Stigma in retirement

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INTRODUCTION:

Company retirement is no longer stigma in today's world. More and more people are continuing to work after retirement age for a variety of reasons. No doubt for a large number the main reason for working after retirement age will be financial, but for others achieving a balance between work and home life is an important issue. Some people do actually view the prospect of stopping work altogether as a scary option and many will ease their way into retirement by continuing to work but with more flexible or part-time hours. There are around 6 millions people between the age of 50 and retirement age still actively employed.

Theory:

Mortgages No Longer a Stigma in Retirement

Reflecting a massive change from the prior generation when a major goal of retirement was to “burn the mortgage,” more than 55 percent of boomers surveyed who currently hold mortgages do not plan to pay their mortgages off until their 70s, if ever. This trend was most pronounced in the Western US, where 31 percent of those with mortgages do not ever intend to pay them off, compared with 25 percent in the South, 18 percent in the Midwest and 11 percent in the Northeast. Of the 500 boomers surveyed approximately two-thirds currently have mortgages on their residences. The remaining third either rent or do not have a mortgage.

“Contrary to conventional wisdom, mortgages can actually be a wealth-building tool for boomers throughout their retirement years”.In addition to their tax benefits, mortgages help free up funds that otherwise would be tied up in property ownership for investment in equities.

1)The normal retiring age for permanent employees is sixty (60) years. The retirement age of sixty (60) for ATS staff must be enforced, as agreed by Finance and General Purposes Committee, Mona, at its meeting held on September 27,1999.

2)An employee may be retired before the age of sixty (60) if he/she is found to be suffering from a chronic medical condition, or is permanently disabled and, as a result, is unable to fully or properly discharge the tasks, duties and responsibilities of his/her job, or comply with the terms and conditions of his/her employment.

The effective date of retirement is the staff member's 60th birthday. Therefore, the last working day would be the day on which he/she attains the age of 60.

Pension

Members of staff who were employed and contributing to the pension scheme prior to August 1, 2002, can request a lump sum payment of their employee and employer's portion or purchase a pension with the proceeds from his or her Superannuation.

Members who joined the scheme on or after August 1, 2002 may only purchase a pension with the proceeds from their superannuation.

Health

The University covers the full cost of health insurance for retirees who are in receipt of a pension from the University.

Temporary employment beyond retiring age may be granted up to the age of sixty-five (65). In very exceptional cases, the University may consider temporary employment beyond the age of sixty-five (65), but not beyond seventy (70) years. Retirees may only be retained where the post has been advertised and a suitable replacement is not found.

If a suitable replacement is not found and the retired staff member is to be re-engaged, there must be a break in service for a minimum of two (2) weeks. The retiree will be issued a special Contract for services by the Human Resource Management Division with terms negotiated between the retired staff member and the University. These terms will include an all-inclusive sum, which will not necessarily be the same as those for a regular staff member. Under this contract, the retiree will be engaged to provide specific services to the University under specific terms of reference. This contract should be of a fixed period not exceeding one (1) year and will include an end of contract gratuity of 10% of the contract sum.

  1. The granting of such request for re-employment is at the discretion of the University.
  2. The Finance and General Purposes Committee, Mona, established the following criteria to be applied strictly beyond sixty-five (65) years, but leniently between 60-65 years.
    1. The employee must have rendered outstanding service in a particular field and should have demonstrated a proper work attitude. This should be clearly stated in a special evaluation of the employee by the Head of Department and should be supported by a summarised research into the employee's record by the Human Resource Management Division.
    2. The employee must be in a state of physical/mental fitness, evidence of which should be corroborated by the employee's medical history as recorded in his/her file.
    3. The Head of Department must be able to indicate that the work of the Department would be adversely affected if the knowledge, skills and experience of the employee were not retained.
  3. Re-engagement of a retiree is subject to a satisfactory medical report..

1. Normal Increments

If an employee is granted extension of appointment on a yearly basis the Head of Department should make a recommendation for the granting of any annual increment.

2. Long Service Award

An employee's temporary service beyond retirement will be regarded for the purposes of determining eligibility for Long Service Award.

3. Educational Facilities

A retiree who is appointed on a temporary contract beyond the retiring age, along with his/her wife/ husband and/or children, who has been accepted for entry to the University are exempt from paying tuition and examination fees.

4. Provisions in the event of Death

The University will pay to the widow or widower, or if there are orphan dependent children, to a trustee for their benefit, a special grant of an amount equivalent to one year's salary at the rate at which a deceased employee on temporary contract beyond retiring age was paid as at 1st August preceding death.

Pension

At retirement, members of staff are paid the accumulated value of their Federation Superannuation Scheme for Universities (FSSU) funds. If the member of staff is tenured and has served for more than ten (10) years continuously with the University, an assessment is done and, if necessary, a supplementary pension is provided.

Housing

Retired members of staff who were housed in University housing immediately prior to the effective date of their retirement, are allowed to remain in University accommodation for up to three months after retirement, however, they would be required to pay a monthly rental at the appropriate commercial rate.

