The Retirement Debate

Wow! I started this one three weeks ago and then watched in amazement as the Banking industry, at least in Britain (and possibly elsewhere for that matter), has managed to demonstrate what happens when you let the lunatics run the asylum. Clearly, given my professional background, I am on thin ice here - but let me get the retirement issue finished and I shall return to the topic of the day.

My initial Blog was started when I noticed that the debate over retirement was, once again, looming large. As you might imagine, it is a topic of more than just passing interest to this working retiree!!

The underlying debate is split into two so, not wishing to behave like a one handed economist, on the one hand there is the discussion revolving around the fact that if the older people carry on working beyond the "accepted" retirement age, then the younger ones are apparently being denied the opportunity to enter the work force - while on the other hand part of the community now wants to retire at 50 instead of 60 or 65. And any attempt to increase the retirement age is met with fierce resistance.

As my principal concern deals with the former - let me address briefly the latter. Why not allow people to retire "early" if they can afford to do so? And if the Government and is paying, why not take an early break as long as you have contributed enough to the system to cover the remaining 30 or 40 years of their life - as life expectancy continues to lengthen? But can you reasonably expect the State to return to you what you haven't given them, or do think that your children, grandchildren and maybe great grandchildren should be forced to pay for you to have an easy life when you are still healthy enough to contribute? I don't think that's altogether fair and, in the immortal words of Rebekah Brooks "... we're definitely in this together".

But on the other hand ...

I have to ask what is wrong with people continuing to work on after they have reached a certain "age" - an age plucked from the air almost, as being an appropriate point at which one should stop working? If they still have the desire to work, the ability to work ... and can add value to what they are doing.

In my own case, I am very conscious of a number of facts. Firstly, I only want to carry on doing things while I can be of use. I want to be able to say - at the appropriate time - "I don't think I have anything to contribute that cannot be done by anyone else". I do not want to be in the situation where an "employer" feels the need to come and say to me "David, sorry but you have to go". Neither do I want to be a burden to anyone - the State, wherever I choose to live, or the family. I want to be independent, and I recognise that I have been lucky enough to get close to that position whereas others have not. But the bottom line surely must be - if there is some value - then use it.

And what about the clamour at the other end of the age scale? Those who are using, as an excuse perhaps, the fact that people are staying in the work place longer than before - and are therefore denying jobs to the young.

What do they suggest - enforced retirement? And with the continuous improvements in longevity, what are the young of today going to do when they reach a "to be enforced" retirment age? I suspect they too will want to carry on working in many cases.

It seems to me, therefore, that the debate should not be about old-fashioned ideas of retirement and ages. (Our ancestors, remember, usually worked until they were carried feet first away from their work place).It needs a new debate that considers the age one starts education, that reviews what could be done during the period of time from the end of high school/secondary school/university to perhaps add practical skills and knowledge to the academic process that has already taken place and perhaps a later start at work than has hitherto been the case. 

It is just a start - a change of thinking. And it's a discussion that needs to take place sooner than later, involving the young and the older.

Comments

[June]

Thanks, David, for raising the retirement subject. Seeing you are producing 2 blogs in 2 days, I guess you are definitely not heading towards idle retirement any time soon! ☺

Indeed, this is a subject close to my heart, partly because of my earlier career as an actuary involved with the design of pension systems. It seems to me there are two issues going on:
1.The retirement age of 55 or 60 was set decades ago when life expectancy was more like in the 60’s or thereabouts, than in the 70’s/80’s, or even 90’s. Why shouldn’t we revisit this when we are living considerably longer than our ancestors? [Now I don’t have the details/figures/dates at my fingertips, but I am sure you will be able to find them!]
2. It seems to have become fashionable and desirable to take early-retirement. Either people want to look successful (“I have done so well that I can afford to retire early!”), or/and their philosophy is that life is too short and one should start to enjoy life sooner. If more and more people think like that, and if there is not enough savings on the “private/personal” side of the equation (which is the problem in many countries), the old-age burden is just going to get worse.

I always find it disturbing to imagine someone starting work at 25, then retire at 55, so he/she would have worked for 30 years – but with advancement in medicine and healthcare it is very likely that this person would be living retirement years for 30 years, or more. This is a very different situation from when people worked 30 years and then perhaps on average lived retirement life for say 10 years or so.

I am not suggesting that people therefore should die earlier!! What I am getting at is the ratio of the working population vs the dependents.

I am therefore definitely in the camp of having those who are fit and adding value to continue to work and be productive! Of course, as you pointed out, there is also the other side of the problem of youth unemployment – but I do believe that problem is related to other social and economic factors and so should not be muddled up with the argument of allowing older (yet fit and qualifying) people to work. Naturally, politically it would be a challenge to get the balance of addressing the two problems right, and with the economy looking rather sick in most major countries, this is going to be even more difficult.

So, my conclusion? Definitely agree that we should continue to discuss. And we should involve the young, the older, and the In-Between (like me)!