When I’m 65
Back in the 1960s, retirement was akin to surgical shock. After 45 years of full-time work, the day you hit 65 it stopped. Gone were the daily structure, the office friendships, the work you’d trained for, the satisfaction of a job well done, and the fortnightly wage. Many wondered what to do next.
Now, there is no need to retire at 65. The Human Rights Act makes it illegal to discriminate on grounds of age. You can continue in the workforce well past the age when you qualify for the pension.
Much has been written in recent years about the need for employers to look at ways of helping older workers prepare for retirement, or making it easier for them to stay in the workforce if that’s what they choose.
But despite all the fine words, it seems little has changed. Most public sector organisations have failed to develop workforce management policies to support older workers in planning for this big life change.
Yet nearly one in three workers are over 50 and New Zealand has one of the highest rates of workers over 65.
Those over 60 will form an ever-larger proportion of the population as the birth rate continues to fall and people live longer. Older workers are now, and will increasingly become, an essential part of the workforce.
A pressing need
In countries similar to New Zealand, there is an economic imperative to retain older workers. The OECD pointed out in 2006 that employment practices and attitudes that discourage work at an older age have passed their sell-by date and need to be overhauled.
“If nothing is done to promote better employment prospects for older workers, the number of retirees per worker in OECD countries will double over the next five decades. This will threaten living standards and put enormous pressure on the financing of social [welfare] systems.
“To help meet these daunting challenges, work needs to be made a more attractive and rewarding proposition for older workers.”
Employers are generally slow to wake up to this need, which is particularly pressing in public services. The health and education sectors, for instance, would struggle to provide decent health and education services if everyone decided to retire at 65.
“With an ageing population, we need older workers to keep working for as long as they can,” says Diana Crossan, until recently the Retirement Commissioner.
“For many people, this is a good thing. They can stay economically involved, they can stay socially involved, and they can plan when they want to leave. You can keep working past 65 and get your pension. It’s one of the most flexible systems there is, and best for the country,” she says.
Our universal pension is paid to everyone from the age of 65, including those still in paid work. The extra income allows some over-65s to work part-time as part of phasing out of the workforce. Others can use it to boost their retirement savings. And all will continue to pay tax which has to be of benefit to the economy.
But without extra savings, the pension will make for a frugal retirement. For many people, continuing to work after 65 is an economic necessity, she says.
“Those who’ve been on the minimum wage and unable to save find the pension alone isn’t enough. There are those who lost their savings with the collapse of finance companies. But the other reason to continue working is that we are living longer and healthier lives and many are simply not ready to retire.”
However many people decide to retire at 65 or earlier and for good reasons. They may want to concentrate on their family or have lots of things they didn’t have time to do before. Older people often have elderly parents to care for or are helping raise their grandchildren. For some, health issues may be a factor, especially for those in physically demanding jobs.
But some of the reasons people give for deciding not to continue working can be sheeted home to their employer. A study by the Ministry of Social Development shows that a third of those who retired by 65 did so because of ageist attitudes to older workers and a lack of flexibility around hours.
If we are to retain the skills and experience of older workers, employers need to make them feel valued members of the team, with the same opportunities to fully participate and gain new skills.
Employers also need to start taking into account the needs of older workers who may want to work fewer and more flexible hours so they can gradually shift the balance between work and home or because they have family members who need extra attention and care.
In a recent report by the Human Rights Commission – Older Workers: challenging the myths – the EEO says we need to challenge myths and stereotypes about older workers, or risk losing much-needed skills. Among the most pernicious of these is that older workers are more prone to health problems, can’t adapt to change, are less productive represent a poor return on training investment.
The evidence shows this is longer a tenable view but it is deeply ingrained in the culture of many workplaces.
Neither does the evidence support the view that older workers are taking jobs from young workers. “When women entered the workforce, it was said it would make men unemployed,” says Diana Crossan. “Of course, that didn’t happen. As more people came into the workforce, more jobs were created. It’s the same with older workers.”
This article is from the March 2013 issue of the PSA Journal. You can read back issues of the Journal by clicking here.