The Psychology of Retirement

 

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These days the line between work and retirement is increasingly difficult to define. How, when and in what manner it occurs is less certain than in the past. Its very meaning has changed with many people continuing to work even though they claim to have ‘retired’.

And, despite its inevitability in one form or another, many individuals still fail to plan adequately for its arrival. For example, a new report from financial services company MGM Advantage claims that “three in five (60%) over 55s admit to being unprepared for retirement”.

Thus the relevance to those interested in older workers of a valuable and interesting new book: The Psychology of Retirement – coping with the transition from work*. It is written by Derek Milne who retired as the Director of the Newcastle University Doctorate in Clinical Psychology training programme in 2012.

Unlike most other guides to retirement which tend to deal with the practicalities of growing older outside of full-time work, this enlightening handbook tackles the unspoken issue that many people find the transition to a happy and fulfilling retirement difficult and stressful.

In response, the book draws on proven psychological coping strategies to aid the process of coping with retirement, ensuring that individuals are able to gain a better understanding of the realities of retirement and maximize their enjoyment of a key period of life.

Incorporating the author’s personal experience, real-life case studies, the latest research and well-established theories, The Psychology of Retirement provides many insights and much food for thought concerning the nature of retirement and the new challenges and opportunities it represents.

* published by Wiley (February 2013).

MGM’s Retirement Nation Report 2012: http://www.mgmadvantage.co.uk/island/wp-content/uploads/2012/11/Retirement-Nation-2012.pdf

Planning for old age – “at least meet me halfway”

Today’s newspapers and news outlets are almost all carrying a similar story regarding the over 50s “sleepwalking  into old age” with respect to their pension provision following comment by the National Association of Pension Funds (NAPF) and a report by the Institute for Fiscal Studies regarding increased life expectancy.

(e.g. http://www.bbc.co.uk/news/business-20543308)

Such issues are extremely important as is the allied issue about older people sleepwalking towards an unhealthy old age by virtue of their inappropriate lifestyle choices.

There is no shortage of information on these topics but rather people just do not seem to want to put any effort into understanding these things, matters which are going to affect a great part of their lives in a very fundamental way. Rather like my disappointment at not winning the lottery can be largely explained by the fact that I don’t buy any lottery tickets so individuals must show greater commitment and take greater responsibility for their own future well-being.

We all know it’s boring, we all know the institutions have vested interests (note the focus here on pensions and not other forms of financial provision) and we all know it can be difficult – but not that difficult, not the basics anyway!

So that people can get their heads around some of the issues I attach below the link to a brief description which I wrote a few years ago and which has not changed in the slightest way – except become more urgent.

http://www.inmyprime.info/factSheets/biscuit.htm

No one ever expected the Spanish Inquisition, either

New research from Age UK Enterprises shows that apparently (surprise!) the majority of over 60s (74%) have made exciting plans for their retirement,from extended overseas holidays (26%), to home refurbishments (20%). However that optimism is countered by a lack of confidence in how far their money will stretch – with over a quarter of respondents (29%) feeling uncertain or negative about their current financial situation.

They state: “With tumbling annuity rates and poor returns on savings, securing a comfortable retirement has become an ever more challenging task. More than a quarter (27%) of those who feel uncertain or negative about their current financial situation feel that the financial crisis has heavily impacted on their financial plans for retirement, while more than one in four (29%) stated they didn’t earn enough money throughout their career to save for later life. However, the majority (81%) of those who are pessimistic about their finances believe that they didn’t spend enough time planning for retirement.”

The research findings in themselves hardly tell us anything new. In the current economic climate retirement planning is a bit like writing your Christmas list when you’re a child; you know what you’d love to have but you also realise that you’re unlikely to get it – certainly not everything, anyway.

However, the findings also highlight a glaring dilemma in mentioning “tumbling annuity rates and poor returns on savings”. This being the case, even those who have ‘planned’ and put more money into pensions and savings will hardly be dancing with delight.

Overall, this news item only adds fuel to the argument that says we need to stop thinking of retirement savings purely in terms of pensions and current accounts and start thinking more creatively. Also older people need the option of continuing to work longer on a part-time basis rather than expecting a period of full-time retirement that currently may last several decades.

