Recently, I sat down with my dad to chat about retirement, and he shared some pretty eye-opening thoughts. “I know of people who retire, and they fall in a big hole. Even my dad was like that. He had a senior job in Wellington, and his whole life and status were wrapped up in that job. So when he retired, he kind of fell in a hole.”
My dad recounted how, during that time, he was overseas and came back to find my grandfather “just lying around the house.” It was a real shock. “I thought, gee, that’s not great, you know.”
The conversation got me thinking about how important it is to really prepare for retirement. As our population ages and people live longer, healthier lives, the idea of retirement is changing. Instead of the old model of stopping work cold turkey at 65, more people are choosing to work longer or ease into retirement gradually.
This shift brings both challenges and opportunities for people, workplaces, and society as a whole. In this article, we’ll dive into the ageing workforce, discuss why it’s crucial to prep for retirement at any age, and share tips for personal wellbeing, supporting others, and creating age-friendly workplaces.
The Ageing Workforce: A Growing Reality
Statistics from the World Health Organisation and Financial Services Council New Zealand paint a clear picture of an ageing workforce in New Zealand and globally:
- By 2030, 1 in 6 people in the world will be aged 60 years or over.
- The number of people aged 60 years and older is expected to double to 2.1 billion by 2050. • In New Zealand, the number of people aged 65 and over is projected to increase from around 750,000 in 2020 to over 1.3 million by 2048.
- The labour force participation rate for those aged 65 and over in New Zealand has increased from 11.4% in 2001 to 24.8% in 2020.
These figures really emphasise how crucial it is to rethink our approach to work, retirement, and financial planning as we navigate an older workforce and longer retirements.
Working longer is becoming the norm, and it’s happening for a whole host of reasons. First, with life expectancy on the rise, many of us have a lot more years ahead after reaching that traditional retirement age. This reality often pushes people to keep working to ensure they have enough savings to enjoy life.
Then there are the financial pressures we can’t ignore. Rising living costs, insufficient pension savings, and the gradual disappearance of defined benefit pension plans mean many people need to work beyond the standard retirement age just to maintain their quality of life.
We’re also seeing a shift in social attitudes, with many older workers wanting to stay engaged in their jobs because they find real satisfaction and purpose in what they do.
The way we work is changing too – more flexible and remote options are available, which lets older employees keep contributing to the workforce while managing their health and personal interests.
Lastly, in some industries, there’s a real push to keep experienced workers on board due to labour shortages. This shift is prompting organisations to adapt their strategies, focusing on supporting an aging workforce through lifelong learning, creating accessible work environments, and offering phased retirement options.
Personal Wellbeing: Preparing for Retirement at Any Age
While retirement might seem a distant prospect for younger workers, the actions taken early in your career can have a significant impact on retirement outcomes.
Here are some key considerations for personal wellbeing and retirement preparation, regardless of age:
- Start saving early: The power of compound interest means that even small contributions made in your 20s and 30s can grow significantly over time. Investing in your retirement fund (in New Zealand, that’s KiwiSaver) and other retirement savings will help you to build a nest egg.
- Develop a growth mindset: Embrace lifelong learning and skill development. It’s not just about boosting your employability; it’s also a fantastic way to keep your mind sharp and engaged as you age.
- Prioritise your health: Taking care of your physical and mental wellbeing throughout your life can help lower healthcare costs in retirement and significantly enhance your quality of life (and length of life it might be said too).
- Build diverse social networks: Nurture relationships both in and outside of work. Strong social connections are key to your wellbeing, especially in retirement. A lack of social ties can really make retirement feel lonely and isolating. So, get out there and connect! Consider it another investment in your retirement life. Whether it’s joining a club, volunteering, or just catching up with friends, having a solid support system can totally transform your life for the long haul and keep you feeling engaged and fulfilled.
- Explore your passions: Think about how you can turn your hobbies or interests into part-time work or volunteering gigs when you retire. It can add purpose and joy to this new chapter.
- Stay financially savvy: Keep educating yourself about personal finance, investment options, and retirement planning strategies. Knowledge is power when it comes to securing your financial future.
- Be adaptable: Understand that your retirement plans might need to change as life unfolds. Regularly reassess your goals and strategies to stay on track.
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Supporting Others: Creating an Intergenerational Workforce
An ageing workforce opens up some amazing opportunities for us to collaborate across generations and share knowledge. Here’s how we can support our older colleagues and create a vibrant, multigenerational work environment:
- Challenge age-based stereotypes: Age doesn’t define ability, creativity, or productivity. Everyone has something valuable to contribute, regardless of their years, so understand what stigma exists in your business and stamp it out.
- Facilitate mentoring programs: Encourage older and younger workers to connect through mentoring, whether it’s a formal program or casual catch-ups. This exchange of knowledge can be incredibly enriching for everyone involved.
- Promote age diversity in teams: Make sure project teams and committees are a mix of ages. Different perspectives lead to better ideas and solutions, and everyone benefits from that diversity.
