How Does Status Affect Retirement Planning?

Posted on: 23 April 2008 by Gareth Hargreaves

Jeff Toms of Farnham Castle training looks at how pre-retirement job 'status' affects all aspects of retirement planning.

Once seen as a time of old age and financial challenge, retirement is now generally associated with more positive feelings. Most of us can expect to spend a quarter of our lifespan in retirement and with the resources to support a comfortable lifestyle it can be a time of opportunity and fulfilment.

However, lack of proper planning can lead to boredom, frustration and financial worries. The key to creating and experiencing a satisfying retirement is planning - preparing psychologically and physically as well as financially.

Interestingly, it is necessary to consider how pre-retirement employment status - how senior an individual is within an organisation - can affect how much attention needs to be given to each area of the planning process.

A simple example is financial arrangements. A senior executive may need to consider investments, inheritance tax planning and estate planning while an employee who has occupied a less senior position might need to learn about pension credits.

Senior executives may not have as many financial concerns as those lower down the corporate ladder but they will need to arrange a more sophisticated financial retirement package. Most will already have a financial adviser, however, care should be taken to set investment objectives and ensure the financial plan will fit with the new lifestyle. It is therefore, advantageous that the life mapping process precedes the financial plan to ensure funds are managed appropriately and match revised requirements.

However, regardless of status in the employer's organisation pre-retirement, in addition to finances, there are four further main aspects which every employee will need to consider:

1) The transition itself from full-time employment to retirement.

2) Health and well being.

3) The use of time.

4) Relationships.

Moving from a full-time employee into retirement will significantly impact on each of these areas.

Senior executives will have enjoyed a busy working schedule, usually managing a team of people perhaps with the help of a secretary or assistant to book flights, manage a diary, organise meetings, book tickets and so on. The change in status for someone who is 'in demand' to effectively a 'nobody' overnight, can be harder for this type of individual than someone who retains some responsibility for the more practical tasks within their role.

It is therefore, critical to evaluate how status and self esteem will change in retirement as this can become a major cause of frustration. Anticipating this and taking steps counterbalance the shift is beneficial. For example, senior executives could consider a part-time directorship or managing a charitable project in retirement in order to maintain some degree of their previously perceived status within the social framework.

Health and wellbeing is also an important consideration. Understanding and making the most of the 2,000 extra hours of 'spare time' that retirement can bring is critical. It is worth evaluating which fulfilling activities it might be fun to engage in for the next 20 years. For senior executives effort should be taken to keep a business network of contacts going or replace it with an active social network. To some extent this will help smooth the transition from a high status to the newly reduced one.

At the time of retirement 50 per cent of people want to continue to work in some shape or form. Senior staff can often be retained on a consultancy basis with their old firm.

However, typically middle managers who have spent a significant part of their careers trying to hit targets are generally a little more jaded and are often looking for a new challenge where skills can be transferred to a different industry or again take up voluntary work. The key here is to ensure any part-time or unpaid work is at a sufficiently senior level to make it a fulfilling lifestyle choice as this will impact on the overall psychological and then in turn physical health of the individual.

Relationships also take on a different perspective after retirement. Due to the current Government retirement policy women retire at 60 so typically the husband in a relationship finishes work a few years later.

From being the main bread-winner one moment, running a successful team in a demanding role, he may suddenly feel he has become redundant within his own family when he finishes work. By now, his wife will have come to terms with her new life and is likely to have already set up a busy schedule and social network.

The husband now needs to fit in to the revised family structure and discover new activities to complement the new arrangements. Relationships may need to be re-engineered with a partner or the whole family and this can present challenges.

Again anticipation and planning can help. Ensure social networks are built quickly. Joining a golf club, bridge club or walking association for example, can help establish a social framework and form a place of belonging as gradual adjustments are made to adopt the new lifestyle.

To ensure a smooth and happy transition into retirement it is important to consider the many changes that will take place and how they can be managed in a positive way. Although everyone will face the same main issues, attention given to pre-retirement status can effect how successfully these challenges are prepared for. For each individual this will be different and time spent planning in advance will ensure the maximum enjoyment can come from a happy retirement.

Jeff TomsAbout The Author

Jeff Toms is Director of Marketing & Client Services at Farnham Castle, an international briefing and conference centre, specialising in pre-retirement briefings in addition to cross cultural management development programmes and international assignment briefings.

Based in Surrey, the organisation offers pre-retirement education to help employees prepare to make a smooth and positive transition into the next important phase of their life.

Web Links

www.farnhamcastle.com


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