…What was that saying about not being able to solve a problem using the same thinking that created it?

Talking Point: Do you really know how to get the best out of your older workers?

As published on HRzone

Posted by Dianne Bown-Wilson, chief executive of in my prime in Managing people, Business lifestyle on Tue, 27/03/2012 – 15:43

Of all the things that we aspire to during our career, being an ‘older worker’ probably isn’t one of them.

Yet, as we age, this identity is thrust upon us and, with it, a range of stereotypes based on other people’s perceptions.

As a 56-year old manager recently pointed out: “Suddenly all that people seem to see is your grey hair, and their attitudes toward you start to change.”

But as studies have confirmed, individuals don’t primarily identify with being ‘older workers’ themselves, but rather as still being the person that they feel they have always been. No wonder that this situation can generate conflicting feelings about one’s position as an older person in today’s workplace.  

Herminia Ibarra, INSEAD professor of organizational behaviour and author of ‘Working Identity’ maintains that our identity at work is an amalgam of how we see ourselves in our professional role, what we convey about ourselves to others and, ultimately, how we live our working lives.

But for older workers facing change at a number of levels, this scenario may generate a variety of problems. For example, after many years in a given role, older employees may have an entrenched view of their work-related identity.  

They may also become defensive as they realise that their career has plateaued and become increasingly withdrawn as they perceive a future where working life is likely to just involve ‘more of the same’. But many identity issues for older workers also emanate from changes to the nature of their work.

Negative stereotypes

In his book ‘The Start-up of You’, LinkedIn co-founder, Reid Hoffman, says: “There used to be a long-term pact between employee and employer that guaranteed lifetime employment in exchange for lifetime loyalty; this pact has been replaced by a performance-based, short-term contract that’s perpetually up for renewal by both sides.”  

For many older people who started work in a time of jobs-for-life, dealing with today’s lack of security and uncertainty in career progression terms can be traumatic and challenging. At worst, they may feel short-changed; at best, uncertain of how to negotiate this unfamiliar terrain in order to continue to being successful.

The situation has only been made worse by phenomena such as globalisation and technology, which have fuelled demand for new skills, increased levels of flexibility and continuous learning.

As a result of all of this, older people can fear losing their status and expertise and start questioning their purpose and relevance, while wondering whether and for how long they can keep up the pace. These pressures can also lead to generally unspoken fears along the lines of ‘who am I these days?’ and ‘what do others expect from me?’

One of the issues is that stereotypes about older workers tend to be based on a range of either conscious or unconscious assumptions. These include the belief that they are resistant to change; are slower and less flexible; are reluctant to participate in training or re-training and resent younger managers or colleagues.

The majority of older workers can overcome these perceptions by virtue of their own continuing high performance, adaptability and resilience levels, however. But some do inevitably struggle with change and this scenario can lead to behaviours and attitudes that serve to reinforce negative stereotypes.

For example, older people may be fearful of losing their jobs and of being unable to find another one due to their age. They may also feel threatened by younger colleagues and afraid that they are starting to underperform.

Such fear and defensiveness can lead to individuals feeling resentful and aggrieved, but such feelings not only serve to entrench ageist perceptions but can also damage their own position.

Differing requirements

As a result, HR professionals and line managers who recognise this situation and appreciate the validity of such concerns should take steps to deal with them straight away in order to prevent them from becoming entrenched.

But dealing with older workers’ attitudes and behaviours effectively does entail understanding something of each individual’s personal circumstances. For instance, for many people, as both their children and parents age and grandchildren start to arrive, it is a time of great personal change and potential role conflict.

But the practical implications of supporting younger and older generations at the same time may generate new financial and emotional pressures. Retirement starts to loom, but it may be viewed more as a concern than something to be welcomed.

As for continuing to work, older employees have a range of different aspirations – some will want to continue progressing, for example, while others may want to slow down and put in fewer hours or take on less responsibility.

Some may want to change roles, careers, or even become self-employed but they may also lack the confidence to do so. Others might feel frustrated and marginalised on realising that they are perceived as ‘older’ and on feeling that they are being overlooked in terms of further development.

