When Col. (retd) Daljeet S. Cheema took premature retirement from the army in 1994, only a couple of months before he was due to retire, his pension was just Rs.4,500 a month. However, three days after quitting, he started a teaching assignment in the Panjab University, which brought in additional income, and led to other career options. “I could also indulge in my passions, including writing books (18 books and a couple in the pipeline), teaching and motivating people,” says Panchkula-based Col. Cheema, who, at 79, is not only very active, but also financially secure. In fact, financial insecurity is one of the main reasons people are forced to continue working because retiring at a specific age is not a choice everyone can make. “Normally, you postpone retirement if you feel you can do more work, have the flexibility to get an extension in your organisation, or if you don’t have a sufficient corpus to take care of your post-retirement expenses,” says Santosh Joseph, Founder and Managing Partner, Germinate Investor Services.
Agrees Sanjiv Singhal, Founder & CPO, Scripbox. “Retirees can be divided into two groups – those who are financially not stable and cannot retire on their existing savings, and those with a comfortable corpus who want to stay engaged or pursue a long deferred dream,” he says. For many others, it’s simply a matter of being physically and mentally alert. “Today, 60s is the new 40s. Earlier, people wanted to put up their feet at 60, but now, they have high energy, good health, and want to give back to the society or simply not sit idle,” says Neeti Sharma, Senior Vice-President,
Agrees Delhi-based Neerja Gupta, 62, who launched her own YouTube channel immediately after retiring as a government school teacher, in September 2020. “I will continue to work till my health allows. Why shouldn’t I work when I’m still so active and have so much to contribute to the society?” asks Gupta, who also acquired another teaching job in a school last year. “The state of your health and retirement age of spouse are other deciding factors in delaying retirement,” says Dinesh Rohira, Founder & CEO, 5nance.com. “If there is a time lag of five years between the spouses’ retirement age, sitting idle may be difficult for the one who retires earlier,” he adds.
YOU CAN’T RETIRE IF
There are several financial compulsions that can force people not to quit work.
Retirement corpus is insufficient: A predominant reason for delaying retirement is insufficient funds to take care of post-retiral needs. According to Scripbox’s Financial Freedom survey, nearly 80% of respondents are unsure of retirement planning, while 62% begin saving actively for retirement only after 30. Lesser time for saving results in a smaller corpus.
There are several other factors that are working against you in building a big retirement corpus. Higher life expectancy in the past 20 years means that you will now have to make your retirement corpus stretch for longer, say 80-90 years instead of 70-80 years earlier. Add to it high inflation, especially after Covid. The increased spending will mean that you may not be able to save as much as you did earlier. Besides, medical (14-15%) and education inflation (4-5%) have also risen in the past couple of years, impacting your ability to save more for retirement, as you divert funds for children’s financial goals and healthcare needs.
The falling interest rates in small savings schemes preferred by senior citizens is another reason the retirement kitty is taking a hit. While the PPF rates have fallen from 8.8% in 2012 to 7.1%, the Senior Citizens Savings Scheme rates have dropped from 9% in 2012 to 7.4% now. Besides, higher lifestyle expenses with travelling and other hobbies after retirement mean that you may run out of your corpus in your lifetime.
You don’t have a medical corpus: The soaring cost of healthcare needs means you should have either adequate insurance or buffer to take care of your health in retirement. Without enough funds, you will either be a liability for the children or find yourself in a tight spot, making it important to keep working.
You have debt: If you have been unable to repay a home loan or have other loans that need to be serviced beyond your retirement, it will necessitate a regular income and work.
Your goals are incomplete: With the age of marriage getting extended in the past couple of decades, the achievement of children’s goals has also been pushed back. By default, most senior citizens are forced to delay their retirement till the goals have been met.
GAINS OF DELAYED RETIREMENT
While financial gains are the most obvious motivation, there are other advantages too.
You cut risk of outliving the corpus:
“If you retire at 60, you are at the peak of your career in terms of your skill set and salary. So two more years of delay could get you 10 more years of expenses,” says Rohira. Even if you are earning 50-70% of your last drawn salary, you can stretch your retirement corpus till 90-100 years or even beyond (see Working after 60…) without bothering about the impact of inflation on your expenses.
You can get employer insurance: One of the biggest expenses after retirement is on medical issues. Typically, however, senior citizens are ill-equipped to handle these because either they don’t or can’t buy sufficient insurance due to high premiums or pre-existing diseases. By extending your retirement with the same organisation or a new one, you can avail of corporate health insurance for yourself and your spouse at highly subsidised rates. Besides, you can avail of other perks like LTA, EPF, etc.
You don’t have to depend on kids: A big advantage is that you don’t have to depend financially on your children if you continue to work for 5-10 years after retiring. You can live a dignified life without taking contributions from your kids or impacting their financial planning.
You can live longer and be fitter:
Various studies have shown the positive effect of working beyond retirement on health, both physical and mental. A 2015 US study of 83,000 respondents, published in Preventing Chronic Disease, suggested that those who worked over 65 years were thrice more likely to be in good health and about half as likely to have serious health issues like cancer or heart disease, compared to those who didn’t work. “If I have avoided dementia and Alzheimer’s, it’s because I’m very busy and am doing a lot of things,” says Col. Cheema. Besides preventing stress and dementia, working can help deal with the issues of loneliness and lack of self-esteem that comes with retiring from active employment.
Indulge in your passions: If you have built a sufficiently large corpus, this is the best time to live your dreams. Mumbai-based Gautam Patel is doing just that. The 65-year-old has built an adequate retirement corpus and now runs a gaushala in Nashik where he spends 2-3 days a week. “I always wanted to move away from the hectic Mumbai life and live in a peaceful village after I saw one of my relatives doing the same,” says the former HR executive, who now sells ghee at Rs.3,000 a kg from around 30 cows he has at Shevgedang in Nashik.
PREPARE FOR TRANSITION
Whether you want to or are forced to continue working after retirement, it is important to start planning 4-5 years before you hang your boots.
Choose what to do and how much: Be clear about the type of work you want to do and the time you can devote to it when you retire. Know whether you want a full-time or part-time job, whether you want to work from home or go out in the field. “A lot of people may want to opt for semi-retirement, where they are working 4-5 hours and keeping themselves occupied without the stress of a regular job,” says Sharma. You should also check if you can extend your retirement at your existing workplace or will have to look for a new job, whether you want to launch your own enterprise or have an advisory role.
Upskill & network: Depending on the type of work you are looking at, you should start upgrading your skills with free courses from Coursera, Udemy, Udacity, etc, and increasing your network beyond your existing job. “You should also research the educational qualifications, certifications, licenses and other regulatory requirements,” says Singhal.
Job options: While your skillset and networking should help you find job avenues, you can also look for opportunities on professional sites like LinkedIn and Naukri.com, which offer jobs specially for retired personnel. If you have a specialised skill or experience, you can get into consulting, advisory or mentoring roles, which also pay well. Other options include tutoring, training, setting up a YouTube channel, blogging or content development, starting your own enterprise, online data entry or virtual assistant jobs, among others. “With the gig economy booming, a lot of people now work as freelancers or part-timers, have side hustles, and also from home,” says Joseph.
Research remuneration: “The postretirement remuneration may not be the same as when one was fully employed, but most people are fine with 60-70% of their last drawn salaries,” says Sharma. Still, you should check the market rates and negotiate, if necessary. “Those who have retired from senior management or high posts at the peak of their careers act as advisers to start-ups or small businesses and are making much more money with 4-5 hours of work than they were in fulltime jobs,” says Rohira.