Retirement could be one of the best decisions of life or even could be worst, depending upon a person’s attitude towards it. As this paper presents studies about this decision of life along with things that can be done after retirement along with the things that must not be done. After a life full of hard work, retirement must come as a cool breeze which comes and sooths the life. This happens to many who retire with a plan and it becomes hard for those who do not. This paper highlights the best and worst of both.
A general definition of retirement goes like ‘A point in life when a person stops employment completely is called as Retirement.’ Other definitions explain it as ‘withdrawal from one’s occupation, business or office’ or ‘withdrawal into privacy or seclusion’. After a lifetime of being employed, there comes a time in the life of the person when a person’s age or other circumstances asks the person to stop being employed and lead the life’s moments as he/she wishes. Retirement could be both Happy and sad. Depending upon the planning a person performed envisioning the retirement period in the coming future. A happy retirement could be the one where a person has planned financially to undergo his retirement phase full of comforts and the way he/she ever wanted. There will be no financial crisis or insecurity when a person plans properly and as per his requirement. On the other hand Retirement could turn sad when there was to financial planning to begin with, being left with no employment, a retired person may find it difficult to sustain through the retirement phase, in some countries though, government takes care of retired individuals but this is limited mostly to developed countries only. In most of the developing countries the system is not in place and retired individual has to plan and find own supporting source.
Age limitations to retirement:
Age limitation in the retirement is different for different countries. Age of retirement could be divided into two: Early Retirement Age and Normal Retirement Age. Although standard retirement age could be anywhere between 50-70 depending upon the country policy. A person is free to choose retiring age. He/she can retire early or after crossing normal retirement age, depends upon his/her planning and financial strength. Different countries have different limit of normal retirement age. In Germany and United States, Normal Retirement Age is 67 years, in most of the other European countries it is between 60-65. Also in United Kingdom, the normal age of retirement is 65 years. It can be said that the age of retirement depends upon person’s will only. There are many young people who earn fat salaries and thus retire early in order to pursue their passions. Hence the age depends upon the person and only him. Though he can take an early retirement but he has to follow government or company norms in the case of Normal Retirement.
Again retirement benefits are different from country to country. It totally depends upon the country’s retirement policy. After retirement, a sum is paid to the retiree from either government or the company he served, depending upon his employment. These benefits are also called as pension benefits. Pension is the fixed sum which is paid on regular basis to the person after retirement. Pension could be of three types: Employment based, state or social and disability. Employment bases pensions are those where arrangement to provide an income after retirement begins during employment only where employee and employer contribute certain monthly amount for after retirement benefits. Employee receives these benefits as regular income after retirement. Second is Social or state based retirement benefits. These are tax and contribution based schemes, performed by government for the retiring citizens. This scheme is called differently in different counties. In USA it is called as Social Security, named as National Insurance in United Kingdom, Old Age Grant in South Africa and Universal Superannuation in New Zealand.
Third is Disability Pension where pension is provided to the people who were struck with unfortunate events and turned to disability for life.
Pension Systems in different countries:
Though benefits are almost similar, but different country has different name and concept of pension system. Some call it provident fund, others call it social security. Let’s have a look.
In USA, Australia, Argentina and Sweden it is called as Social Security apart from other names also. Asian countries like India, Hong Kong, Singapore and Malaysia call it as Provident Fund. In Japan, Canada, United Kingdom it is called as either National Pension of Pension provision. At the same time it is also called as Retirement Savings Plan in United States and Canada. New Zealand and Australia also call it as Superannuation
This is the emerging problem. Here problem that is faced of corporate sector, social organizations and government in paying pension is related to age. Number of retiring individual is rising in comparison to birth rate. The source is diminishing and payments rising. Shifting demographics is lowering the number of workers in comparison to the retirees. The debate is beginning on the magnitude of the problem as, this problem could cause a big stir in the world of business also in working of Government.
Trends in the concept of Retirement
Life is changing fast, so are the concepts of living. Retirement that was once considered a stage in life where person grows old and thus take rest from official working, is now changed and today with lucrative earning opportunities, even youngsters are pursuing retirements. After few years of working they would earn enough to opt for early retirement and then enjoy life as they ever wanted. This has been the biggest change brought to society by the concept of retirement. These youngsters are not dependent upon either their previous employers or even state or government. They enjoy wholesomely on the basis on their savings and return on investments.
With the advent of global financial crisis, VRS also emerged as a big player. VRS is Voluntary Retirement Scheme. Here an employee is offered retirement benefits, usually a lump-sum amount for opting retirement earlier than usual age. VRS is becoming a common concept now and it benefits both employee and employer. Employer generally offers VRS to employees who are aging near retirement so that the vacancy they create can be filled by even more skilled staff. Also the benefit employee gets out of VRS is that instead of being fired he is offered a great amount to leave the organization. VRS is more humane concept of downsizing.
