The Work to Retirement Transition: Adapting to the New Retirement
By Nancy Conroy
December, 2006

Introduction

We are very fortunate that a great deal of research has been conducted on aging and retirement and this research has documented a number of important facts about today’s mature workers and the way their view of work and retirement is changing. Furthermore, considerable research has zeroed in on the baby boom generation in an attempt to predict how baby boomers are influencing and will influence the nature of the work to retirement transition. This paper examines some of the important facts we know about today’s mature workers and their retired counterparts, offers some practical suggestions to employers about what they can do to adapt to this new reality, and then speculates on what the future may hold for Canadian society as the baby boomers swell the ranks of those in the retirement zone.

What Do We Know?

This paper examines the population of individuals who are roughly between 50 and 70 years old. Those at the leading edge of the baby boom have just turned 60 and this means that a large number of the people in this age range come from the baby boom generation. We know that their numbers are going to increase rapidly in this age range over the next several years. Many of these individuals are still in the workforce but some are already retired and many are eligible to retire within the near future.

In general, we know that those between 50 and 70 are:

• Healthier than any generation that has come before,
• Wealthier than any generation that has come before, with a few important exceptions, and
• Living longer than ever before.

In examining the new pathways into retirement, it is helpful to examine two separate groups—those who are still working and those who are already retired. Here is what we know about the first group.

• They are experiencing high stress levels. The work of Duxbury and Higgins, has certainly documented this. They have found that this is true for all workers, not just those over 50. And she has found that stress levels have been rising.
• Surveys of mature workers indicate they would like to work fewer hours, would like more flexibility in their work lives and would like to feel more appreciated.
• Workers in this age range have entered the pre-retirement zone. Many are approaching the age requirements in their employer pension plans and also the age requirements for public pensions, not to mention the ‘normal’ age for retirement.
• Dual earner couples in this age range are facing a more complex planning equation as they plan for two retirements.
• Surveys shown that many mature workers intend to both retire and work, most say part time, with some studies showing the number is as high as 70-80%.
• Increasing numbers of mature workers are self-employed. In a recent CIBC survey, they found that the growth rate in the past three years of entrepreneurs over 55 was 30%, four times faster than for those below 55.

These facts are all very interesting but what does it mean for today’s employers of mature workers. Here are some suggestions for these employers:

• Know the facts about today’s mature workers (like the ones recently presented at the Summit on the Mature Worker) but also make sure you know the facts about your own workforce. They may or may not reflect the generalized picture.
• Examine the degree to which ageism exists in your organizations and take steps to make your workplace more age friendly. Today’s mature workers do not consider themselves to be old and they don’t want to be treated as if they are, especially the boomers. If you want and need some of these mature workers to stay because of looming shortages, you could be unknowingly pushing these mature workers towards retirement because of ageist attitudes.
• Make it easier for mature workers to stay by taking into account their desire for less stress, shorter hours, and meaningful work. There is considerable information available now with respect to the best practices of those progressive organizations who are adapting.
• Make sure that your mature workers do not feel that the minute they declare their interest in retirement, they will be sidelined.
• Lastly, now that more and more employers are moving away from forced savings plans (defined benefit pensions) and placing more onus on employees to manage their own financial futures (defined contribution and Group RRSPs), it is time for employers to make sure their employees have the knowledge and the skills they need to do this effectively. Training in life and retirement planning would go a long way to achieving this.

Now lets shift the focus to people between 50 and 70 who are already retired – these are potential mature workers. Here are some of the facts we know about them:

• Individuals in this age range are beginning to experience the loss of loved ones and may find their values shifting.
• Quality of life is becoming more importance and time begins to take on greater importance than money. This shift in values plays a role in how people think about the timing of their retirement.
• Retirees are happier on average than all other groups in society
• Studies on retirement tend to find that roughly 70% of retirees are happy in retirement, with about 30% of the people reporting some dissatisfaction. There are a number of factors contributing to this. Being forced to retire, not having enough retirement income, loss of identity, and loss of social networks are often cited.

So again, we have to ask the question, what should employers do about these facts? Here are some suggestions for recruiting these employees back to work.

• Maintain contact with employees who retire through mechanisms such as a retiree association, a retiree work pool, office events to which they are invited, a retirement newsletter
• Be aware of what will entice them back. Ideally an organization would find out from about-to-retire employees what would entice them to continue to work for the organization once they retire. Certainly current research suggests part time work, meaningful work, and flexible hours are some of the criteria cited by retirees.
• Rethink the structure of work in your organization to accommodate more flexible work schedules
• Examine pension and benefits policies and adapt them to make it easier to rehire former workers.
• To recruit retired workers, target those most likely to come back into the workforce such as those who do not have enough retirement income (mostly women), those who miss work (more likely to be men) and especially those who were in professional or management positions.

If the intentions of pre-retirees who say they plan to work at least part time in retirement are actually carried out, there should be a pool of retirees who will return to work. Some will do so because they need the income, but many will also choose to do so because they want to.

Some Predictions

• Whether action is taken to adapt to the facts about mature workers, change is going to occur in the work to retirement transition and it is and will continue to be driven by baby boomers.
• Ageism will disappear. Baby boomers, through their activism, and employers, through their need to retain mature workers and also to lure retirees back into the workforce to meet labour shortages, will both contribute to a change in how we view aging and mature workers.
• Phased retirement will become the norm as semi-retirement becomes the state of choice for people between 50 and 70.
• Labour shortages will be created as the baby boomers move into retirement; however, they will also be part of the solution as many will choose to work at least part time in retirement.
• Boomer retirees, once liberated from full time work, will pour their energies into creative endeavours, including self-employment and will fuel a mini-renaissance in Canadian society.

Facts about mature workers and the new retirement are widely available, with more studies being done every day. Progressive organizations have already begun adapting to this new reality. However, it is now time for governments and the rest of the private sector to put in place policies and programs that facilitate our adaptation to this new and exciting stage of life that is being created as boomers move into the retirement zone.