The main intention of this article is to explore the option for people approaching retirement of continuing to work for their employer in a mutually beneficial way.
But first I will paint a picture for you of what the transition into retirement might mean for you and your family; the potential issues or problems this might create and possible solutions to those issues or problems.
I will then go on to discuss the option of continuing to work, not necessarily in the exact same role, for your final employer, and I will link to a report that will give you some examples of the ways that some employers in the US are addressing this possibility.
The Big Issues When You Retire and Potential Solutions
The two most obvious issues most of us will face when we retire are the loss of the regular income and what you will do with the time that you have devoted to commuting and working for the last 40 odd years.
As you may be aware, I am strongly advocating that:
- people who are still working and have started thinking about their retirement life and getting into the detail of how they would like it to be, and
- people who are already retired but dissatisfied with their lives and future prospects,
should be seriously looking at the ways they could earn additional income in their retirement years. Now this is not only about earning additional income, it’s also about maintaining real purpose in your life after what is one of the major quantum shifts that takes place in the typical human life-cycle i.e. moving after around 40 years in the full-time workforce.
I have talked about this in some detail in a number of my cornerstone articles, which you can refer back to here: Retirement Savings and Earning Ongoing Income
I divided that articles into 3 parts :
- Your savings and pension – will they be sufficient?
- Potential sources of ongoing income, and
- How, when it comes to earning additional income and leading a life with purpose, the internet has changed everything.
The key thing I try to help people to understand is that when it comes to “Retirement“ everything has changed; the longevity revolution has redefined life-expectancy, and many of us will live much longer and healthier lives, so you could have 25 or more years of healthy active life after you retire.
Of course this has many implications, including:
– the need to re-assess your financial situation,
– how you will maintain your sense of purpose having left behind your career, and
– in all likelihood with your children having grown up and living their own lives.
Also, research is showing that many baby boomers simply don’t have enough money put aside to maintain their lifestyles, especially with a potentially longer active life. In a recent article in USA today 34% say they haven’t saved enough, 19% want additional income, and 9% need health benefits. Only 21% of respondents expect to immediately quit working when they retire
In addition to the impact of the Global Financial Crisis, which started in 2008, a big factor in this has been the progressive move by corporations to unwind their “defined benefits’ retirement funds, under which members were guaranteed a specific retirement income, in favour of defined contribution funds, where the amount that employees and companies contribute is defined, but the return received is in the hands of the investment decisions individuals make and to market fluctuations.
To make matters worse, the Nations of the developed world are reeling under the burden of their social security systems from the growing number of Boomers reaching retirement age, with a high percentage relying on social security as their primary source of income. The Global Financial crisis which started in 2008 made this far worse as the value of people’s pension, superannuation or 401(k) pension funds was slashed.
The USA Today article also reported that “Without some type of reform, Social Security benefits will need to be cut by 23% in aggregate by 2033, according to a recent report from the Social Security Administration. “
Significantly, the article also said that “Employment is no longer a taboo retirement activity. Sixty-five percent of Baby Boomer workers (in the US) plan to work past age 65 or do not plan to retire at all.”
Given all the above factors and the likelihood of a longer healthier life, coupled with the positive outlook on life that baby boomers are renowned for, this is hardly a surprise, but is welcome news for the Social Security system and the Government.
My proposed solution is that baby boomers should look to the incredible new opportunities created by the communications and internet revolution as I explained in my cornerstone article: When it comes to earning additional income in retirement, the internet has changed everything.
I still believe the internet and the new opportunities it has created will be the main way that older people will look to earn additional retirement income and to maintain their sense of purpose in life. But this will not suit everyone; we are all different and our circumstances will be unique. There are many older people approaching retirement age who still enjoy their jobs and get fulfillment from them. Understandably, many of these people would like to continue working rather than starting a new business of their own.
So How Can Employers Help Their Loyal Baby Boomer Employees Successfully Transition to Retirement?
As I indicated in the overview, my intention in writing this article was to explore the option for people approaching retirement of continuing to work for their employer in a mutually beneficial way.
This will require a new model for retirement that ultimately depends on employers updating their business thinking and practices.
In the “Transamericacentre.org 15th Annual retirement survey” there is an article titled: “Ready or Not: Baby Boomers Are Revolutionizing Retirement”
This article discusses how employers can assist their baby boomer employees to successfully transition to retirement to the mutual benefit of the employees and the company.
Clearly, accommodating their employees in the ways the article discusses not only benefits the loyal employee, it is also beneficial to the company. Instead of losing the invaluable skills, experience and knowledge that many employees have built up over their careers, a smooth transition enables that knowledge to be passed on to other employees progressively during the transition phase.
Whilst, In the introduction to the article the writer says that “The survey found a deep disconnect between Baby Boomer workers’ expectations and employers’ retirement realities: Only 48 percent of employers have practices in place to enable shifting from full-time to part-time and even fewer (37 percent) allow taking on new positions that are less stressful or demanding.” It also reported that “Eighty-eight percent of employers agree that they are supportive of their employees working past age 65 and delaying retirement”
In my opinion, the 7 ways that the organisation believes that employers could do more to help retiring employees, offer a solid starting point for further change. So if you are in a position to influence how the company you work for handles this issue, or if this is an alternative that suits you personally, I recommend the report to you as a basis to start a dialogue with the company.
I would be intrigued to hear how that goes, or what your employer is already doing. Let’s spread the knowledge.
You can read the full report here: “Ready or Not: Baby Boomers Are Revolutionizing Retirement”
Resources used in this article:
“Ready or Not: Baby Boomers Are Revolutionizing Retirement” http://www.transamericacenter.org/docs/default-source/resources/center-research/tcrs2014_pr_baby-boomers_and_employers.pdf
15th Annual Transamerica Retirement Survey http://www.transamericacenter.org/retirement-research/15th-annual-retirement-survey
3 hard retirement truths facing Baby Boomers http://www.usatoday.com/story/money/personalfinance/2015/03/21/cheat-sheet-baby-boomers-retirement/24988969/
5 Frightening Retirement Statistics That Demonstrate Baby Boomers Are in Serious Trouble http://www.fool.com/retirement/general/2015/04/19/5-frightening-retirement-statistics-that-demonstra.aspx