Tag: succession

  • Why the Concept of Retirement is Destructive and Needs to be Replaced

    Why the Concept of Retirement is Destructive and Needs to be Replaced

    This article was originally published on Forbes.com in August 2018.  It is the first of a series of blog posts that will reflect the work I am very excited to be doing on a forthcoming book, Starting Older.

    Ask any successful, engaged 65-year-old, “Are you ready to withdraw from life?”

    The words “retire” and “retirement” derive from the French retirer, meaning to withdraw.  The common definition of retirement today is to leave your job and stop working. Words shape our vision and thinking.  As long as we keep using the word retirement or any derivative such as “the new retirement,” that whiff of withdrawal, of closure, of endings will linger.  And so will visions of what the word evoked a generation ago: retirement as the time to stop working and, hopefully, enjoy yourself—travel, play golf, hop on an RV, pursue hobbies. At least until aging and infirmity catch up with you or your partner.

    I want to get rid of the word altogether. The reason is that retirement has come to be used to refer to much more than an event—the day you leave the corporation or law practice—but to a phase of life.  A life stage that usually begins in a person’s mid-sixties and is associated with the end of productive work.

    Psychologically, knowing which phase of life one is in provides structure, orientation and meaning.  A “young adult” automatically gets the idea that she needs to find work and relationships that sustain her economically, socially and emotionally. A mid-life adult understands that his role is to fulfill significant responsibilities—support and grow a family, a business, a community.  After mid-life, post-middle-age, but before infirmity, what are a person’s role and purpose?  Pursuing leisure until we face illness, death and the end of life doesn’t work for the vast majority of  65-year-olds. But “retirement” does a remarkably poor job, even a destructive job, of describing the phase of life that today’s 65-year-old is entering. I call it “starting older.”

    Each person needs to understand the challenges and opportunities of this new phase of life, “starting older,” in order to live it with vitality, creativity and contentment. Though “retirement” doesn’t capture the experience or needs of individuals in this phase of life, most people in their mid-sixties do either need or want to make a major change in the type of work they are doing. These changes involve the nature, setting and type of productivity they will pursue in the decades ahead.

    This new stage of life didn’t exist a generation ago.  We’re living a little longer now—four years on average—and that might contribute to the change.  But the main factor is that during the expectable 20 years after age 65, we are more likely to be healthy and want and need to continue to be productive.

    Consider two composite case examples:

    A multi-generational family business is led by a rather patriarchal 67-year-old. Members of the next generation, now in their forties, are eager to assume leadership of the company and frustrated by waiting. The patriarch has actually agreed that it’s time for him to step down. But every time a plan is proposed, “something happens” to subvert it.  The family keeps reminding him that it’s his turn to relax, to step back and enjoy the fruits of his labor.  “Travel, play golf, spend time with Mom.” All the things he’s postponed or deferred over a lifetime of work. The more the picture of a stress-free retirement is filled out, the more the patriarch’s resistance to stepping down grows. He creates additional obstacles, offers new excuses, even stirs up conflict within the family. Why does the promise of a stress-free life of leisure backfire?

    A founder left the corporate world and started a company that she has grown over 25 years into a solid, thriving enterprise that reflects her character, her intellect and her creativity. Simply put, it’s her baby. Unlike her two children, now in their early thirties, the business hasn’t moved away and started its own life.  She has been approached by a range of both strategic and private equity buyers and has embarked on serious negotiations with eight potential buyers over the last three years. Each deal has fallen apart at an advanced stage, usually over her dissatisfaction with the final terms and numbers.  However, all of the offers would have provided her with at least twenty million dollars in net profit.  And she admits to being tired of the unending stress of feeling responsible for every aspect of her business. Her team of advisors wants her to sell. The market for her company’s service in five years is unpredictable. Additionally, she’ll then be in her early 70’s and a less attractive bet for buyers who want her knowledge and network to help the business grow for the initial period after the sale. Why does she resist selling?

    What is stopping these highly accomplished, smart, creative, driven individuals from letting go of their positions or their businesses?  Some of the reasons are individualized and personal.  But there are some general truisms that apply as well:

    1. Human beings are meant to be productive.
    2. Leisure and relaxation cannot provide meaning and fulfillment throughout an expectable 20 years of reasonably good health.
    3. A person who has spent four decades engaged in highly stimulating, intense work with great responsibility and some power is not going to want to give up stimulation, responsibility or the power to affect the world.
    4. It’s much easier to let go of something vital to you if you see something equally engaging ahead.

    The patriarch and the business owner in the examples above are likely to be experiencing great anxiety about what their lives will be like after the sale or succession is complete. Yet their advisors rarely talk to them about what they will do next. Someone who has not spent considerable time planning for a productive future may only see a black hole ahead and will unconsciously resist changes that on the surface seem both logical and desirable.

    I’d like to see everyone who is rounding the corner of age 60 begin to think about the next phase of their productive life. By the time they sell, or step aside or “retire,” they should have a pretty clear vision and plan for fulfilling the psychological necessities that all of us gain from work—a sense of having an impact, making a contribution, being connected, being creative.

    Copyright Prudence Gourguechon 2018.