Written By Mahima Sharma
The concept of retirement is one that has undergone a profound transformation in recent years. Traditionally viewed as a period of rest and relaxation following decades of work, retirement is now being reconsidered by a growing number of older adults who choose to remain in the workforce far past the conventional retirement age. This shift is driven by an interplay of economic, social, and health-related factors. India’s life expectancy has increased from 42.9 years in 1960 to over 70 years in 2020.1 By 2050, there will be more people in the above 65 age category than under 15 globally,2 and twenty percent of Indians will be senior citizens.3 Along with this, an increasing life expectancy means that the years following retirement have grown in number. By 2030, India is estimated to have 350 million individuals past the retirement age.4 As the Indian population ages and life expectancy continues to increase, many find that continuing to work to an older age offers not only financial stability but also a sense of purpose, engagement, and mental stimulation.
The increasing life expectancy raises questions regarding longevity risk:5 the risk of exhaustion of financial resources for sustenance as a result of living longer. This acts as a key motivator in driving older adults to continue pursuing a stream of reliable income into their later years as well. In the 2023 HSBC Quality of life report, nearly 85 percent of surveyed individuals from Asia cited their main reason for continuing to work was related to financial concerns.6 62 percent of surveyed mass affluent Indian individuals cited high healthcare costs as a key financial concern in retirement, while 57 percent raised the concern of inflation impacting their savings.7
Maintaining a stream of income into later years is becoming more desirable as the average number of years spent in the workforce has reduced compared to past generations. This is as a result of more time spent on higher education and therefore a higher average age of entry into the workforce leading to fewer years of working8 before enforced retirement. Another concern in India in particular is the falling trend of remaining in joint or extended families,9 which gives older adults less of a familial financial support system to fall back upon.
However, financial aspects apart, the growing life expectancy raises questions in professionals regarding how to keep themselves busy and find a sense of purpose post- retirement to lead a meaningful life when the majority of their former years were absorbed in building a career and skills to make them most productive and valuable in the workforce.
A major contributor of work to our lives is keeping us mentally stimulated; engaging in work tasks requires skills of problem-solving, critical thinking, and creativity, all of which stimulate a variety of cognitive functions, enhancing and stimulating mental agility. Additionally, work environments encourage continuous upskilling, development, and constant learning, which further promote cognitive adaptability and growth. Thus, a departure from such an environment can often pose a threat to cognitive wellbeing in elders. One major threat in India is dementia, considered to be one of the largest causes of disability in the aging population.10 Alzheimer’s disease in particular accounts for between 60 and 80 percent of the cases.11 The estimated prevalence in the ages above 60 is around 7.4 percent,12 with risk being correlated to lifestyle factors13 such as cognitive activity. Studies have shown that increased time spent in retirement- in relative isolation can be associated with a greater decline in an individual’s verbal memory.14 In a population that is living longer, concerns of avoiding a quick cognitive decline are a large driving factor for the continuation of work.
In addition to facilitating cognitive activity and agility, placement of an individual in a community or organization instils a sense of identity through defined roles and contributions, as well as fulfilling responsibilities and achieving goals to boost mental health. The provision of a sense of accomplishment is shown to contribute to life satisfaction and general psychological wellbeing. Studies have shown that being involuntarily removed from work due to enforced retirement in late adulthood can lead to a worsened rate and level of cognitive decline, reduced ability to adapt to aging, and increased dissatisfaction with the individual’s stage of life.15 This dissatisfaction can often even be a key factor in causing Late-life depression, which often acts as a precursor to dementia and other such long-term cognitive impairments.16 A number of the skills developed through work experiences tend to mirror those that are often developed in therapy,17 thus making work a meaningful way to avoid forerunners to depression and anxiety. Studies have also shown that having one’s own stream of income allows for a greater sense of independence and self- confidence, which is associated with better mental health and self- worth.18
Highly linked to the mental wellbeing of retiring individuals is their physical health. Work often acts as an incentive to remain physically active, and often the isolation and boredom that follows retirement are considered some of the biggest threats to not only mental but physical health as well.19 The 2023 HSBC Quality of Life report highlighted a strong link between mental and physical wellness, with individuals with high levels of physical fitness being around 9.3 times more likely to score above average on their mental wellness.20
These cause the question to arise about retirement and its own evolution- traditional retirement meant a time to step away from the workplace entirely. However, largely attributed to the adoption of changed work models during the Covid-19 pandemic, the concept of a ‘new retirement’ consisting of hybrid or part-time work is gaining popularity, with over 68% of those looking to do so for pleasure and not out of purely financial need. Referred to as phased retirement, the concept of gradually stepping away from the workforce while maintaining a portion of the mental stimulation that work provides is growing immensely in popularity. Globally, 66% of current workers show a preference for this greater flexibility,21 which also allows them to put their skill and experience to use after having spent decades growing and refining it.
