Let’s Retire Retirement

At least the 2008 financial meltdown produced one positive outcome: It exposed the fact that retirement as we know it is over. Done. Obsolete.

Until the market crash, many boomers were planning to leave the workforce with well-funded retirement plans. Almost overnight, most of those financial assets lost substantial value, and the exodus from the workforce ground to a halt. Many people simply could not afford to retire anymore, at least not in the manner of their aspirations. They had to find something else to do. Even those not directly affected saw what happened to their friends and colleagues and grew afraid of what might happen next.

These events threatened a cornerstone of the American dream. For the past few generations, retirement has been touted as a major milestone, the reward of "golden years" to enjoy life courtesy of a guaranteed government pension or a benevolent employer's retirement plan. Social Security would provide its recipients with the foundation for retirement, a plan made viable at its inception by shorter life expectancies and a growing workforce paying into the system. The predominance of defined-benefit pension plans - which accumulated significant value in an era when people stayed with one employer their entire careers - enabled people to plan their post-work futures effectively.

Now we face a different reality. With lifespans expanding dramatically, retirement can last for 20 to 30 years or more. Few people can stretch their retirement savings over that time. The increasingly untenable math behind Social Security, with fewer workers supporting more Social Security recipients for longer, makes the prospects for traditional retirement even less certain.

Moreover, retirement can have a negative effect on employers. As longer-tenured, more experienced associates retire, organizations steadily lose their institutional memory, their brain trust, and their pipeline for the future. In a world where organizations need as many perspectives as possible to address today's complex challenges, they can ill afford to let go of capable people who possess years of experience.

In short, traditional retirement is no longer working for individuals, and it is no longer working for organizations. But if it has become pass, what will take its place?

A hint of the answer may come from the military. Typically, career military personnel serve 20 years in active duty and retire at a relatively early age. However, many of them do not retire from the workforce; they retire from an employer and start second or even third careers. Rather than a long, arduous journey to a permanent state of rest and relaxation, their lives become a flow of new opportunities in various forms.

Similarly, in civilian life, today's younger workers expect to engage in multiple careers. Many people have taken extended leaves of absence from the workforce to raise children, returning to paying work years later. It is easy to foresee these trends blossoming into a vastly more flexible career arc, in which people will regularly intersperse jobs and careers with periods of travel, volunteerism, child rearing, caring for aging parents, and other pursuits in a serial "coming and going."

As this takes place, we can expect to see another misconception fade into obsolescence - the idea of a peak productive period in middle age. Currently, as a legacy of the times when a shorter lifespan prevailed, we view people's forties and fifties as their masterpiece age, followed by an irreversible decline in capability. With our longer lifespans - and the health practices that make them productive - we can expect high performance to persist well into many people's seventies, eighties, and beyond.

These transformations will require extraordinary flexibility on several levels. Organizations will need to rethink their policies on leaves of absence and the return of people who previously terminated their employment. They will also need readiness to meet a much broader range of human needs. For instance, many companies may want to consider the academic notion of sabbatical as an incentive for their employees.

Moreover, since most people no longer spend their entire careers with one company, organizations must move more quickly to tap the skills, wisdom, and potential of all workers.

Similarly, people will have to shift their mindsets from the "gold watch" scenario to a model that fits the realities in which we live. Not that this should be a burden. In this new model, people will have more options for more fulfilling and varied pursuits. They can chart their own course as it makes sense for them individually, rather than for an organizational system or obsolete cultural expectation. Because of this greater self-determination, they would likely be more invested in their given pursuit at any given moment.

The traditional concept of retirement is holding us back. Our working days need not end at 65, or 75, or 95, as we continue to learn, grow, and position ourselves for the next opportunity.