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The Star Online - Tapping the 50 Plus Market by Carol YipEmployment after 55 becoming a trend as living costs rise

By Carol Yip
Saturday April 25, 2009

HOW to stretch your ringgit when you hit 55? Continue to work is the answer. The current financial crisis is a clear message that we need to work longer to ensure that we have money to live through retirement if we cannot depend on investments for financial security.

Imagine if we face a similar crisis when some of us are in our 50s, 60s or 70s? What will happen to our retirement money?

Even if our investments are not affected by the crisis, it can still be financially challenging for some to live through old age, especially in this world of consumerism and rising cost of living, coupled with the smaller family nucleus, having kids at older age, broken families, divorces, being a widow and single parenthood.

There will come a time when retirees need to work again, not for passion but for the money. Therefore, the ability to work and the opportunity to be employed beyond 55 are necessary. This is evident in Singapore and Japan.

Singapore will put in place a new law in 2012 that requires firms to rehire workers beyond the retirement age of 62.

Japan’s pensionable age is being lifted gradually from 60 to 65 because Japanese workers are finding it increasingly necessary to continue working after retirement to help defray the rising cost of living as well as to cope with shrinking pensions.

The gradual revision started in 2001 and is due to be completed in 2013. Under the law, employers can choose from three ways to extend the employment of workers.

The most popular option is to keep the retirement age at 60 and re-employ workers after they retire, as this entails minimal changes to hiring policies. Some companies prefer the second option of raising the retirement age to match the pensionable age.

McDonald’s Japan is one of the few companies that have adopted the third option – eliminating the retirement age altogether. The country’s largest hamburger chain even has workers in their 70s and early 80s at its outlets.

In Malaysia, many have to retire at 55. Some choose to retire early, with the hope of enjoying life or finding better financial prospects with other jobs or through businesses. There are cases of retirees failing to make money doing business and ending up using up large portions of their retirement funds to sustain their businesses.

Unless a person is equipped with entrepreneurial skills, abilities, networking, knowledge and experience to do something that can make money, his safest option is to continue to be employed.

However, even if we want to continue working after 55, there is the employability issue. Most companies are not keen to employ people who are approaching their 50s unless they have special skills, valuable knowledge and experience, reputation, recognition or good connections. People who lack the suitable criteria will disappear from the employment radar.

It does look like a chicken-and-egg situation. Do we need to first urge employers to extend the employment age beyond 55 or should employees first demonstrate keenness to continue working past 55?

Unless we have the means to continue growing our money, we may not be able to see the silver lining beyond those grey clouds.

For a better tomorrow, we should seriously look into employment after 55. Employers need to consider extending the employment age to at least 65.

We should also have headhunters and employment portals for people in their mid-40s and above, making it easy to match employees and employers in this target market.

Living through middle age and into retirement can be challenging. At work, we either experience being productive or we are in stagnation. Therefore, it is good for human resources personnel to conduct training-needs analyses for employees aged 40 and above so as to identify programmes to upgrade skills, promote motivation and instill confidence.

I would also suggest health education programmes on the ageing process and active living for the employees to prepare for transition to their “Third Age”. This is because hormonal changes (menopause for women and andropause for men) can affect employees’ moods, emotions, self-esteem and motivation at work.

Last but not forgotten, financial programmes on personal money management, financial products and how to invest money wisely are important soft skills training. After all, money is a reason for working

Carol Yip is a personal financial coach who is founder and CEO of Abacus for Money.

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