Knowing when to retire in today’s world can be tricky as people are living longer while savings or pensions may not be sufficient enough to provide for them in their senior years. There are also the mental and physical benefits of working longer to consider.
But while many of us may want to work for as long as possible, there are significant hurdles facing older people in the workforce – the most basic of which is whether or not they’re considered employable after a certain age.
In a recent global poll of more than 20,000 respondents across 28 countries, people, on average, said they need to work until age 59 before they could retire. That’s not far off 57, the age until which people said they want to work.
But when it comes to how long people think they will be able to find work or be considered employable – the average age is 49 – showing a big difference between the age when people feel they’re capable of working versus when they think they’ll be able to find work.
Added to this, the ages for employability, capability to work and retirement are much lower in emerging markets compared to developed ones. For example, the countries with the lowest ages for people feeling physically and mentally capable of working are Poland, Malaysia, Saudi Arabia, China, Russia and Turkey. On the same measure, the United States, Sweden, Canada and Chile had the highest age at 66.
Tomas Chamorro-Premuzic, Professor of Organizational Psychology at Columbia University in New York, said the retirement age in many countries is out of date and hasn’t kept pace with changes in culture driven by two key factors in the last 10 to 15 years.
“The first is that retirement money or pension funds, in most instances, are no longer enough for people to maintain the life quality that they have. In other words, you need to work longer to save more to maintain your lifestyle,” said Prof. Chamorro-Premuzic.
“The second factor is for people who have more money than they need, but still want to stay at work, because they are interested in something to keep them well occupied.”
He adds there’s a status element where if you can keep being useful or valuable to the economy even if you are 60, 70 or 80, you feel better and have higher pay – referring to jobs where age reflects work experience like heads of state or companies, and in politics.
“Life expectancy keeps being pushed forwards and forwards and that has financial implications,” said Prof. Chamorro-Premuzic. “That also means a lot of things happen later in life, and we postpone adulthood to begin with, then we postpone retirement as well. So, it takes some time for attitudes to catch up with these changes.”
David Foot, Professor Emeritus of Economics at the University of Toronto, agreed, adding that varying life expectancies between developed and emerging markets could explain why there’s a noticeable gap in retirement ages for the two groups.
The global life expectancy at birth in 2016 was 72, according to the World Health Organization, which reported the increase by 5.5 years between 2000 to 2016 was the fastest increase since the 1960s. The average life expectancy in the Americas and Europe was about seven to 15 years higher than in Africa, Southeast Asia and the Middle East.
‘Use it or lose it’
In terms of what can be done by governments and policymakers to make people feel more comfortable about working longer, experts say phased retirement programs, especially in the private sector, and initiatives that take the focus away from age in determining job performance would help keep people employed longer.
Prof. Chamorro-Premuzic said employers need to deemphasize age as a main factor in employment, promotion and retirement, because it is overrated.
“Age is not a relevant factor in determining job performance. It’s your ability, personality and job experience,” said Prof. Chamorro-Premuzic, adding the retirement age in countries should be pushed even higher, but not only because governments are financially incentivized to keep people working longer.
The key goal should be to keep people intellectually active and engaged, according to Prof. Chamorro-Premuzic.
“There’s a lot of research on the so-called ‘use it or lose it’ principal that shows when people stop being intellectually engaged, they stop learning or performing, or you remove them from their occupations or hobbies they’ve been used to all their lives, they decline faster,” he said.
“We are retiring people, because we think they have declined intellectually. But actually, it’s the opposite. It’s because we retire people that they will decline intellectually.”