Difficult Conversations About Retirement

Shawnee Love   •   November 22, 2019

It seems to me that the conversation about retirement got hard when mandatory retirement was stopped.

Before that, if your employee didn’t ask to retire beforehand, everyone knew 65 was the end.  Thus, the conversation was easy, because it wasn’t personal and was just the rules.

But when mandatory retirement went away, and people no longer had to wrap up at 65, it changed the situation entirely.

Sure many people still do retire at age 65 or even before. The typical conversations I observe with those soon-to-retire individuals are around how much longer they want to continue working and would they be willing to continue “helping out every now and again” or “working part time”, etc. The reason I say that is because, with the dramatically low unemployment rate across Canada, many employers are struggling to find enough workers and thus having an employee continue working part-time or casual can be a real boon to employers.

On the opposite end of the spectrum, however, is the very challenging situation where an employee stays on well beyond turning 65, and yet their work quality and/or productivity has or is declining to the point where they can’t do the job anymore. The errors become costly, the delays begin to frustrate other workers, and perhaps there are safety concerns as well.

If it were any other worker, the employer would proceed with performance discussions and/or let the person go, but this is an older worker and very likely a loyal employee who has worked with the organization for many years. Caring bosses don’t want to put this employee “out to pasture”, because they don’t want to be the type of organization who “rewards” loyalty that way. They also don’t want to feel responsible for harming the worker who needs to retire, in situations where the older worker does not have:

  • Anywhere else to go (i.e., they have no other hobbies or activities),
  • Anyone else around (aka, no family or close friends or social network to lean on), or
  • Enough financial resources not to work (i.e., they lack savings and assets to not work). In fact, according to recent research in Canada, 65% of employees still working after 65 are doing so because they lack the financial resources to retire.

No one wants to be the company that exited a poor senior who now has to make the choice between eating, paying rent or buying medicine because their savings and OAS and CPP don’t meet their basic needs.

So what can leaders do to help an employee make the transition to retirement successfully?

  1. Start the conversation about life outside of work and beyond work early.  The earlier the better in fact. You can do so when you:
    1. Have a retirement planning process that outlines possibilities, steps and rewards and recognition which employees on a retirement trajectory will experience.  I am not a fan of the engraved watch or clock, but if you offer a retirement gift of the employee’s choice, it could make retirement more appealing.
    2. Offer wealth building programs such as RRSP or Pension. Within this program, you will likely have a financial adviser who will conduct annual employee consultations which help employees to prepare financially for retirement. This type of consultation also assists employees while working, because finances are a major stressor for employees of any age.
    3. Promote wellness and self-care with ongoing education and even perks or rewards for employees who participate in non-work activities. Ideas include offering paid time for volunteering, contributing funding for healthy lifestyle activities such as exercise, meditation, eating right, stopping smoking, etc.  and supporting charities by enrolling a company team in charity events. Most of these activities not only promote health but also have the added benefit of exposing employees to new activities and people and thus possible connections.
  2. Encourage and even find ways to reward non-work activities in your company.  Ask what your people do for fun, and create clubs or social groups surrounding those activities.
  3. Consider offering opportunities for retired employees to remain connected by welcoming them to company parties and/or having an annual celebration in their honor.
  4. Hold conversations about retirement long before it becomes imminent by asking annually what employees’ plans are for the upcoming year(s). If you start talking about what retirement might feel like long before it becomes necessary, it can help reduce the fear and bring forward real concerns that you then have a chance at addressing.

Saying all that, employers can’t take responsibility for their employees’ lives.  If despite your efforts, you have someone who needs to but resists retiring, you have to decide how important it is to exit that individual and proceed accordingly. Every situation is different and so you must weigh all the options and their pros and cons before moving forward. If you need help, we are excellent sounding boards.