The case for a more flexible transition to retirement

Does retirement mean the end of your career or simply signal start of a transition? And what can you do to prepare for it? Maarten Edixhoven, CEO of Aegon, makes the case for having a flexible approach.
The case for a more flexible transition to retirement

This article is part of the Forum Network series on New Societal Contract 

Receiving a gold watch from your boss after a long career with the same company has become a thing of the past. Indeed, the current job market is unrecognisable to those who retired a generation ago. Increasingly people are working for themselves and today it is not unusual for someone to work for different employers, retrain and even change career during the course of their working life.

The traditional view of retirement, where people stop working altogether at a defined point in time, is also fading rapidly as people’s relationship with work and leisure evolves. Increases in longevity and the potential for healthy aging mean that employees envision working longer, albeit at a more relaxed pace, and retiring at an older age. 

Flexible retirement should be the new norm

The Aegon Center for Longevity and Retirement has been researching people’s attitudes and readiness for retirement for the past six years. In doing so, the Center has collected responses from some 86,000 workers and retirees in 15 countries around the world. The results of the most recent survey Successful Retirement - Financial Security and Healthy Aging find that only one in three workers globally see retirement as a moment when they immediately stop working and fully retire. 


Most workers (57%) envision continuing some form of work in retirement: globally, 31% plan to work part-time for a while before they eventually stop working altogether, 16% will change the way they work (e.g. part-time, different capacity) but continue working throughout their retirement, and 10% say that reaching retirement age will not make a difference to the way they work.

When asked about their reasons for working to some extent in retirement, workers cite a variety of motives ranging from healthy aging to financial concerns. Globally, more than half (56 %) want to keep active/keep their brain alert and 38 % enjoy their work. 73% cite a combination of income and savings-related concerns.

Work is a part of many people’s identity, providing purpose, economic independence and social contact. Enabling workers to choose when and how they retire benefits both employers and the individuals concerned.

Employers can do much more

Workers envision a personalised and flexible approach to retirement; however, their ability to carry out that vision depends in large part on the support of employers.

Few workers say that their employers have business practices in place to support their aspiration to work longer and transition to retirement. Only 24% of workers say their employer offers the option to transition from full-time to part-time work. Even fewer workers (20%) enjoy access to more suitable work (e.g. less stressful or physically demanding) or flexible retirement plans that allow working beyond the usual retirement age (19%).

The benefits of a loyal workforce

For individuals, the benefits of working longer are clear when it comes to staying economically active and socially connected. Employers also reap rewards: workers aged 55 and above represent a loyal group with half (50%) saying that they feel a strong sense of belonging to their employer and almost three quarters (74%) saying they plan to work with their current employer until they retire if possible. Additionally, employers benefit from the intergenerational transfer of knowledge and skills between workers of different ages and experiences.

Flexibility may not be an option for everyone

The sobering reality for all workers is that 39% of retirees say that they retired sooner than planned. Their most frequently cited reasons are ill-health (29%) or unemployment/job loss (25%).

Retiring early

Retiring sooner than planned can have consequences for people’s long-term financial security; especially if that means losing out on years of retirement savings or having additional medical expenses as a result of ill-health.

While life has many uncertainties, we can take steps individually and collectively both to reduce the risk of having to retire sooner than planned due to ill-health or job loss and manage the consequences when it does. Exercising, eating a healthy diet and avoiding harmful behaviours can increase our chances of healthy aging. Keeping skills up-to-date and having appropriate insurance can help reduce the risk of job loss and recover from the consequences. 

The way forward

The need to help workers transition to retirement is clear, as are the benefits for employers and society at large. Policy makers, unions, employers and individuals should start working to make flexible retirement an immediate reality and in so doing facilitate workers in their financial planning, developing healthy habits and maintaining a good work-life balance. Rather than giving an employee a gold watch to thank them for their contribution in times past, employers and policy makers should empower workers to take advantage of times yet to come as they think about what retirement means for them.

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