The decision to continue working past the traditional retirement age is thus influenced by a range of motivations- related to finances, cognitive activity, and health. Many worry that retirement savings may be insufficient to sustain a particular standard of living post-retirement, considering high healthcare costs and inflation especially. Additionally, engaging in work can act as a cognitive stimulant, reducing the risk of age-related cognitive decline and fostering a sense of ongoing contribution and relevance. Moreover, work provides a sense of purpose and routine that contributes positively to mental and physical well-being, helping to maintain social connections and daily activity levels. Understanding these motivations allows for the creation of new, more flexible work environments and opportunities for older adults, ensuring that they can continue thriving personally and professionally.
Even though the concept of retirement is changing, the recruitment market is slow on the uptake. There are very few recruitment portals in India that provide job opportunities to retired professionals. WisdomCircle is one of the best job portals in India which focuses exclusively on this demographic and connects them with meaningful job opportunities post-retirement.
References:
- 1 “Prevalence of Dementia in India: National and State Estimates from a Nationwide Study.” Alzheimer’s & Dementia, vol. 19, no. 7, 13 Jan. 2023, https://doi.org/10.1002/alz.12928.
- 2 Gelfand, Alexander. ““We Have 30 Extra Years”: A New Way of Thinking about Aging.” Stanford Graduate School of Business, 17 Apr. 2020, www.gsb.stanford.edu/insights/we-have-30-extra-years-new-way-thinking-about- aging.
- 3 Sharma, Anjana Vaswani,Mamta. “India’s Senior Workforce: From Corporate Titans to Entrepreneurial Trailblazers.” The New Indian Express, 5 June 2024, www.newindianexpress.com/amp/story/magazine/2024/Jun/15/indias-senior-workforce-from-corporate-titans-to- entrepreneurial-trailblazers.
- 4 ESCAP. “India | Demographic Changes.” Www.population-Trends-Asiapacific.org, 2022, www.population-trends- asiapacific.org/data/IND.
- 5 Hou, Wenliang. HOW WELL DO RETIREES ASSESS the RISKS THEY FACE in RETIREMENT? July 2022.
- 6Kaushal, Teena Jain. “A Majority of People Plan to Work Post-Retirement, as They Feel Gap between Actual Savings and Amount Needed Has Widened: HSBC Report.” Business Today, 20 Sept. 2023, www.businesstoday.in/personal-finance/top-story/story/a-majority-of-people-plan-to-work-post-retirement-as-they- feel-gap-between-actual-savings-and-amount-needed-has-widened-hsbc-report-399054-2023-09-20.
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- 8 Nathan, Narendra. “Retirement Planning: Higher Life Expectancy, Shorter Work Spans Mean a Longer Retirement Period: Get Financially Ready.” The Economic Times, May 2017, economictimes.indiatimes.com/wealth/plan/higher-life-expectancy-shorter-work-spans-mean-a-longer-retirement- period-get-financially-ready/articleshow/58655210.cms?from=mdr.
- 9 Statista. “India: Household Distribution by Structure.” Statista, 22 May 2024, www.statista.com/statistics/1377314/india-household-distribution-by-structure/.
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- 12 Lee, Jinkook, et al. “Prevalence of Dementia in India: National and State Estimates from a Nationwide Study.”
- Alzheimer’s & Dementia, vol. 19, no. 7, 13 Jan. 2023, https://doi.org/10.1002/alz.12928.
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- 14 Celidoni, Martina, Chiara Dal Bianco, and Guglielmo Weber. “Retirement and cognitive decline. A longitudinal analysis using SHARE data.” Journal of health economics 56 (2017): 113-125.
- 15 Sarabia-Cobo, Carmen María, et al. “Retirement or No Retirement? The Decision’s Effects on Cognitive Functioning, Well-Being, and Quality of Life.” Behavioral Sciences, vol. 10, no. 10, 1 Oct. 2020, p. 151, https://doi.org/10.3390/bs10100151.
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