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