Rethinking Retirement: The Role of AI and Flexible Work
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The concept of retirement has evolved over the years, and with the increasing integration of AI in the workplace and the rise of flexible work arrangements, is it time to revisit our understanding of this stage in our lives?
Shifting work dynamics
Advancements in AI and automation have reshaped the workforce, reducing the prevalence of physically demanding, manual labour jobs. Whilst there are still lots of hands-on, physically demanding jobs in existence, their number has drastically reduced since our grandparents’ time in the workplace, and even further, they’ve become much, much safer than they once were.
Automation in the workplace has freed up many human workers to focus on higher-level cognitive and creative tasks. This shift has created an opportunity to reconsider the retirement age, as physical exhaustion may no longer be the primary reason for retirement.
Extending the retirement age to 75 could provide significant economic benefits to both employers and employees, as well as our fragile economy. From an employer's perspective, it allows for a more gradual transition of the workforce, reducing the strain caused by sudden retirements and the loss of experienced employees. Employers would have access to a larger pool of experienced workers, who can provide mentorship and training, and who could transfer critical knowledge to younger employees.
For employees, an extended retirement age provides the opportunity to accumulate more savings and increase their retirement funds. With longer life expectancies becoming the norm, individuals often find it challenging to maintain financial security throughout their retirement years. Extending the retirement age could help bridge the gap, allowing individuals to save more and have a more secure financial future.
When the state pension was envisaged, it was a different period in history. People didn’t live as long, so the weight of state retirement payments was much easier for our economy to bear. That picture today is much more top-heavy than it was; it’s conceivable that, at some point in the future, if nothing changes, the state will pay out more in pension payments than it receives from taxpayers. Eventually, the system as it stands today will become economically unsustainable.
In recent years, there’s been a huge push towards employees paying into workplace pension schemes to supplement their state pension, and lots of education in schools to encourage the young to consider their retirement and the money they may have to live on the minute they start work for the first time.
It’s clear that state pension payments will not keep up with inflation (I think we’re already far past this point). The real cost of living will be beyond what goes into retirees’ bank accounts from the government. Whether such income is boosted by a private pension annuity or the individual continuing some kind of paid work, this may be the only way a retiree will be able to thrive in their twilight years rather than simply survive.
Workforce experience and expertise
One of the significant advantages of extending the retirement age is the retention of valuable workforce experience and expertise. With an ageing population, there is a wealth of knowledge accumulated over decades of work that could be lost if individuals retire too early. By keeping experienced workers in the workforce, companies can leverage their expertise to drive innovation, enhance productivity, and improve overall organisational performance.
Redefining how we view retirement
Extending the retirement age also necessitates a reimagining of retirement itself. As already mentioned, rather than perceiving retirement as an abrupt departure from the workforce, it could be redefined as a transition into different roles or reduced hours. This could involve flexible work arrangements, remote work options, or part-time engagements that allow individuals to continue contributing to society whilst enjoying a much more balanced lifestyle.
The downsides and challenges of an age extension
Whilst there are potential benefits to extending the retirement age, it’s crucial to consider the downsides and challenges associated with this shift. One concern is age discrimination in the workplace. Some employers may prefer younger employees who they may perceive to be more tech-savvy or adaptable to changing technologies. Policies and measures would need to be put in place to prevent this and to ensure equal opportunities for all age groups.
Additionally, the health and well-being of older workers must be prioritised. As individuals age, they may face physical or cognitive limitations that could affect their ability to perform certain tasks effectively. Employers would need to provide appropriate support, accommodations, and training to ensure the continued well-being and productivity of older workers.
Where I sit…
My personal view (aged 49) is that the state pension is not going to provide me with the kind of lifestyle I’d like to enjoy when I’m older. Unlike my husband, I’m a desk worker who predominantly takes on jobs and projects that fulfil me. I understand that, as a manual worker, why he is keen to finish work completely in a decade’s time—it already takes its toll on him, physically. It wouldn’t be a choice: he wouldn’t be able to do his role past retirement age.
In comparison, as long as my mental faculties remain intact, there’s no reason why I couldn’t carry on working through my seventies—maybe even into my eighties. My hope is that I’m not chasing my tail anywhere near as much then, and that my hours would be part-time, rather than ‘every hour God sends’, as is my current schedule.
If I’m honest, I’ve juggled so many commitments throughout my working life that I don’t know if I could ever fully stop. I have a fear that if I stopped, I’d drop.