Problems related to Retirement:
As people reach retirement, they reach there with host of problems. Some might not just have planned properly, some planned but in wrong way, some are not mentally prepared to lead a different phase in life. There are numerous people and with them are numerous problems. Everyone has their set of problem to go with. Let’s see few of them.
1. Unplanned Retirement: There are set of people, who are so involved with life that they have no time for any sort of future planning. This is where they fail short of planning for retirement also. Enjoying their life they reach retirement and thus suddenly realize they have reached gates of a very different phase in life. Their retirement cannot be delayed and on the brink they just have nothing to go for. They have opted for no such saving scheme relying on which they can call it a happy retirement. Neither have they searched for any alternative plan for their physical and mental involvement. From doing it all, suddenly they are on the brink of doing nothing. This is the time they break themselves apart economically and mentally. Retirement is inevitable, but their ignorance has made it difficult for them. Although if they are living in the developed world, they have this option of social security but at times even that becomes insufficient to lead the lifestyle of their dreams that they were enjoying before.
2. Wrongly Planned Retirement: Knowing and planning for retirement will not be enough, one has to plan rightly. There are numerous retirement plans to choose from. But many instead of going for the safer side, opt for riskier ones. Not all the plans fail, but when they do, they destroy life’s saving in a click. When the world is going through a financial turmoil, it will be mindful if people go for safer investment schemes. Problem arises when people choose risky schemes for making money and fail.
3. Mental Preparation: Many people just love working. They just love being involved. The greater their involvement, the greater is their difficulty for retirement. Retirement also means no or less involvement. Such people who are passionate about their involvement must be prepared for a numb working period after retirement. Although retirement doesn’t mean total non-involvement but the passion reduces. Hence such people must either plan for some alternative or they can either be prepared mentally to face or even enjoy such phase called retirement in life.
Retirement looks like decision of Individual, but in reality it affects the entire family. Even in the era of nuclear families, retirement has its effects on the partner you are living with. Highlighted here are some issues which a person faces after retirement.
Family: Retirement, especially early retirement is not just an issue of individual but of entire family. If you are planning to take early retirement to spend time with your family and kids, you must inform and consult them also. As they also have to ‘adjust’ to your being home 24/7. A recent study in Australia suggested that Women find it easier to adjust with the retirement in comparison to men also at the same time women find it easier to adopt with the partner’s retirement in comparison to men.
Personal Satisfaction: After retirement it is very important for a person to be satisfied with life he/she is living. If a person does not feel satisfied he /she will be the reason for sadness for entire family. Although a study showed that women are always more satisfied then men as far as aspects of retirement are concerned. Study suggests that women are more satisfied with their life as a whole after retirement in comparison to their male partners. Study suggests that women are more satisfied in comparison to men with their personal and emotional life after retirement. Also they are satisfied with their standard of living, with the meaning and purpose of life or the person they wanted to be after retirement in comparison to men. At the same time women are more satisfied with their accomplishment after retirement in comparison to their counterparts.
Recommendations to the Retirement Issues:
Every problem comes with a solution. While retirement brought financial and involvement problems to few, it has also brought a new shine in life to many.
1. Diversify your investments: No matter how much you want to risk, invest a small amount in the safe options also. Risking at early stage of your career, may provide you benefits, as even if you fail, you can bail yourself out with the years to come. But at the same time you have to put small amount in safe options also, unfortunately if you lose a great amount with risky investment, you will always have safer options to incline upon.
2. Be with your family: Even though you are about to retire, you have a lot of things to be involved it. If you have not given much of your time to your loving family while employed, you can now spend most of your time with them. Share your love not just with your family but also with society. You can also get involved in social works if you feel like.
3. Do what you dreamt about: Everybody has dreams. While living an employed life, you might be nurturing some dreams. Positively taken, retirement can be a great phase for you to nurture your dreams. You can be an entrepreneur, doing things that you always wanted to. This way will not just provide you happiness but will ask for your involvement for a national cause and you will earn money also doing it. Provide the product or service that you always loved to have. If you have passion for cooking then this could be the time to nurture it by starting a small restaurant or any other passion you have.
As we have seen here, retirement is inevitable in a working person’s life. Either it comes out of age, or because of some unfortunate events or even by an early wish of a person. A person must plan to retire as soon as he gets employed. Savings of all the months while working add to his or her happiness after retirement. A person, who plans well, will live a happy retirement life and who does not, struggles. To save oneself from all the after retirement issues, one must try and plan not just retirement but also plan for life after retirement whether it will be a relaxing life with a family or a life full of passion for dreams.
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