How employees can plan holistically for retirement
Workplace Thought Leadership Team | August 10, 2021
COVID-19 has heightened many people’s concerns around financial security and called into question their retirement plans.
Some employees approaching retirement have chosen to stay in work for longer than planned. Meanwhile, some other employees have chosen to retire sooner than planned, found the Institute for Fiscal Studies.
Both cases may have been driven by people’s (different) reaction to the lockdowns. For some, being cut off from the day-to-day reality of their working lives left them without a sense of purpose. Meanwhile, other people perhaps found the additional hours of freedom from the routine of work invigorating and opened up new horizons to explore.
Yet many people are less well prepared for retirement, psychologically, than they might like. Two-thirds (67%) of people don’t have a clear plan for retirement, according to Standard Life’s quarterly consumer survey. And around 60% of people have never had a conversation with their family or friends about their retirement planning, according to our survey of the Irish market.
On average, we’ll each have around an extra 2,000 hours every year when we’ve retired. This figure could be much larger for some people, once you add in time spent commuting to and from work and with colleagues in non-work-related activities outside of working hours.
A lot of people are excited by this prospect. But others are daunted by it, and wonder: “Who am I if I don’t get up in the morning and go to work?”
Such employees often delay retirement or enjoy the experience less than they might.
Transitioning into retirement requires careful consideration and planning before and after the event. With the right preparation and mindset, retirement can often lead to a fruitful second life. People can rediscover who they are, or in many cases discover whole new aspects of themselves.
Employers can support holistic preparation for this new chapter – thereby helping their employees to remain active, healthy, vibrant, and more in touch with the world around them once they retire.
So, what wider factors can make for a fruitful and happy retirement?
Preparation is key
Our research into the Irish market is instructive for the whole of the UK. In the quarterly Second Life study – which surveys 1,000 adults about their attitudes towards retirement – Standard Life asked participants to think about somebody they knew who had retired really well and why they perceived them that way. Then we asked them about somebody who they perceived to be living a bad retirement, and why?
The top-five reasons for a good retirement were:
- Financial comfort
- Spending time with people
- Spending time on pastimes and hobbies you enjoy
- Having an overall sense of purpose
- Continuing to learn and develop and grow
On the flip side, the top-five reasons for a bad retirement were:
- Poor physical health
- Poor mental health
- Financial poverty
- Chronic loneliness
- Complete loss of self-identity
These findings show that preparing how to fill your time in retirement with hobbies and relationships, and continuing to work and develop skills, can positively affect your sense of purpose and identity, and ultimately how well you retire.
Engaging employees in this preparation can be as simple as encouraging them to visualise their retirement. Changing the narrative and the language used around pensions and retirement can also help to increase employees’ engagement with this subject.
For example, at Standard Life we launched a content series where we met inspiring “Second Lifers” who were doing amazing things with their retirement, which has helped to show a different vision of retirement.
It’s also worth asking employees approaching retirement to consider the social and personal impact of their forthcoming retirement – and to discuss this with their partners, families and closest friends.
A few simple questions can help to focus the conversation. For example, who will you retire with? What kind of social network do you have? How closely linked is your social network to your working life, and how strong will your social circle be in retirement?
Flexibility and balance
Of course, there is no such thing as a cliff-edge retirement. Retirement is increasingly a phased level of thinking and then a phased approach.
Providing flexibility and support to employees making their end-of-career transition can help them to find a new balance of activities and their new sense of identity.
When facing an unknown future, creating space for experimentation is important – otherwise employees won’t know what their options are. Gradually approaching this transition allows prospective retirees to create and explore their options. This discovery phase helps close the gap between perception and the reality of trying new things.
So how can employees transition successfully?
As well as diving into new or existing passion projects, volunteering, engaging with the community, and investing in life-long learning often feed into discovering one’s sense of self.
Retiring well is also helped by nurturing relationships and networks. It helps to be intentional when making these efforts: having or creating a broader network is critical to any big change in a person’s life – including mixing with people of different ages.
A person’s sense of identity lies not just in where they are today, but also in their plans for the future. Employers can help employees with these future plans by increasing communication and engagement around life after work, including encouraging them to visualise their retirement – thereby helping to improve their workforce’s wellbeing for today and in future.
 Based on the calculation: 50 weeks multiplied by 40 hours a week.