Redefining the age of retirement

Why retire at 65?

George Burns once said that retirement at 65 is ridiculous. “When I was 65,” the old comedian said, “I still had pimples."

Increasingly, it seems people around the world are agreeing with George, or with the first part of his statement anyway. Why retire at 65?

According to Randall S Hansen on Quint Careers, people who reinvent themselves after retirement are becoming more common, especially as baby boomers reach retirement age “and reshape the image of retired workers, just as they reshaped many other aspects of life and work”.

He quotes author Marc Freedman as saying that in just a few years the number of people over 50 will be more than a quarter of the US population and they won’t want a leisurely retirement. Instead, they might return to education, become entrepreneurs, change careers or do volunteer work.

Hansen says it’s estimated that anywhere from half to most of the baby boomers will continue working past traditional retirement age.

Another author quoted, Ken Dychtwald, has a name for the transition between working and retiring: “middlescence”. It occurs some time between people’s fifties and their seventies. Hansen writes that for some people, financial needs mean they can’t afford to retire.

One option is to try things like phased retirement, part-time work, telecommuting, freelancing or temping.

For Japan, a workforce shortage means it is having to grapple with the retirement issue now.

Writing on Careerjournal.com, Sebastian Moffett says Japan has a declining workforce because of two trends linked with economic development: better diet and healthcare and women having fewer children. It's an issue other countries will also face soon, he says.

“The problem is unprecedented in modern times, and its most predictable effect would be to sap economic growth: if a country's workforce declines and higher production per worker doesn't make up for this, its economy will shrink.”

Moffett says that while some countries will use immigration to fix their problems, Japan prefers to entice “the elderly to work longer before receiving retirement benefits, effectively dealing with old age by making it start later.”

Even though Western Europeans have been retiring earlier recently, Japan’s use of older workers could provide a lead for other countries, Moffett says.

“Many Japanese workers are enthusiastic about working longer, even though the official retirement age remains a relatively young 60.”

Japan passed a law last year that requires companies to raise their retirement age to 65 from 60 by 2013 or rehire their retiring workers. However, there was a lot of opposition from corporations to the new retirement law.

According to calculations from Tokyo's Keio University, extending the working life of all Japanese until 65 keeps two million more people in the workforce. A further million or so workers could be women, who traditionally have stayed at home in Japan, but increasingly are working.

Moffett writes that it may not be difficult to boost the numbers of older people in the workforce as until a few decades ago, people worked until they died anyway.

One employer says people's productive capacity doesn't change after they reach 60, but the same employer adapted factory machines to relieve the strain on aging joints.

In Australia, the government has said the current participation rate for fifty-somethings isn’t sustainable, says Wendy Taylor, writing in the Sydney Morning Herald (a subscription site).

Along with business associations, the government is developing policies and strategies to keep people working at least until they're 65.

“To date, most of the public debate and policy changes have focused on identifying and eliminating the inducements for people leaving and the barriers for people staying in the workforce,” Taylor says.

However, she doesn’t necessarily think that is a good thing.

“Creating policies that result in staff coasting along, some begrudgingly, for an extra decade will bring few benefits to organisations' morale, productivity or the bottom line.

“Attempts to keep people working longer will only pay dividends if older workers are supported to update their skills, knowledge and working styles so they can adapt to new roles and demands.”

She says the goal of “lifelong learning” will need to be a reality. However, it’s something that is still a new concept to most Australians, she says.

Mills is a Dunedin writer. Contact her at kirstin_mills@computerworld.co.nz

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