Vikrant Massey, a critically acclaimed actor, bids adieu to the spotlight, leaving us wondering: When’s the right time to hang up the boots and master the life-work juggle?
It is often said that there is no right time for anything. PhDs at 70 to startups at 5, and skydiving at 80 prove that life doesn’t follow a script, so why should retirement?
Although there are different notions as to when the word, ‘retirement’ actually came into daily use, its meaning still confuses many. Is it just about retiring to bed and sitting around? Oh no! It is much more than that. Back then, the premise of retirement was the relative inability of individuals to perform certain tasks due to physically demanding tasks. Advances in medicine have led to longer, and more vigorous lives. Therefore, for a lot of people the concept of retirement doesn’t hold much relevance now.
Today, retirement comes with ‘Bridge Employment.’ Bridge employment refers to work undertaken by individuals during the transition between their primary career and full retirement. It often serves as a “bridge” to ease the shift from the traditional workforce to a life of complete retirement. The personal meaning attached to a career is a deciding factor for retirement. Work doesn’t mean the same thing to everyone: for some it represents a true calling, for rest, it is merely a source of income.
The United Nations (UN) has predicted that the number of over-65s will more than double from 2021 levels by 2050. From 2000 to 2019, global life expectancy increased from 67 years to 73. And as the population ages, many countries will soon reach a point where more people are leaving the workforce than are entering it: in the UK, that point may be reached by 2029; in Brazil, by 2035; in India, by 2048; and in the US, by 2053.
Turning 60 would open a golden portal to retirement. Yet increasingly, the idea of stepping away from the workforce doesn’t seem realistic in today’s times.
Retirement age and income levels of an individual show a correlation. Higher labour income decreases the likelihood of early retirement, while greater pension entitlements increase the chances of retiring early. Private wealth or personal endowments also play an important role in early retirement. Examining different retirement paths shows that low-income households are most influenced by involuntary retirement, whereas those with middle incomes are more likely to retire voluntarily. The mixed results regarding the impact of income on early retirement are often explained by a trade-off between income and leisure, like labour supply decisions.
Macroeconomic viewpoint
The ageing of the population is a concern from a macroeconomic viewpoint and the economists who study demographic dividend. As per such economists, early retirement is costly for the economy as a whole. Therefore, a lot of countries including India focus on pro-work policies. Generally, working is better for health and well being.
As of 2023, India’s life expectancy is approximately 70 years, which increases post-retirement dependency. The retirement age is generally flexible, but for most employees, it is around 58-60 years. According to the Longitudinal Ageing Study in India (LASI) 2020, 66% of the elderly (aged 60 and above) are partially or fully dependent on others for their financial needs. Of these, a majority rely on their children or family members. The joint family system still plays a crucial role in supporting seniors.
Social Security and Retirement
Now comes another pivotal question. How many FDs have you opened for post- retirement fun?
It is known that people who can save for retirement are usually in the top half of the income distribution. People in the bottom generally have less disposable income to save. In many cases, a nation’s social security system will do a decent job though private savings are often needed. Additionally, saving is not easy. Spending on the Veblen goods is always fun for the rich. In the States, Social Security’s average benefit is high but 94% of retirees take Social Security retirement benefits well before its benefit peaks, at age 60.
There’s a need for ‘longevity literacy’ and an approach to retirement that goes beyond financial security. As we reflect on the evolving idea of retirement, it becomes clear that it’s not a one-size-fits-all concept. Advances in healthcare and longer life expectancies challenge the traditional notions of stepping away from work at 60. Today, retirement is not just about financial planning but also about maintaining health, purpose, and social connection. While some may retire by choice, others may transition to bridge employment, continuing to contribute to society in different ways.