- Advocate for flexible work arrangements: Support policies that let older employees ease into retirement with phased options or part-time roles. This flexibility can make a world of difference.
- Encourage lifelong learning: Ongoing training and development benefits all employees, no matter their age. And there is plenty to be gained from learning environments that embrace diversity of age and experience.
- Foster an inclusive culture: Create a workplace where every employee feels valued and respected, regardless of age. An inclusive environment boosts morale and productivity.
- Recognise the value of experience: Don’t underestimate the wealth of knowledge that long-term employees bring. Find ways to celebrate and leverage their expertise. Too many organisations let good knowledge walk out the door, which is massive missed opportunity for the person and the workplace.
Tips for Workplaces: Creating Age-Friendly Environments
Employers have a key role to play in supporting an ageing workforce and helping employees get ready for retirement. Here are some strategies to create age-friendly workplaces:
- Offer comprehensive financial education: Provide workshops, seminars, and resources that cover retirement planning, investment strategies, and overall financial wellbeing. Knowledge is power! From client experience, you might need to think about how you pitch this. A budgeting workshop might not get many takers because people don’t want to be thought of as unable to manage their money. Instead, choose something like ‘grow your money’.
- Implement flexible work policies: Allow for reduced hours, job sharing, or remote work options. This flexibility can really help meet the evolving needs of older workers.
- Invest in ergonomic workspaces: Make sure work environments are comfortable and accessible for everyone, regardless of age or ability. Everyone deserves a workspace that works for them.
- Provide health programs: Consider offering initiatives that promote both physical and mental wellbeing, like health screenings or mental wellbeing workshops, which will help your workforce stay well at any age.
- Create opportunities for skill development: Offer training programs that help employees refresh their skills and learn new technologies. Lifelong learning keeps everyone engaged and capable.
- Review recruitment and retention practices: Ensure hiring and promotion processes are free from age bias, focusing on skills and experience instead. Everyone should have a fair shot, regardless of age.
- Develop phased retirement options: Create programs that let older workers gradually reduce their hours or responsibilities while mentoring younger colleagues. It’s a win-win for everyone!
- Foster a culture of appreciation: Recognise and celebrate the contributions of employees at all career stages. Everyone’s input matters.
- Conduct regular check-ins: Encourage managers to have open conversations with employees about their career goals and retirement plans. These check-ins can make all the difference.
- Partner with retirement planning experts: Bring in financial advisors or retirement specialists to offer personalized guidance to employees. Having expert advice can help employees feel more secure about their future.
The Importance of Regular Reassessment
One of the key messages retirement planning experts keep hammering home is that planning for retirement isn’t a “set and forget” kind of deal. It’s crucial to regularly reassess your retirement plans, no matter how old you are. Here’s why:
- Changing circumstances: Big life events – like getting married, going through a divorce, having kids, or switching careers – can really shake up your retirement plans.
- Economic fluctuations: Things like market ups and downs, inflation, and changes in interest rates can impact how well your retirement savings are performing.
- Policy changes: If superannuation policies, tax laws, or pension schemes change, you might need to tweak your retirement strategies to keep everything on track.
- Health considerations: Your health can change, or advances in medical tech might alter your life expectancy and what you’ll need for retirement.
- Evolving goals: As you move through different life stages, your dreams for retirement and your financial needs are likely to shift.
- Technological advancements: New financial products, investment options, and retirement planning tools are always popping up. Staying in the loop can benefit your planning!
Experts recommend checking in on your retirement plans at least every few years or even more often if there are big life changes. This way, you can make timely adjustments to your savings, investment strategies, or retirement timelines, keeping you on track to hit your goals.
Being retirement-ready
Preparing for retirement is a lifelong journey that requires our ongoing attention and a bit of flexibility. By starting early, staying informed, and regularly reassessing our plans, we can work towards a financially secure and fulfilling retirement.
Workplaces that embrace age diversity and support employees in their retirement planning don’t just help their teams – they set themselves up to thrive in an increasingly multigenerational workforce.
Remember, what we do now – whether for our current wellbeing or future savings – really counts. By taking a proactive and flexible approach to retirement planning, we can shape a future that aligns with our evolving needs and dreams, no matter where we are in our careers.
References:
- Financial Services Council New Zealand. (n.d.). Guide to retirement planning. https://blog.fsc.org.nz/guide-retirement-planning
- National Academies of Sciences, Engineering, and Medicine; Division of Behavioral and Social Sciences and Education; Committee on National Statistics; Committee on Population; Committee on Understanding the Aging Workforce and Employment at Older Ages; Becker T, Fiske ST, editors. Understanding the Aging Workforce: Defining a Research Agenda. Washington (DC): National Academies Press (US); 2022 May 5. 3, Work and Retirement Pathways. Available from: https://www.ncbi.nlm.nih.gov/books/NBK588533/
- World Health Organisation. (n.d.). Ageing and health. https://www.who.int/news-room/fact-sheets/detail/ageing-and-health
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