Money now more of an issue for those about to retire

In the current uncertain economic climate, researchers say for those on the brink of retirement, money is more of an issue now than it was two years ago and many potential retirees have been forced to re-think their retirement plans.

According to this new research by Australian experts the global financial crisis has meant that while money is clearly a key priority for most people, it is not the only inducement when it comes to deciding when to retire.

The findings of a new study contrast with previous research which suggested that remuneration was not a strong factor influencing workforce participation decisions.

The study was conducted by Nicholas Vrisakis, a senior consultant with the Voice Project, a research and consulting team based in the Department of Psychology at Macquarie University which specialises in using organisational surveys to diagnose leadership, culture and human resource management.

Mr Vrisakis says they found that the most effective inducement to potentially delay retirement was better remuneration, whereas research done in 2007, before the financial crisis, did not suggest that rewards and remuneration were the most important thing, or were even a significant factor affecting workforce participation rates for mature age workers.

Mr Vrisakis says this latest research clearly indicates that money, while not the only thing, is very important to people considering retirement.

The study also found that the availability of part-time work and flexibility in the workplace were important considerations which influenced employees’ decisions on whether to retire and Mr Vrisakis says the move to part-time work, along with flexible working conditions, was one of the most frequently cited reasons in the survey for encouraging a delay.

The research aimed to determine employer strategies that might delay retirement amongst those who were considering retirement in the next five years and used survey data from 158 respondents.

The researchers say understanding the reasons that motivate mature aged employees to make the decision to retire is important not only for employers, but also for current and future governments who must plan how to deal with the challenges of an aging population.

Previously suggestions have included a phased-in approach to retirement which allows for transition from full-time to part-time work as an effective strategy and this research seems to confirm that given the right inducements such as adequate pay, phased in part-time work and flexible working conditions, mature age employees will delay retirement.

Mr Vrisakis says adopting such an approach would not only help to offset employee income losses due to the financial crisis, but also help sustain economic growth and living standards, as well as contribute towards the cost of caring for a large, rapidly ageing population.

The findings were presented at the Australian Psychological Society’s Industrial Organisational conference held this month.