Still others may be bored and lack an interesting challenge, however, or they may be stressed, facing burn-out and lacking any kind of work/life balance.

Awareness of these and other concerns should ideally come naturally through ongoing informal communication at line manager level, where issues can be dealt with sensitively and appropriately.

Appropriate support

Pertinent responses might include discussing various options such as flexible working, particularly for those with caring responsibilities, or re-training/upskilling for those who need to be reassured of their continuing value.

Appraisals and performance management processes are likewise fundamental as a means of providing focused feedback and they should be used as a forum to set goals and future direction.

However, much can also be done on an informal basis. Mixed age teams, ‘buddying’ schemes and the involvement of older people in project work can both benefit the organisation and help older workers increase their comfort levels around change.

Mentoring and coaching programmes can likewise reinforce older people’s sense of value and assist them in exploring their changing identity.

Alongside such support, however, training around financial, life planning and work-life balance should be also provided for workers of all ages rather than just the usual ‘too little, too late’ pre-retirement programmes.

Health and wellness initiatives are likewise vital and should involve all generations in order to reinforce the message that older workers must be included and valued rather than simply maginalised.

Ultimately, supporting older workers effectively comes down to recognising that, although some are having to work longer purely for financial reasons, many find personal meaning in their employment and are committed to it.

“I am an engineer and a good one,” a 67-year old told me recently. “This is who I am and as long as I can deliver what they need, why does it matter how old I am?”

Dianne Bown-Wilson is chief executive of workplace age management and diversity consultancy, in my prime.

 

To see the article as published on HRzone click below – you will have to be registered and logged in.

http://www.hrzone.co.uk/topic/managing-people/talking-point-do-you-really-know-how-get-best-out-your-older-workers/119012

Giving older consultants a bad name

The model of older workers moving into consultancy in later life in order to both meet their own career and life aspirations and to free up jobs within the talent pipeline in their previous workplace is a good one.

It’s unfortunate then that stories such as the one reported in the Daily Mail cast an unfavourable light on the practice. The article comments on examples of paying retired senior police officers what appear to be large sums for consultancy services.

Of course, daily consultancy rates taken out of context can appear high but fail to take into account the non-paid downtime that is a feature of most consultants’ working lives. In this case, this expenditure may still have added up to value for money for the services delivered compared to continuing to pay these individuals as employees, considering their experience.

However as Jonathan Isaby, of the TaxPayers’ Alliance commented: ‘Very serious questions need to be asked about how former police chiefs seemingly went through a revolving door that saw them retire, only then to be paid exorbitant amounts of money.

This doesn’t do the cause of most ordinary individuals doing reasonable and valuable amounts of consultancy work post-retirement any favours at all.

http://www.dailymail.co.uk/news/article-2120300/Police-chiefs-hire-retired-colleagues-1-100-day-act-consultants.html#ixzz1qDbfWSHZ

 

The yin and yang of work and retirement

Traditionally society has viewed work and retirement as different, exclusive states. Either you worked or you were retired. Now, as the range of different work to non-work transitions widens we need to alter our fundamental approach.

Thinking about this, the concept of yin and yang sprang to mind – which is surprising as it never has done so before! But, if you think that yin and yang represents an amalgamation of two opposing states then it really makes sense. According to the website Absolutely Feng Shui, Yin is soft while Yang is hard. Yin is stillness while Yang is movement. Female is Yin while Man is Yang. Intuitive is Yin while Logical is Yang. Winter is Yin while Summer is Yang, and so on….

Where’s this leading? Well, at the moment we seem to have a situation where, in general, we consider work is bad, retirement is good. Unless of course you’re an expert in well-being, or a government official in which case it’s work is good, retirement as non-productive leisure is bad.

In the future our society will face a situation where nearly everyone will have to work for a considerably extended period – albeit, ideally in some flexible fashion. So starting to think of work and retirement in yin/yang terms as an amalgamation of the best of each state could be very helpful in changing people’s attitudes. 

Work is challenging, retirement is fun; work is constraint while retirement is freedom; work is innovation, retirement is routine…. or should that be the other way round?  Anyone like to contribute any more?

