Holistic Retirement Planning for Older Workers
19/09/2024
Joanne Earl is a Professor of Psychology at Macquarie University and researcher specialising in the psychological aspects of retirement planning. There are three main streams to her research program: identification of variables predicting retirement outcomes, design of new psychometric measures and building of large scale interventions to improve planning of older workers and retirees.
Often when people think about retirement planning, they only focus on the financials. But career advice has a critical role to play in the future of older Australians. Some of you might have heard me speak at previous CDAA conferences about the emerging role of career advisers in retirement planning. Well career professionals – your time is now.
Over the course of the past three years, we have been testing an intervention that consists mainly of online training modules and consultations in careers, health and finance in that order. That’s right – career consultations before health and finances. Here’s why. We noticed something very interesting in the ABS data over time – many people (about 160,000 people) – leave work to retire and then try to re-enter the workforce a year later. The main reason they try to return is money and secondly, boredom.
Getting back into the workforce after taking a break at an older age might not be as easy as it looks. We wanted to break that cycle and encourage people to take the time to make more considered career decisions before they leave. We figured that the key to unlocking better retirement planning was better career decision making. That does not necessarily mean working for longer or leaving earlier to make the best of good health – just a more considered decision.
This led me to compile a team of experts to solve the problem including Dr Anna Mooney, a fellow retirement researcher, Professor of Finance, Paul Gerrans and a Geriatric Psychiatrist, Associate Professor Chanaka Witjeratne, and Associate Professor Carl Mooney, an expert in online learning design.
Together with input from doctors, financial advisers and career advisers we designed three x 1 hour online modules – one about careers, one about health and one about finances. We tested these alongside financial modules as well as in combination with consultations. We advertised Australia wide and had more than 800 people aged 50 years and over participating. For the online career modules, we covered topics like:
- why people leave work
- how exercising choice matters
- different ways that people continue to work
- how you feel about your ability to keep working (workability)
For the career consultations we designed a standard script to help people unpack why they wanted to leave work and how they planned to spend their time afterwards.
Reasons for wanting to leave work and retire were mainly around work stress, spending more time with friends and family or anticipating ill health at older age. One of our goals was to unpack any reasons, the origins and assumptions. There was an exercise asking them to calculate how they would use the 62 hours of free time they would have when they left work. Going to the gym you say? Well that kills about 5 hours a week – only 57 to go.
It was surprising how many people had factored in other people – but forgot to tell them. The “grandparents” who were planning on minding the grand kids – that hadn’t been conceived yet. The husband who would be the constant travelling companion who didn’t know yet they had been conscripted.
Despite people having long term contracts ending within the next 12-18 months, they had not thought about where work might come from in the future. Many had not considered the option of easing themselves out of work by exploring bridging work or exploring selected aspects of their current roles in more depth.
Some realised that making some health tweaks now might keep them staying for longer. Others had very definite ages in mind – usually 65 - but couldn’t remember why. Once they completed their career consultation, they went on to do a health module, get a basic health check and re-evaluate the age they nominated to retire after the career consultation.
Lastly, they completed a finance module that helped them to understand how much money they might need, where to get extra income, what government benefits they might be entitled to, and different savings strategies. As a final step, they met with one of our ASIC registered financial advisers.
Every time they took a step they reflected on their reasons and when they might retire. It was a process of testing and retesting their ideas every step of the way. What did we learn? To really see impact, people needed to complete the modules alongside consultations. In fact, when we looked more closely at the results almost every metric improved when the two were combined.
So how might these results be useful to careers advisers in the future? Well firstly, the modules are available for you to include as pre-work with your clients. These are a great way to engage people in the process quickly and to widen their lens about the different elements to consider in curating a plan for retirement.
If you work in organisations in a career development role you might like to make them available to your employees as a precursor to in-house consultations or seminars and help lay the foundations of knowledge to increase confidence and prompt curiosity.
The full research article published in the international peer-reviewed journal Work, Aging and Retirement outlining the results is available here. The course details are available here:
