Tobold's Blog
Friday, April 26, 2024
We need to talk about age

While the legal retirement age in Belgium is 65, the average age at which Belgians actually retire is 61.8, more than 3 years less. While this gap is a record for the OECD countries, average actual retirement age in all of them is lower than legal retirement age. Germany increased the legal retirement age from 65 to 67, but average actual retirement age is still below 65. While of course every retirement is slightly different in the details and the motivation for the decision to retire, the perception that the driving force is always the old person wanting to retire is wrong. When approaching retirement, most people need to take a long, hard look at the financial aspects of doing so. Many companies offer early retirement packages, without which the average actual age of retirement would be significantly higher.

Live is different at 60 than it was at 30. You do have less energy, and get tired faster. You do have "senior moments", where you go somewhere and suddenly don't remember why you went in the first place. You aren't as much up to date with the latest news, or memes, or music, and tend to make references that younger people you talk to don't understand (Superman changing in a phone booth? What's a phone booth?). If you consider a typical job, where the company wants the employee to be energetic, quick on their feet, and able to work long hours, it is understandable that the company would prefer a younger person. Especially if that younger person earns less than the older person. And that leads to a perception of people in their 60's at some point becoming "too old to work".

In November of this year, the United States of America will have a presidential election in which the average age of the two candidates is 80. Partisan commenters argue that their candidate is "sharp", while pointing out the age-induced gaffes of the other candidate. But the sad reality is that both candidates are too old for the job. Both have shown signs of dementia in public, and being able to still pass a basic cognitive test isn't exactly a job qualification for becoming the leader of the free world. It was probably a good thing that JFK was 45 during the Cuban Missile Crisis, and not 80, because we can be sure that the president didn't get much sleep during those two weeks, and was under a lot of stress.

Electing somebody around 80 to the office of US president also has a weird constitutional aspect: In American politics the office of the vice-president is considered to be some sort of a joke, and the vice-presidential candidates are selected as an after-thought in the presidential campaigns. But the probability of somebody around 80 dying of natural causes over the next 4 years is rather high. Actuarial tables suggest the chance could be up to 25%, although those tables are for the general population, and one might argue that a president gets better health care. Still, the probability that the 48th president of the USA will be one of the vice-presidential candidates of the 2024 election is certainly unusually high.

How do we bridge the gap between considering a 60-year old "too old" to do a regular job, and an 80-year old still young enough to perform one of the most important jobs in the world? Shouldn't there be a mandatory retirement age for politicians? It isn't just presidents, Nancy Pelosi and Mitch McConnell are both only retiring at over 80, in the case of McConnell after showing serious age-related decline symptoms in public. How do we bridge the gap between companies complaining about a lack of skilled labor, while simultaneously giving early retirement packages to their most skilled people?

I think that retention of skilled labor could be achieved by replacing early retirement packages with age-adjusted job descriptions. Companies should have jobs for older people, in which their skill and experience is valued more, and the hours and conditions are adjusted to their diminished physical abilities. If you send two electricians to solve a complicated electrical problem, there would be no harm in one of them being old and experienced, while the other is young and energetic. Macro-economical it makes more sense to create value from experience than to draw an arbitrary "too old" line, just because the 60-year old isn't fully suited to do the same job as the 30-year old. With most OECD countries having serious financing problems of their pension schemes in the coming decades, that might be quite necessary. And maybe even old politicians could be given advisory roles, rather than being in the heat of the action.

I'm retiring in 22 months. I'll be 55. I'll have been working in software development or management for 33 years. I don't feel too old to continue working, I don't feel a day over 40 LOL. I'd rather do something other than work while I still can. Anyone can retire early. Create a budget, build in savings early if you can, get out of debt early, save like crazy late. In my 20s and 30s I barely saved anything, I ramped up in my 40s, and in my 50s over 75% of my income goes into savings and investments. I thought about semi-retiring, taking less pay and cutting my hours, but I just didn't see the reason to keep earning as I am comfortable now.
Agreed. You can achieve that famous “work life balance” on a timescale spanning decades: Working long hours for the middle part of your life, with not much time and money spent on yourself, but then retiring early and comfortably on your savings.
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I've got a goal of retirement at 65 in 12 years, and I plan to do a lot with that time when I get there. Realistically I probably won't be able to fully retire, but I am actively trying to cultivate my younger employees to have the skill and competence to take over in my absence (I am a co-owner of the business). Meanwhile, my co-owner, also the original founder, is approaching 95 and he still tries to stay involved even at his age, which I admit is more of a liability these days than an asset, sometimes. I can understand his reasoning, though; this business has been his whole life, effectively. Without it, he doesn't have a heck of a lot else to do. I consider myself fortunate that I have tried to keep my work-life balance a bit more even.
On a recent holiday to the US I was struck by how many older people work in service jobs particularly in retail. I understand that this stems from lack of proper social safety nets which forces people to keep working long beyond when they would have retired in any other country. This is terrible obviously but there is also a plus side to it. These people had jobs and purpose and were still making a contribution to society whereas in Europe they might just be forgotten. Some of them really seemed to enjoy their work (most of the tour guides we met were 70+ and loved it). I am now 60 and I intend to keep working till I am 65 but I still am not sure what I am going to do after I retire. I will definitely miss being someone with a role and a job title.
I've been saying this for so long. Retirement shouldn't be a shock to the system. You shouldn't go from 40 hours a week to nothing. As you approach retirement your hours should diminish so that the year before you retire you are essentially working part time.

That is my plan, I turn 50 this year and would like to seek out a reduction in hours for next year. I'd love to work only 4 days a week but will have to see what my employer is open to. My last manager was on board with my plan and very supportive of implementing it. Unfortunately he left and I have a new manager so I will have to see.

My current forecast for retirement is 57 but depends on the market, inflation, and some other factors. I've had to save for my own retirement so it will be a bit trickier than having a pension.
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