 

 

6.1 million over 50s set to work past retirement age

According to retirement specialist LV=’s newly released Working Late Index, 28% of working over-50’s are planning on average to work past state retirement age for an extra six years, which based on today’s retirement age would see them retiring at age 71 for men and 66 for women. One in five over-50s (19%) said they expect to work for at least a decade past the current state retirement age.

Two thirds of those ‘working later’ apparently will do so because they can’t afford to retire.

The report goes on to state that one in five over-50s – equivalent to 4.3 million people – who had retired have since gone back into work. Of those who have gone back into work: 

  • 11% returned in a part-time capacity, 6% into voluntary (unpaid) work and 3% back full-time
  • 37% went back to work because they felt they were too young to retire
  • 32% missed being part of the working environment
  • For 30% it was financially-related: 20% said it was a necessity as their personal and/or state pension wasn’t enough to support them in their retirement, and one in ten (10%) needed to go back to work to help continue financially supporting their family

However, going back into employment after retirement has given some over-50s an opportunity to fulfil other ambitions. A fifth (19%) made a complete career change and 12% set up their own business. Many have chosen to go back to work in a role that requires fewer hours than before (27%), and 18% are doing a job that is less stressful than their previous job.

In terms of these findings this is an interesting study. However LV’s use of the phrase “state retirement age” isn’t helpful in a society in which we have now abolished mandatory retirement. Obviously they mean state pension age as they say “as the state retirement age increases to age 65 years for women in 2018, and to 66 for men and women in 2020”.

This wouldn’t matter except that it seems clear that the sooner we decouple the concept of retirement from that of drawing a pension the more helpful this will be for people in terms of understanding the options open to them in later life.

Full steam ahead for the over 65s

Thank goodness the government hasn’t backed down in the face of industry whining of “too soon/too difficult” and decided to delay abolition of the default retirement age.

This week’s BBC age discrimination tribunal decision has underlined the fact that employers must now start putting some interest and enthusiasm into tackling the issues surrounding older workers if they too are not to find themselves facing claims.

How good it would be if in ten years’ time we have left age stereotyping and discrimination far, far behind us. Unfortunately, looking at how long it has taken women to make insufficient progress in the workplace, such a wish is probably ridiculously unrealistic.

The difference between the two scenarios however, is that unless you die first, everyone gets old. The attitudes younger people adopt today may someday either help or hinder their own aspirations and position.

Towards a better pensions and retirement framework

Last Thursday I was very pleased to attend the first seminar of the recently formed Centre for Retirement Reform (CRR) at The Institute of Directors in London.

“The CRR is a new think tank and lobbying body set up to help bring about the reform necessary to produce better retirement outcomes for the people of Britain. Although the pensions arena continues to go through change and restructuring, to date this has fallen well short of the root and branch reform required to address the biggest issues affecting retirement now and into the future.

The CRR believes three fundamental changes are necessary:

  1. State retirement age needs to be raised to 70 as soon as practicable; sensible transitional arrangements are perfectly possible.
  2. The existing state pension benefits system should be replaced with a simple, universal state pension at or above the current means tested level – a change that can be self-funding.
  3. A new long term savings product structure must be developed to replace the current private pension model as it is no longer fit for purpose.”

The seminar was very well attended and the speakers were excellent. I, personally, was particularly impressed by the words, insights and passion of Alan Pickering discussing the need for a decent, universal State Pension.

Trying to grapple with the plate of spaghetti that now constitutes the UK’s pension and retirement system and, furthermore, to simplify it and structure it in a way that is understandable and acceptable to the majority is a task indeed!

The initiative is timely and we wish them every success.

For more, visit the CRR website at http://retirementreform.org.uk/index.php

Why employers should hang on to older workers

New research shows that employers are likely to benefit if they encourage older adults who want to work to keep their jobs.

Psychologists Dr Darren Van Laar at the University of Portsmouth and Simon Easton, consultant psychologist at QoWL Ltd., a university spin-out company, used the Work Related Quality of Life Scale (WRQoL) to gauge thousands of people’s experience of work.

