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Lifestyle Retirement - Do you have a plan?

Retirement may be an ending, a closing, but it is also a new beginning – Catherine Pulsifer

Retirement is a hot topic because of the challenge to our economy and businesses due to the looming retirement of large numbers of baby boomers. This is happening alongside the increase in average life expectancy of current and future generations. Combined these issues are putting pressure on NZ’s ability to afford superannuation and so, the much publicised suggested solution, is to raise the superannuation age of eligibility to 67.

An important note for all employers is that age is one of the prohibited grounds of discrimination in employment under both the Human Rights Act 1993 and the Employment Relations Act. The Human Rights Act makes it unlawful to “retire the employee, or to require or cause the employee to retire or resign” on the grounds of age. An employer and employee may mutually agree to end their employment relationship at a particular date, which may coincide with an anniversary or the date on which an employee becomes entitled to benefits from a superannuation scheme. There must be no suggestion, however, that an employer has required the individual to retire at a particular age.

Retirement does have an impact on engagement at work

Concerns about the impact of retirement on lifestyle are very real for those nearing retirement. As a business owner whether you have staff or it is just you, research shows concerns about retirement do impact on engagement at work for about one third of retirees. For many businesses the level of expertise of staff over 55 is significant and so a drop in engagement of these staff has a direct impact on the bottom line. Whether it is just you or your staff nearing retirement, it makes good business sense then to support those with concerns to manage this significant lifestyle change.

In his article on “Psychological Effects of the Transition to Retirement”, John W. Osborne states “Taking several years prior to retirement to build what will become a retirement lifestyle can make the transition less problematic.” There is a significant amount of information on google regarding financial planning for retirement but very little on lifestyle planning. Having the financial means is vital to support lifestyle choices however the key message from those who have successfully transitioned to retirement is that finance is one important consideration – the other is lifestyle planning.

Planning is the key

Often the fear of transition into the unknown stops people thinking about what they want their retirement to be like and what they need to do now to support a smooth transition to a happy retirement. Our workshops and one on one coaching in lifestyle retirement planning walk participants through a step by step process that asks some key questions to prompt thinking and support decision making on important retirement lifestyle factors. Participants can then prepare a lifestyle retirement plan to work on before choosing to retire.

Research shows that the three critical factors that lead to happiness and a feeling of fulfillment in life at any age are relationships, competence and achievement.  All three factors can be in jeopardy when we transition away from work. Creating a lifestyle plan will ensure contingencies are put in place to maintain these three factors.

The benefit to you as an employer from supporting staff to participate in lifestyle retirement planning is higher engagement of staff at work because their concerns have been reduced and an increased profile as a good employer who does support staff. Feedback from participants in previous sessions is that they really appreciate the opportunity provided by their employer to attend a lifestyle retirement planning session.

Questions to consider

Some questions to consider in relation to retirement, staff and you as retiree:

  • Have you considered what lifestyle you want and do you have a retirement plan?
  • How many of your employees have concerns about retirement?
  • What support do you currently provide employees in relation to their retirement?
  • Have you considered your succession plans for the transition of expertise from employees who may choose to retire in the next few years?
  • What plans do you have to ensure your business is able to make the most of the growing pool of expertise from those individuals who choose to work in their late sixties and seventies?

If you would like some guidance in regards to preparing for your retirement, please contact our team of HR Consultants:  Andrea Stevenson, Baker Tilly Staples Rodway Hawkes Bay, Chris Wright, Baker Tilly Staples Rodway Auckland, Julie Rowlands, Baker Tilly Staples Rodway Taranaki,  or Norma Blackett, Baker Tilly Staples Rodway Tauranga.

DISCLAIMER No liability is assumed by Baker Tilly Staples Rodway for any losses suffered by any person relying directly or indirectly upon any article within this website. It is recommended that you consult your advisor before acting on this information.

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