Are Your Employees Psychologically Prepared For Retirement?

Top tips for HR professionals

Roughly 10,000 baby boomers are expected to retire every day over the next decade.  Most firms are helping employees plan financially for this transition, but psychological preparation is equally important. 
 

Depending on one’s health, retirement can span dozens of years. The transition into this next chapter is complicated by the fact that most people are not mentally ready for what could be one of the longest phases of their life. 

Many professionals have a deep emotional connection to their careers. When they think of leaving their full-time occupation a number of emotional reactions can get stirred up:

• Loss of a familiar role
• Loss of status
• Loss of daily routine or structure
• Loss of the rewards associated with work such as feelings of accomplishment, a sense of purpose, and relationships with colleagues, vendors, and clients

The emotions triggered as people contemplate this transition can sabotage them and derail their planning process.  When key employees are ambivalent about retiring, the following can occur:  

• The person has difficulty deciding on or committing to a definitive date to retire. This impacts the firm’s operations and succession planning process.
• The person steps down but won’t step away (e.g. insists on attending meetings, being copied on emails, and offering input).
• The person doesn’t fully cooperate with the succession plan (e.g. criticizes or undermines their successor, offers little training or developmental guidance to those next in line).

How can an HR professional address these behaviors?  As with so many workplace situations, a combination of directness, tact, and sensitivity is called for.  Here are some possible things you might say:

“You mentioned that you’re thinking of retiring sometime in the next two years.  As we plan upcoming initiatives, we would like to find a balance between the company’s needs and your schedule.  How soon can you get back to us with a firm retirement date?”

“I’m hearing from people that they’re confused about your role and they’re not sure how to respond.  On the one hand, you’ve announced that you’re stepping down and turning responsibilities over to others, but staff says, you maintain the same level of involvement as before.  Perhaps it’s unintentional, but you seem to be sending mixed messages and I’d like to talk about how we can lessen that.”

“Your legacy here will be impacted by the degree to which you can help your successors succeed.  Your accomplishments take on added meaning when they provide a framework that others can then build upon.  How can we ensure that your wealth of institutional knowledge is transferred to those who follow in your footsteps?”

In an ideal world, organizations would be proactive.  They would have well-designed succession processes. They would have respectful discussions with employees, noting that regardless of where one is on the arc of their career, the reality is that it will eventually come to a close.  They would establish flexible arrangements so that employees could gradually throttle back while still making a meaningful contribution.  They might even offer workshops to help employees explore the head and heart side of retirement.  Not every organization is in a position to do all these things.  Many firms simply bring in a financial representative from their 401(k) plan to make a presentation about retirement planning and that’s the extent of it.  

If companies want their older employees to smoothly move from their current position and craft a compelling next chapter, it’s going to take more than offering a PowerPoint presentation describing the rules around IRA withdrawals.  The transition to retirement is a lengthy, complex process for most people, and HR professionals are in a position to ensure that psychological preparation is not overlooked.

Additional Resources:
Schlossberg, Nancy (2004).  Retire Smart, Retire Happy.  Washington, DC: American Psychological Association.
Anthony, Mitch (2014).  The New Retirementality.  New Jersey:  John Wiley & Sons.

Author Bio

Larry Gard, Ph.D. is President of Hamilton-Chase Consulting in Chicago.  He is the author of “Done With Work – A Dozen Perspectives on the Decision to Retire". He has over 20 years of experience helping people overcome the all-too-human obstacles that impede performance.   Connect Larry Gard Visit www.hamiltonchaseconsulting.com