Delay retirement: Study advises

BY NEIL VILJOEN, REGIONAL HEAD AT THE WEALTH CORPORATION - OCTOBER 28, 2015

A study by the American Psychological Association (APA) reveals that those who postpone retirement enjoy better physical and mental health than those who don’t.

Besides the obvious financial benefits of earning more and delaying drawing down or perhaps drawing down less, those who work past the average retirement age suffer 17% fewer serious diseases and enjoy better physical health than their counterparts.

The study revealed that the health benefits of working longer include: lower blood pressure and less likelihood of contracting diseases such as diabetes, cancer, strokes and heart and lung disease. Mental health conditions such as dementia are also shown to be less prevalent amongst this set.

It is noteworthy that only those respondents who continued to work in a related field saw mental health benefits. The APA study also noted that retirees who most need to work are more likely to find continued employment in a new field. Consider, too, that those who have physically challenging jobs may well be unable to work into their retirement years as such labour can both take a toll on the body and be too strenuous for an older person.

The study referred to the transition between full-time work and full retirement as “bridge employment.”  This comes in the form of part-time work, self-employment or short-term contract work.

These findings are supported by a study from Bankers Life which reveals the greatest regret of over two-thirds of American middleclass baby boomers is that they didn't work longer. For 60% of respondents, the principal reason for their regret was not financial but because they want to stay mentally and physically fit and maintain a sense of purpose and they see employment as being instrumental in this regard.

Rethink retirement

“These studies provide firm proof of what we have always said; that those who stay stimulated in retirement enjoy a better quality of life. These results support the view that we need to rethink the way we approach retirement”, says Neil Viljoen, Regional Head of The Wealth Corporation.

The Wealth Corporation has a three-pronged approach to retirement whereby the advisors explore not just the financial aspects of retirement, but the practical and emotional ones as well. They refer to this approach as Integrated Insight.

“We coach our clients as they transition into retirement and find that most people are wholly unprepared for the emotional challenges they face. The prospect of too much time on their hands and no ‘new’ money coming in is daunting and leaves many feeling overwhelmed.

“We find, too, that in the latter years of employment people often make short-sighted decisions that have a significant impact on their lifestyle in retirement. For instance, some buy a bigger home farther away from family and then rue the added expense and impracticality of travel at a time when they want to cut back financially and spend more time with loved ones”, says Viljoen.

Advisors need to take a more active role in challenging clients to consider both their lifestyle choices pre-retirement and their options for bridge employment so as to provide more comprehensive retirement advice.

“The benefits of working past retirement age are clear from a financial, emotional and health perspective. As financial advisors, it behoves us to encourage our clients to think about their retirement holistically and consider bridge employment. For some this may come in the form of consulting to businesses within their existing network. For others who want to make a social contribution this may come in the form of working with a non-profit. Intimate knowledge of the client’s wants and needs is key,” Viljoen says.

Have you considered bridge employment in your retirement plan? You too may need to rethink your retirement.