Postponing retirement: enjoying work after the age of 65

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Postponing retirement: enjoying work after the age of 65

We are getting older and older, and the Swiss pension system is in trouble – however, nobody wants to work longer. Is this true? What are the advantages of having older employees? And is it even worthwhile to continue working after retirement?
Team photo with employees from different generations
Many people in Switzerland retire each year. Retired people make up an increasingly large share of the population. At the same time, fewer young people are entering the workforce to replace them. According to forecasts by UBS, the Swiss market will be short of half a million workers by 2030. Working longer and beyond retirement age appears to be the solution to the demographic shortage of skilled workers. But are employees willing to work longer in the first place?

Many want to, but only a few can

40 percent of the 50- to 64-year-olds surveyed in 2019 in a study by Deloitte want to work beyond retirement. A similar picture was found among those who had already retired: 30 percent of them would have continued working if they had had the opportunity. But what is the reality? Only 20 percent of 65- to 74-year-olds in Switzerland are still gainfully employed. That is about 180,000 people. Slightly more than half of them have a workload of less than 50 percent. This is according to an article by Beobachter, which attributes the reasons to the government providing too few incentives for people to continue working.

"People who work voluntarily are highly motivated"

Older employees bring advantages. Anna Fankhauser, HR manager at B+S Ingenieure und Planer, is convinced of this. The company currently employs ten people who are working past retirement age. "For us, it is very valuable that experience is be passed on to younger employees. This is the only way we can ensure that there are enough qualified specialists to fill vacancies." At B+S, every employee can continue working until the age of 70, with a workload that suits them. The model is based on trust and is profitable for both parties.

Anna Fankhauser is against increasing the regular retirement age. She values freedom and flexibility: "People who work voluntarily are highly motivated." She says that it is important for people to feel appreciated. Many people, especially management staff, find retirement difficult. A flexible, step-by-step transition often makes the path to retirement easier.

According to the latest statistics on new retirees published by the Federal Statistical Office, around 54 percent of women between ages 64 and 69, and 61 percent of men between ages 65 and 71 said that they continued working for the pleasure of it. Only 20 percent of those surveyed continue to work after retirement for financial reasons.

For us, it is very valuable that experience is be passed on to younger employees. This is the only way we can ensure that there are enough qualified specialists to fill vacancies.

Anna Fankhauser, HR manager at B+S Ingenieure und Planer

Flexibility, social contacts and mental stimulation

Hans Ulrich Kaufmann (68), Michael Keller* (72) and Werner Althaus (75) are still working. While Hans Ulrich Kaufmann is employed on an hourly basis with a 25 percent workload, Michael Keller* works for a company full-time as a freelancer. Werner Althaus is self-employed and currently works about 40 percent. We talked to them about the benefits, motivation and incentives to continue working.

What motivates you to continue working?

Hans Ulrich Kaufmann: For me, it is crucial that I can continue to maintain social contacts in the professional world. I appreciate the exchange with team members and the opportunity to work on exciting technical issues. Part-time work allows me to gradually transition to my private life and allows me to achieve a good balance between work and family or leisure.

Michael Keller: If you rest, you rust. It motivates me to perform a job that keeps my mind fresh. My work as a metal trader continues to fascinate me, with all its facets and its broad professional spectrum. It is important to me that I can continue to maintain many contacts. Even today, I am still continuously developing myself through my work, and that's why I don't want to stand still.

Werner Althaus: As a pensioner it's important to structure your day well, and my work supports this. This enables me to stay healthy and gives me a sense of achievement. The transition from full-time work to doing nothing never happened to me. Now I have much more freedom: I can choose my own clients, do work that offers added value to others and remain professionally up to date.

Is it financially worthwhile to work past retirement?

Hans Ulrich Kaufmann: Optimizing my financial situation was not my main focus. I receive a retirement pension; I'm doing fine financially. However, I continue to pay AHV contributions without receiving anything in return. There might have been better tax options: my pension is accumulating with the extra income. It would be desirable for the government to encourage and reward employment after regular retirement age.

Michael Keller: The fact that I still earn a few francs is certainly an advantage, and it allows me to continue my hobbies such as sports and travel. However, the tax burden is quite high, which I was aware of: I also have to pay tax on my pension. I was surprised, though, that I still have to pay AHV contributions, even though I've paid them all my life, just like everyone else. So, anyone who continues to work is still penalized financially. I don't think that's right. The bottom line, though, is that for me it's still worthwhile, otherwise I wouldn't work anymore.

Werner Althaus: I assume that people don't have to continue working for financial reasons, but rather do so voluntarily. For me, financial aspects are not at the forefront. I pay more into AHV than I receive in the form of a pension. But I didn't want to postpone AHV either: if I've already paid it in, I'd like to receive my pension. Tax considerations are not relevant for me when it comes to whether or not I continue working.

