According to Stats NZ, “the proportion of the population aged 65+ employed has steadily risen from 11.4% in 2001 to 16.8% in 2006 and 22.1% in 2013”. There is no official retirement age in New Zealand, although eligibility for NZ Superannuation begins at 65.
Money doesn’t seem to be the main motivator to keep working after 65 as, according to the 2014 New Zealand General Social Survey, of people aged 65+ “71% reported having enough or more than enough money.” As well as money, there are several other benefits and drawbacks to working during later life. A job can provide social interaction, add structure to the day and can bring satisfaction. Some people find they get bored without a job, they like having a place to go, meeting with people, being part of something, and feeling they are contributing. The mental stimulation can also be a draw, with many jobs offering the opportunity to keep learning and to stay current: “5,403 over 65 year olds participated in study in 2013,” according to Stats NZ. The motivation to study is not necessarily related to paid work.
Having to schedule around the work week and not having enough time to pursue other things are definite drawbacks. If a person had a stressful or physically tiring job, they might enjoy the free time retirement brings. Their aches and pains might diminish with retirement, and sometimes freedom is more important than money. Although they would still be able to receive NZ Superannuation while working, they may be taxed at a higher rate because wages will be added to Superannuation.
In light of the Covid-19 pandemic, the Treasury released a range of scenarios and projections of the numbers of people who may become jobless. With so many people facing the possibility of losing jobs, how will the situation develop for those ‘older’ employees?
As companies struggle through the fall-out of the pandemic, they need to make the best decisions for their businesses. If there are lay-offs, companies will need to keep the best employees. Age is not a predictor of job performance, but will age be a deciding factor? It is illegal to make employment decisions based on age, but could older employees face more lay-offs anyway?
New Zealand has over half a million workers over the age of 55. They make up nearly a quarter of the total workforce. For some older employees, moving to part time work or retiring may be feasible. For others, these options may not be possible. Despite 71% of seniors reporting that money is not the driving factor in their wish to continue working, financial need is likely more prevalent than many admit. For many more, the extra income adds significant comfort to their lifestyle. Life expectancy is increasing, and some older people may not have planned to be able to afford to live until they were 100. The Covid-19 impact on financial markets will possibly increase the number of older employees who need to continue working because of reduced income from investments, lower dividends and lower interest rates.
Employers may find it beneficial to create transition pathways in a “life stage” approach rather than an age based approach: when an older employee no longer wants to or needs to work full time, a more flexible transition into part time work (which is becoming very common) could be created when possible.
Most importantly, if older employees choose to work after 65, no one should underestimate the skills and work ethic they bring to the workforce from their valuable work and life experience.
Thank you Carol Peychers, Roger Tweedy and Judith Davey for your help with this blog post.