Book Grant

Staff members going on retirement may use, within one (1) year of their retirement, the balance of the Grant credited to their account at the date of retirement.

Health

The University covers the full cost of health insurance for retirees who are in receipt of a pension from the University.

Personal Rewards Outrank Economic Rewards as Reason to Work

More than three quarters (76%) of boomers surveyed who are still working plan to continue working after age 62, the age when they are eligible to receive Social Security. A remarkable 40 percent plan to continue working into their 70s. For those who will continue working past age 62, the major reason cited (72%) to continue working was for the “intellectual and social stimulation” work provides, followed by the goal of maintaining standard of living at 51 percent and to avoid tapping into savings at 41 percent. The pattern was the same for those planning to work into their 70s, with three quarters planning to keep working for intellectual and social stimulation and 39 percent to maintain their standard of living. Economics are not the primary reason these affluent boomers are continuing to work. They are reaching the highest level in their careers, making more money, teaching and training the newer members of our workforce—work provides satisfactions well beyond their need for income.

Of those taking the survey, 29 percent describe themselves as being retired in the conventional sense, while 71 percent are still employed.

But in Britain retirement is not a stigma.They cannot be denied from the job on the basis of age.

Your Right to Work

Regulations in Britain mean that an employer cannot discriminate against workers on the grounds of age. These regulations were brought into effect in 2006 in order that older people have the same rights to employment, training and adult education. It is unlawful for an employer to use age as a reason for discrimination on the following points:-

  • Deny someone training
  • Prevent promotion
  • Dismiss someone from their employment
  • Deny employment to someone
  • Retire someone before the state employment age or the company's own retirement age without a valid reason

However, an employer still has the right to refuse someone over the age of 65 or over said employer's usual company retirement age, and they do not need to give any reasons or justifications.

Working and Your State Pension

If you are continuing to work after retirement age then you can either claim your pension or defer it. If you choose to take your pension later then you may be able to get a higher rate of pension later on, or you may be able to take the deferred amount as a lump sum. The lump sum will be taxable but will have added interest and then you can begin receiving your normal pension. If you are considering either of these options then you will need to delay claiming your pension for at least five weeks in order to receive the higher rate. For the lump sum you will need to delay for at least 12 consecutive months.

Finding Work

There are endless possibilities for older workers when it comes to finding employment. Many older employees wrongly assume that they will be passed over in favour of younger employees but this is not always the case. Some employers look favourably on older workers due to their reliability, skills, and the fact that they take less sick time than younger employees.

There are government schemes specifically designed to help older people find employment such as New Deal 50 Plus and New Deal for Disabled People. These schemes are designed to help older people who are finding it difficult to obtain employment or finding employment that pays a decent wage. Job-sharing is also an excellent way of working part-time or working to more flexible hours; you can always ask your employer if they would consider flexible hours.

Asked about their number one career goal over the next five years, most boomers (53%) will continue doing their current work until they retire, while a quarter of boomers are seeking continued growth in their current careers. Only 10 percent cite “to stop working” as a goal.

Voluntary Work

Voluntary work is an excellent option if you are considering continuing to work after retirement age. Although usually unpaid, you can gain valuable new skills, and some volunteer jobs will pay tax free expenses or reimburse your expenses. Volunteer jobs can include working for the Citizens Advice Bureau (CAB), working in tourist information offices and charity shops, volunteer drivers, or you can even become a local councillor.

Continuing to work after retirement is a popular and beneficial choice for many older workers. The retirement age is only a guideline when it comes to work there is no reason why you cannot work long past retirement age if you are healthy and able to.

Private Investment Accounts Fund Retirements

Asked what the principal source of funding for retirement is, the largest number of boomers (31%) cited investments outside of a retirement plan as the “principal” source that will fund their retirement. “This finding supports the importance of maintaining a robust personal investment plan throughout a lifetime,” says Jim Bell. “To have a comfortable retirement, this generation must augment traditional tax-deferred retirement savings plans and pensions, with their own investment plan--ideally by utilizing a healthy mix of equity investments.”

Boomers ranked the “principal” source of retirement funding as:

  • Investments outside of a retirement plan: 31%
  • Pension plan: 23%
  • Company-sponsored plans such as 401(k): 19%
  • Individual Retirement Account (IRA): 17%
  • Social Security: 4%

Survey Methodology

The Affluent Boomer Survey was conducted by Opinion Research Corporation from April 1-6, 2008, among a random sample of 500 adults comprised of 250 men and 250 women who were born in 1948 and have investible assets of $1 million or more.

Bell Investment Advisors offers investment management, comprehensive financial planning, and career/life planning services to help investors plan and achieve their personal and retirement goals. The firm manages more than $500 million for its more than 650 clients. In 2007, Bell Investment Advisors was named one of the Bay Area's 100 Fastest Growing Privately Held Businesses by the San Francisco Business Times for the fourth year in a row.

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