Their research showed that quality of working life tended to be higher in the under 25s and the 60 or over age groups, with the 25 to 59 year olds reporting the lowest quality of working life.  It also indicates that men experience a gradual increase in their levels of engagement and commitment to their work and employers throughout their working lives as well as an increase in quality of working life just before retirement. Women also tend to experience a slight increase in their levels of engagement just before they retire.

Of course it would be interesting to know why quality of working life improves at this stage – the general view seems to be that it is because older workers become more relaxed the closer they are to retirement – but it does seem to indicate that employers may be missing a trick by overlooking the value of people at this age.

If – as appears evident – older workers show increasing levels of employee engagement whilst enjoying their work, it provides compelling evidence as to why employers should put a greater focus on keeping people at this age. At present they are overlooking the potential of  a highly motivated and committed group of workers…who probably are rather well experienced too.

Click here for further information http://www.qowl.co.uk/qowl_press_engagement_bounce.html?pid=59327

Retirement Reform?

It was interesting to attend the Institute of Directors’ Roadmap for Retirement Reform presentation last Monday (October 19th) which they used to announce the launch of their new Centre for Retirement Reform.  On the face of it the presentation looked as if it would be largely about pensions but fortunately – and refreshingly – all the speakers seemed to recognise that pensions reform per se is not going to be enough.  Of course it was useful to be reminded yet again that our current pensions system was introduced when the average male life expectancy was 63 – what clearer evidence is needed of why it is no longer fit for purpose? But beyond this, the clear message from all seemed to be that meaningful impact in terms of reforming “retirement” will only come when employers create the culture, opportunities and support to help those people who want to, or need to, stay in work for longer. 

We look forward to finding out more about the work of the Centre as it develops. At this stage, perhaps we have two caveats.  Apparently one of the Centre’s first areas of interest is to be what are commonly labelled “olderpreneurs” – older individuals who start their own businesses. In respect of this we take the view that the focus needs to shift from helping older people to start a business (generally comparatively easy) to helping them build and sustain their business (difficult). Otherwise all that is happening is encouraging a new generation of business lemmings, racing towards a cliff-edge of failure and disappointment.  Additionally, and on a different note, we yet again call for the development of a new terminology. “Retirement” will only truly be reformed when we have an adequate vocabulary to describe all the various states (non-working, part-time working, portfolio working, self-employment, volunteering, etc) that are currently covered by this outmoded term.

 

 

Increasing State Pension Age: black and white…..or grey…?

Conservatives’ plans to raise the state pension age to 66 will make youth unemployment worse leading to a 200,000 rise in unemployment in the first year – many of whom could be young jobseekers. This is the view of Ray Barrell, Director of Macroeconomic Research at the National Institute of Economic and Social Research who made his prediction at this week’s Just Ageing Seminar, hosted by the Equality and Human Rights Commission (EHRC). He supported his case by commenting, “If we extend working lives effectively the people we will have to help in the labour market are not those who are in a job and can stay in it for another year, but those at the other end of the labour market who are looking for a job, and the job that would have come up for them is no longer available.”

Stirring stuff when accompanied by alarmist headlines such as Tory plan to raise pension age will add to youth unemployment (Personnel Today)

But surely it’s not that simple. Not only do young, incoming job seekers not automatically replace outgoing retirees due to lack of similar skills and experience, but not all older workers are going to want to keep working or, if they do, to keep working in the same job. Research has shown that later life career changes are becoming more desirable for older individuals with those who want to work increasingly seeking to do so under their own terms. And for many those terms mean working less and working flexibly. The sooner employers start to address these issues, the sooner we should stop hearing these types of argument which effectively are comparing apples with pears – and ultimately just don’t add up.

Indeed, the Personnel Today article does not reflect a balanced view of proceedings at the Just Ageing Seminar. In particular, Sheila Wild, Head of Earnings and Age Inequalities at EHRC, arguing why the Default Retirement Age should be removed, said “ It is not a contest between older and younger workers, but about ensuring everyone who wants to work has the appropriate skills, whatever their age. The UK Commission for Employment and Skills has predicted 2 million new jobs between now and 2020 – and most of them will demand higher level skills. In securing jobs coming out of recession, skills levels are likely to be the key factor, not age”.

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