Tennis superstar Roger Federer, 41, recently announced his retirement from the game, while Bollywood superstar Amitabh Bachchan is still going strong in his work at 80.
Most people look forward to getting retired and having a chilled-out life by the time they are 60, and some even much earlier.
However, selecting the time of retirement can be tricky. If you leave young, you have a particular set of risks and challenges that you might face and if you retire late, you might miss other opportunities/passions you always wanted to pursue.
So, how can we ascertain the right time to retire in the corporate world?
There aren’t many people who hang in their boots at 40, but it is often seen that such people become part timers, gig workers, and advisors/coaches/board members.
“This way they get to do the work they love doing the most (e.g. client work in the case of a consulting firm) and stay away from the rat race, the people management 'hassles' and things like appraisals and promotions among other things,” says Nishith Mohanty, partner at global consultancy firm Korn Ferry.
As per Mohanty, there are three archetypes of people who retire early.
Coaches: Loving it but want to focus on their core: Here people love what they do, want to do more of it, and want to get away from all the 'corporate rat race'. They become advisors, freelancers, consultants and board members among others. People usually do this the moment they touch 45-50 years of age, after they have become financially independent.
“I presume that means that they have created portfolio incomes which match their expected standards of living without having to work their jobs. Many workers like this are able to add a tremendous amount of value to their companies, teams, peers, etc. while maintaining a healthy work life balance. The challenge some of them face is that they sometimes lose touch with the reality of the markets, don’t strive enough to learn from feedback, and therefore are not able to keep pace with the changing needs of their customers,” says Mohanty.
Renegades: Disillusioned and wanting a change: Here people leave their jobs at any age, but typically earlier than above. This happens usually with people who are able to meet their basic financial needs early, and then realise that their work is the biggest 'jail' they have put themselves in.
“Many of them get a calling of their 'purpose' and want to explore what that means for them. Nothing is worse than doing work which takes your life out of you, and if you can afford it, you must find something else to do. However, a romantic notion of purpose without a check on reality can be a death knell to careers - people become unhappy with their new realities and find it harder to go back as well,” says Mohanty.
Entrepreneurs: Start something of my own: This is the third kind - which is a positive mix of the above two. You see people who rebel against the existing business models that traps most people, and want to focus on building value in a certain way. With a keen sense of what will sell, they are able to create a new business model around themselves.
“Many leaders do this at pretty much any age. And obviously, as with entrepreneurship, you have a high chance of failure - BUT those leaders who have truly tried to create a viable business model, in touch with the market, focusing on serving real customer pain points - gain a LOT from this experience. Even if their ventures fail, they go back to their old careers with new learning, energy, and wisdom, which helps them in the long run,” says Mohanty.
Talent advisor and Hyderabad-based Options Executive Search founder Achyut Menon, however, does not plan to hang up his boots early.
“I don't think I will retire.. The concept of study 20-plus years, work 30-plus years model and then retiring is obsolete with the increase in technology, automation, robots , AI, ML etc,” he says.
As per Menon, the concept of retirement is dated in the industrial economy where it was primarily labour versus machine dynamics.
“Also, the mortality rates of humans were different and given the physical work and stress, the retirement age of 58-60 years was arrived at. In the network economy, thanks to technology and globalisation, and advanced medical improvements, most of us can aspire to live up to 80 plus unless one suffers from an ailment. Even the work we do is more intellectual and so the impact of someone experienced - working a few hours a day- is significantly more than a young person spending eight hours,” he contends.
“We already see remote work, gigs, fractional work and interim executives so the concept of tenure is less important than the impact,” he adds.
Menon says the currency people will have in good stead is skills and one has to constantly learn, unlearn, and relearn.
Common retirement mistakes to avoid
People who retire often feel a huge sense of a loss of purpose, identity, impact, importance, power, and the like. Everything from the daily routine to self-concept is determined by one's job to a significant extent.
Mohanty throws light on the common pitfalls people overlook when they approach retirement decisions.
- Not planning for how you will stay relevant in the post-retirement world. Who will call you? Who will you call? What value will you add to whom?
- Not staying in touch with reality: Many people find it hard to realise how the world is changing rapidly, and that they need to know what’s happening to stay relevant.
- Not being good at something: Many people plan what they will "do" once they retire - there's always things to do, but many of the things people feel they would like to do doesn't give them a sense of fulfillment. It is probably because they aren't good at it or don’t get recognised for it - these are things people always enjoyed doing because they didn't have enough time to do them... but now that they have all the time in the world, suddenly it’s not fun anymore.
- Not planning a return to work strategy: Many people who exit early don’t have a viable plan to return to work should they feel the need to do so.
Preparing for a life after retirement
Find out what gives you a sense of fulfilment: These can range from the sublime (helping others succeed, or creating positive change, etc.) to the ridiculous (flying for meetings and enjoying bumping into friends at the airport lounge).
Mohanty says these things are important and your life will be meaningless without these. “Find a way to ensure that you are engaged in things that are meaningful to you when you retire. If you have a clear sense of this already, go for it.”
Start your retirement planning 10 years before you retire: Have a view of what you are good at, and what you can do once you retire - and then start planning for it 10 years prior.
“This may mean building your own client base, your networks, your plans, and most importantly, your skills, early on. It won’t be easy for you to start your new gig immediately, so start early and moonlight your way into your retirement vocation,” adds Mohanty.
Be independently productive: Are you able to sell, deliver or create value without your company business card? Will you be relevant without your organisation?
“If yes, then you will likely find that retirement is liberating and allows you to focus on what really matters to you. However, if you haven't developed that muscle in your life earlier , you won't be able to do so after you retire. So plan accordingly,” Mohanty notes.
“Stay relevant, (skilling or upgrading), stay fit (physically and mentally) and be financially prudent to save up and meet the increasing demands of health - as most of us in the non-western hemisphere do not have access to social security, pension, or enough savings to even beat the inflation,” says Menon.
“In short, forget about Retiring. Think ReFIRE!! I am convinced the future of work is not so much about jobs but our ability to be earning financially through multiple sources of income. Information and experience are a passe - INSIGHTS and WISDOM are the critical add ons,” he adds.