out and decline. The internalised message is, “It’s game over”.
If the institution of retirement no longer serves an appropriate purpose either for employees or for their employers, what is the point of keeping it? The benefits of its total abolition are significant. Younger generations, who are now expected to fund the pensions of their predecessors, will no longer be in hock to the expanding cohort of senior citizens. Valuable skills that have regularly been leaving business and industry will be retained. Removing the retirement age marker will reinvigorate those over sixty with a lengthened horizon and will stop the nonsense of ‘sailing into the sunset’.
The dictum of “making room for the younger generation” also needs to be re-examined. Older people need not block the progress of the younger ones. The senior leaders in top corporate teams or in professional firms are often stretched and live with the stress of being over-extended. If the older people still pay their way and make a significant contribution, why not simply expand the team by dividing some of the jobs or increasing the partnership? Retaining skills must mean more business and better results without increasing costs.
Instead of retiring, most careers from executive level down through the ranks can be re-formatted to include a coaching component or into a senior advisory slot or a secondment to a teaching institution. There is no reason why those who are sixty and above must be put out to grass if they are healthy and still able to make a meaningful contribution.
It’s time to re-think retirement. DM
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