Why the big rush to retire?

A large body of research suggest those who maintain the rigours of working life have better physical health outcomes, so why the rush to retire?

Recent debates about retirement issues on social media across the UAE raise interesting questions about our perception of the value of retirement and its benefits to individuals and society.

The General Pensions and Security Authority has said that no change to current retirement ages for Emiratis are imminent. However, it has indicated that timely discussion is taking place on how to best manage and fund pension provisions to ensure the most effective use of the country’s financial and human resources.

Retirement only dates back to the late 19th century and the Industrial Revolution. Germany was one of the first states to legislate a policy for workers, setting the retirement age at 70 and later 65. Even before Germany’s social pension initiatives, there are records from medieval Ireland relating to what was known as Brehon Law, placing responsibility of kinship on a person’s family to look after those who were unable to work because of age or sickness — a system not unlike Bedouin traditions of caring for the elderly.

The driving principle behind these initiatives was essentially humanitarian, putting in place formal structures within societies to ensure that those who could not look after themselves were provided for. An essential aspect of these policies was also the view that individuals within the community contribute, to degree to which they are able, for the benefit of the community. In industrialised societies this equated to working outside the home to attain the resources – money — necessary to provide life’s essentials and luxuries, or working within the home to maximise the efficient use of the available resources.

Discussion about resources is central to the retirement issue. Where do the funds to provide individuals with pension payments come from? Following the economic crisis of 2008 many industrialised countries have actually increased the age of retirement because the funds necessary for pension payments have evaporated with the near collapse of financial markets. Retirement ages for different countries in Europe vary, but an average age of 62 is the current norm, with discussion of increasing that age to 67. The combination of a large ageing population with a significantly higher life expectancy and decreasing resources to fund pensions is causing social strain and challenging our views on entitlements for retirement.

Somewhere over the course of the past 50 years the notion of retirement has mutated. Social provisions for those who retire have taken on the impression of a type of reward for work that has been done, rather than a basic provision to sustain those who are no longer able to work. The idea of early retirement has become associated with the idea of a person’s success or prestige. Those who can retire early might be viewed as having already made such a significant contribution to their communities through their work that they are no longer obliged to carry on. Of course this is an oversimplification of any individual’s case, and many people contribute very meaningfully to their societies, communities and families well beyond retirement.

However, if a person’s basic needs are not being met through the rewards they get for the work they do, then where do the resources come from to meet those needs? In many cases the answer to this question is the government, but government resources are finite. Every dirham, dollar or euro we spend on pensions is a dirham, dollar or euro that we do not have to spend on improving infrastructure, health care, education, security and other important government goals. Even if the resources are available, is rushing to retirement really a desirable option? Social research on the effects of retirement suggests it may not be.

A large body of research suggest that people who maintain the rigours of working life have better physical health. The routine of work helps keep the body functioning at its optimum level.

Maintaining work also has significant positive benefits on the human mind. The purpose and value that people derive from their work and the image of themselves that they maintain because of their work all contribute to good mental health. People who retire sometimes report a very positive increase in their well-being, but this often only lasts for a very short period of time. Happiness in the initial six months of retirement often turns to decreasing satisfaction and well-being, and in some cases serious depression.

The reality of this discussion is that retirement need not be a black or white situation. If we think creatively about this issue and put in place flexible workplace practices, we can create an environment where older workers can enjoy some of the benefits of semi-retirement while maintaining a level of physical and mental engagement with the workplace that helps to promote positive physical and mental health outcomes. Rather than focus on age limits or a specific number of years served, it might be useful to shift the discussion towards generating creative workplace policies that assist in the transition from work to non-work, regardless of age or gender. Flexitime, job sharing and part-time work practices should be key topics in any discussion on retirement.

James Ryan is an associate professor of organisational behaviour and HRM at United Arab Emirates University