Retirement Stats, Studies, and Stuff
By Mariella Vigneux, MBA, ACC
Certified Professional Coach
Imagine that your best employee, the rainmaker of the organization, comes into your office, and says, “I’m retiring. I’m leaving in two months.” She’s 55 years old. She says she has no idea what she’s going to do next, but she needs a change. Or imagine a different scenario. You’re at lunch with one of your oldest employees, a guy who has lost his edge, who dawdles through his workday like he’s putting in time. He says to you, “I’m never going to retire. I‘d go crazy not having a job to come to every day.”
Determining when to retire can be a tumultuous decision-making process for many employees. It can take years to decide, or it can be a radical, spur-of-the-moment choice.
Your stake in the game
It may be that your organization is encouraging the retirement of senior employees – to reduce burden of high salaries and benefits, or to shift the employee base to young, tech-savvy employees. Alternatively, it may be that your organization is desperate to retain senior employees – you’re facing a shortage of skilled talent, or perhaps you’ve come to treasure the work ethic of the older generation and want to keep them on longer.
Whether you’re keeping senior employees or easing them into retirement, you have a stake in helping employees clarify their decisions. By giving them what they need – a comprehensive set of retirement supports – you can help employees shorten their decision-making time. And in opening the retirement conversation, employees become more willing to reveal their often unspoken plans for retirement. They can work with Human Resources personnel to set a retirement date, discuss retirement tapering plans, and determine the best fit.
Employer involvement often means pre-retirees feel more valued. Combine that feeling of being valued with a clear mind about retirement, and it can mean real enjoyment and productivity during their last years at work.
Having more information about an employee’s retirement intentions helps succession planning. You know Jack is leaving in September and Jill will be around for another three years. People who are retiring with clear plans are often very willing to transfer their body of knowledge to their successor. And they’ve set aside time to do so.
What’s the big deal for employees? Get a hammock. Retire!
Why is the decision to retire a minefield? Why all the turmoil? Don’t we all want to quit work, lie in a hammock? We might think that. However, the closer people get to retirement, the more mixed and intense their emotions become.
And it’s no wonder; they are facing one of the biggest life transitions. They could be retired for longer than they worked. Putting aside the huge question of financial viability to the end of life, people nearing retirement suddenly see that retirement will affect all aspects of their lives, from where they live, to what friends they have, to what time they eat breakfast.
Non-monetary issues faced in retirement
Here are just some of the many considerations that can alarm people:
- Loss of Identity – What happens when I give up my identity, title, power, security, income, roles, status and recognition? Who am I then?
- No clock, no calendar – How do I structure my days when my daily habits are suddenly gone, when I no longer have a path to follow?
- No sense of purpose – What will get me out of bed in the morning full of purpose and passion, ready to give up my old work life, and open to great possibilities?
- Upheaval in partner/spouse relationship – With my 40- to 60-hour work week gone, how will I adjust to being with my life partner all day, every day?
- Lost companionship with work colleagues – Whom will I hang out with when I lose touch with my favourite work mates?
- Mixed emotions – How do I manage the turmoil of joy, sadness, fear, relief, resistance, surprise, anger and anxiety?
Ways the employer can help
As an employer, here are four ways to support the non-monetary retirement decision-making:
- Smooth the conditions of exit for employees
The single most important predictor for how well people will adjust in retirement is the conditions of exit from their career. Having favourable conditions when leaving the workplace helps people adjust faster and better to their new life.
So how do you ensure the conditions of exit for senior employees are good?
a) Set up retirement tapering programs such as part-time work, contract opportunities, leaves of absence / sabbaticals, and flexible schedules; remote working arrangements; and different assignments, including opportunities to do jobs with different pay levels and responsibilities.
Tapering options give senior employees time to think, and time to practise retirement. They support older workers who want to work longer, but with fewer hours or at a slower pace. Of course, these kinds of work options require adjustments to pensions and benefits.
b) If layoffs are coming, give as much notice as possible. Make the transition as easy as possible. Do not march them out the door with a shoebox of their personal belongings under their arm, tears in their eyes. These people do not adjust well to retirement. I know this practise is designed to protect the organization, but it is bowing to the lowest common denominator. We can be kinder than that. Work with senior employees in developing a retirement plan.
c) Work with senior employees in designing a retirement plan.
d) Align people with work that suits their skills and interests, and give them appropriate training. Many people retire because they don’t feel they are contributing any longer.
- Offer one-on-one retirement coaching for employees, fully paid or subsidized. This will reduce decision time, increase self-awareness, clarify plans, and improve work engagement. Offer a list of vetted, certified retirement coaches.
- Offer group retirement workshops that solely address the non-monetary issues of retirement. Focus on the real issues… how to create emotional and social well-being in retirement. Keep the financial discussion for another day! I’ve learned from experience that two topics don’t mix well. To prevent people feeling singled out, offer these retirement workshops to all employees over the age of 45.
- Invite employees to volunteer in company-sponsored charitable initiatives so they can try their hand at many activities outside their usual work sphere, e.g., sponsoring refugees, building a home at Habitat for Humanity, organizing a homeless haircut project, etc.
The years leading up to retirement can be a tumultuous time. You can help employees by acknowledging the importance of the non-monetary aspects of retirement, smoothing their exit from your organization, and helping them create social and emotional well-being in the next phase of their lives.
It used to be that employers paid little attention to the retirement question. They didn’t see the return on investment in helping their employees out the door. These days, however, retirement planning and succession planning are high priorities. Organizations are focusing on retaining scarce talent as long as needed, lessening the disruption from people’s departures, and facilitating the transfer of knowledge. It makes financial sense. It is also worth noting that retirees are your best ambassadors, with very broad networks – industry colleagues, friends, children, and grandchildren. They can influence both your reputation and your future workforce.
And many employers, I trust, are motivated like the rest of us by non-monetary considerations and would like to be making positive contributions to the world, including ensuring good outcomes for their retirees.
One lives in hope!
I recently read a book which explores all the issues you listed as “non-monetary issues faced in retirement.” The author was not retiring but taking a time out from a stressful life. Jane Christmas, The Pelee Project. Well written, an easy read, available as an audio book.
Ah, a book recommendation! Thanks, Amy.