– 2005 Retiring retirement
A few years ago on an organised
trip to Palm Springs I skipped out of the scheduled
itinerary for a day to drive over to an address
in Claremont. It was a fairly nondescript house
on a modest estate. I was half an hour early and
the elderly man who came to the door seemed a
little irritated that I had arrived ahead of time.
He was Peter Drucker, the management
writer, who died just over a week ago, aged 95.
Drucker was in his late 80s at that time. I wasn’t
expecting anything remarkable from the interview.
If I’m honest the visit was something of
a pilgrimage. I just wanted to see him.
Drucker was businesslike at
first and pointed out he was “squeezing”
me in to his work routine before settling in to
an easy wide-ranging conversation that lasted
the morning. In the same way, a year or two later
I flew over to Connecticut to meet Joseph Juran,
the quality guru, now aged over 100, who was busy
writing his memoirs. One thing that both of these
men had in common is that they were still working.
Retirement held no meaning for them.
I thought about Drucker when
the FT revealed last week that Lord Adair Turner’s
Pensions Commission would be recommending that
the age at which people employed in the UK can
claim their full state pension should rise from
65 to 67. At the same time it will suggest a new
national pension savings plan in to which people
will be enrolled when they start a job.
Much of the subsequent news
coverage suggested that many people would need
to work longer in order to finance their retirement.
This is almost universally portrayed as a bad
thing in the not unreasonable assumption that
most people look forward to retirement.
But does this assumption need
to change? I do wonder whether we have become
conditioned to the idea of retirement and whether
it is time to radically adjust the way we live
and work in to old age. The first step in this
adjustment is to end the link between pensions
and retirement. Pensions should be seen as nothing
more or less than tax efficient savings plans
that enable the purchase of an annuity - the longevity
bet that you make with an insurer - at some stage
in order to provide a regular chunk of income
in old age.
Retirement, it should be remembered,
is a relatively recent concept, not more than
about 200 years old. In pre-industrial economies
when life expectancy was much shorter so was the
time between the end of working life and death.
In my own life the concept of
what constitutes active retirement has changed.
No longer is it spending more time at the club
or digging over the vegetable patch. Today the
retired middle classes have become serial travellers
and mass consumers of pharmaceuticals. I don’t
begrudge people the opportunity to take life more
easily. But I do think that the long tail from
formal retirement to death could be better managed,
both economically and socially.
I have never understood the
formal retirement ceremony where people go in
to work one day, say their goodbyes, make their
speech, then listen to all the plaudits, only
to find themselves the very next day sitting in
an armchair wondering how to fill the next 20
or 30 years.
A lifecycle is not like a product
cycle. Shakespeare wrote about the seven ages
but the relationship between age, knowledge, learning
and the contribution we can make to the world
is a complex continuum that does not fit in to
neat boxes. And yet our lives continue to be organised
as a series of inter-linked packages when the
packages are no longer elastic enough to mould
themselves around a growing variety of lifestyle
and workstyle choices.
To get rid of retirement we
will probably need to get rid of careers too,
or at least the career ladder. The ladder has
changed anyway. Today it resembles more of a rock-strewn
salmon leap than the multi-runged straight-lined
climb. Some are moving through their executive
careers at such a rate of knots they are out the
other side in young middle age. That’s fine
for those capable of adapting to a less structured
way of life. But some people struggle.
I have reached the age now where
most of my oldest friends are in their early 50s
and late 40s. I can’t think of one who is
thinking about retirement as an end to their working
life. Instead they are thinking of what to do
One friend at 60 is still playing
regularly in the back row of his local rugby team.
This is a league side not a veterans side and
he earns his place on merit. He does not discuss
his age. “It’s irrelevant,”
Another friend who has spent
his entire career at a large blue chip company
is hoping to work on Britain’s preparations
for the 2012 Olympic Games. “That would
be a seven year project that would take me to
59 doing something I really want to do,”
Their attitude is not shaped
by a need to see their time out, but about what
to do next. This is the only way, now, to think
about later life; not as retirement, but as the
next project. The pension, for these people, may
be seen as an important income supplement but
not, with luck, their entire income.
But employers must adapt to
exploit and encourage these changing attitudes.
The biggest employers are facing the biggest problems
here because retirement is a part of their institutional
framework informing expectations on both sides
of the contract. Too many employees have become
trapped by their pension promises, committing
themselves to work they no longer find intrinsically
rewarding, harbouring a rosy vision of retirement
that does not always live up to its promise.
The government is right to concentrate
on savings. But the lending institutions have
widely ignored this need, preferring to encourage
debt, leaving people trapped servicing mortgages
that can only be maintained if their earnings
continue to rise. Debt is the enemy of flexibility
and flexibility is the key to successful work-related
adaptation across a lifetime.
Later working is too often perceived
as a necessary substitute to retirement when it
should be a desirable alternative, a fulfilling
constituent of later living that can not be conceived
in the same way as the hell-for-leather pace that
some choose to adopt in their thirties.
Peter Drucker was his own man who left
a rich legacy of teaching for corporate management that
remains fresh today. But the way he lived and worked is
an equally rich example for the fulfilled life.