Was it easy to find employment beyond retirement age?

Hans Ulrich Kaufmann: I entered early retirement at 60, but I never intended to stop working entirely. I already had a new job in sight and was employed there for a good year. Then I received a request from the Vita Joint Foundation. They needed support in a very specific field, and I was recommended by two former colleagues. So, I didn't actively go out looking, but the offer came at the right time, since the other project was just about finished.

Michael Keller: I worked for another three years beyond regular retirement age: for my employer for whom I had worked for 25 years. Thanks to the large network that I had built up over many years, I received various offers to continue working. My work is very capital-bound due to pre-financing. So, I opted to join a company as a freelancer that could guarantee this pre-financing. I was certainly helped by the fact that I was always interested in technology, research, new developments and industry trends. That's how I acquired broad product and industry knowledge.

Werner Althaus: I got lucky. For 30 years I worked in management positions at two banks. At the age of 55, I had the opportunity to start my own business in the same field: financing companies. At 65, I was involved with various clients, and retirement in the classic sense never happened. In the first few years, I continued with about an 80- to 90-percent workload, and now it's still about 40 percent.

What do your family and friends think about your decision to keep working?

Hans Ulrich Kaufmann: My family and friends think it's positive that I can continue to pursue a challenging job. But I'm not the only one in my circle of friends. Several colleagues, most of whom I've known since university, are still working beyond regular retirement age. Most of them work part-time.

Michael Keller: When I was 68 years old and changed direction, my wife said to me that she admired me for continuing to work. That was a great motivational boost for me. My daughter and my son also stand behind me. My wife and I like to make one or two trips a year, which is no problem: I have holidays and as a freelancer I can arrange my schedule flexibly. As far as my friends are concerned: people are free to think whatever they want. And people are also free to do the work that they enjoy.

Werner Althaus: I am in the fortunate position that my wife has a similar attitude and also continues to work. She had little time to develop professionally with our children and is now catching up. So now we can enjoy the end of the workday together, with the freedom of the children being out of the house. The rest of the family supports us and is happy that we still have something to do.

How long do you want to continue working? And what do you think of a general increase of the regular retirement age?

Hans Ulrich Kaufmann: I don't have a specific end date in mind for my professional activity. It depends on whether it remains suitable for me and my employer. A general increase of the retirement age is unavoidable in order to stabilize the pension system. However, incentives should also be created to actively promote professional activity beyond the regular retirement age and to make it flexible. The government ought to have an interest in not penalizing continued employment.

Michael Keller: I couldn't say right now. What's certain is that I need to continue to enjoy my work, and my health has to allow me to do so. A part-time workload has never been an option, as my job requires full-time presence. A gradual reduction may be an option at a later date at best. The retirement age should definitely be increased, or rather it should be structured in a fluid and individualized way and not fixed at 65.

Werner Althaus: I will continue to work for as long as I feel that I am offering added value to my clients. One reason why I have reduced my workload is the rapid development in my field. I am currently continuing some long-standing projects that are starting to come to an end. I'll be working on them at a 40 percent workload until next year, when I'll be reducing my workload even further. The retirement age should not be generally increased, but rather made more flexible. People who do hard physical work and are exhausted should be able to retire on time. Everyone should be able to decide for themselves what is right for them.

What tips can you give to someone who wants to continue working after retirement?

Hans Ulrich Kaufmann: It is very important to actively maintain a professional network and to keep your contacts alive. It takes courage to tackle something new and you need to enjoy working with young people. You should also have an interest in new tools and processes and be willing to engage in further training. And what's very important is that you should be open for changes in your personal working environment. It takes willingness to accept your new role. I enjoy being able to concentrate on purely technical issues without, as in the past, having to take on large and burdensome HR responsibilities.

Michael Keller: If you wait until retirement age to get interested in continuing to work, that's far too late. My tip is to be hungry for knowledge, to continue your education throughout your life, to try to keep up with new developments and to read a lot. All that gives you the opportunity to continue to have an interesting job after 65.

Werner Althaus: Self-employed people have an easier time if they want to continue working. The danger is rather delaying the time of transfer for too long. Managers of SMEs in particular often have trouble letting go. If you decide to stop working, it's crucial to think about it early. It's important to be able to continue to pursue meaningful work and not become a "victim of retirement."

*Name changed

AHV, pension fund, Pillar 3a: what you need to bear in mind

Are you interested in working beyond the regular retirement age? If so, it is advisable to be well prepared. You can find the most important information regarding AHV, pension funds and Pillar 3a here.

Transparency for your pension

Do you know how much money you will have on hand after your retirement? Getting an overview couldn't be easier, using the Vita Pension Calculator.

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