Options for retiring long term 'employee'...

[Lucan Unlordly]

I have a close friend who's been working as a buyer for electrical equipment manufacturers for most of his life. For the past 20 years heading a department of 10, now reduced to 2 including himself, for a huge company with a multi million pound turnover. Despite the immense pressure, stress and subsequent health issues he has chosen to work past retirement age because he *needs to and wants to - for all that employment and working with others brings. In contrast the company are desperate to keep him on as the process of replacing him would cause untold disruption in the short term, probably longer.

But here's the rub and why I'm bouncing my thoughts off others. His *salary is way, way below what one would expect for the responsibility he's carried for years. Whilst he's been happy working in a fairly secure role, never having experienced redundancy, the sack or being out of work it's come at the price of an insufficient pension pot etc., so my advice to him is to ask for a significant raise if they want him to stay on.

What would you do?

 

[HFE Signs]

I think the key thing here is whether he is happy or not - whilst money is important, we tend to get use to it and it won't reduce the stress or pressures of the job - working past retirement is more common these days. Without knowing the job, responsibilities and workload it's hard to say - how about proposing to work a 3 day week but keep the same salary? Maybe with a view to reduce to 2 days in x months.

 

[Newchodge]

Asking for a payrise is not a dismissable offence. There is no such thing as retirement age. He should get his facts organised (salaries in other organisations, slaaries within the organisation, previous pay rises, and just ask.

 

[HFE Signs]

Asking for a payrise is not a dismissable offence. There is no such thing as retirement age. He should get his facts organised (salaries in other organisations, slaaries within the organisation, previous pay rises, and just ask.

I've seen employment contracts that refer to retirement age

 

[Newchodge]

I've seen employment contracts that refer to retirement age

They may do, but there is no requirement for anyone to retire at any age unless it is in an occupation where physical abulity matters. A retirment age would be age discrimination.

 

[HFE Signs]

They may do, but there is no requirement for anyone to retire at any age unless it is in an occupation where physical abulity matters. A retirment age would be age discrimination.

I guess that also depends on the wording within the employment contract - common sense tells us that somebody 95 won't perform the same as somebody 35

 

[WaveJumper]

Is there a chance then the company are looking to let him. The big question will be is he happy doing what he's doing. certainly there is no harm in asking for a pay rise but going in armed with some evidence will not hurt his cause.

If past retirement age has he opted to leave his state pension ticking along until he needs it, has he taken a detailed look at what he needs to live on ie all his current pensions and maybe a part time job a couple of days a week to lesson the stress, is there an option to cut his hours down in current role.

A lesson to others on the pension pot issue especially for the younger members reading this, check your own plans, are you really saving enough, check online and see what you "pot" of savings will net you a month ......... you may get a horrible shock

 

[WaveJumper]

I guess that also depends on the wording within the employment contract - common sense tells us that somebody 95 won't perform the same as somebody 35

Well they may need glass's but seeing some of the youth today in action (or lack of) they could quite possibly run circles around them.

 

[Lucan Unlordly]

I think the key thing here is whether he is happy or not - whilst money is important, we tend to get use to it and it won't reduce the stress or pressures of the job - working past retirement is more common these days. Without knowing the job, responsibilities and workload it's hard to say - how about proposing to work a 3 day week but keep the same salary? Maybe with a view to reduce to 2 days in x months.

My understanding is that a day off results in doubling of the workload the next day. This no doubt because he's ruthlessly conscientious and the system has developed to suit a work ethic that is not common place.

I'll mention it as it's certainly worthy of consideration in the run up to any handover of the reins further down the line.

 

[Lucan Unlordly]

Is there a chance then the company are looking to let him. The big question will be is he happy doing what he's doing. certainly there is no harm in asking for a pay rise but going in armed with some evidence will not hurt his cause.

If past retirement age has he opted to leave his state pension ticking along until he needs it, has he taken a detailed look at what he needs to live on ie all his current pensions and maybe a part time job a couple of days a week to lesson the stress, is there an option to cut his hours down in current role.

A lesson to others on the pension pot issue especially for the younger members reading this, check your own plans, are you really saving enough, check online and see what you "pot" of savings will net you a month ......... you may get a horrible shock

Missing word at end of first sentence 'go'? If so, I don't believe so.

I couldn't say for sure but I think taking on another job would likely be out of comfort zone and stressful for other reasons? I believe the state pension is being taken.

On your third point, I've never paid into a private pension and as I've recently hit retirement age the juries out as to what effect that will have going forward. In the past 8 years I've lost friends aged 43, 44, 53, and 57. All but one were big advocates of saving for the future.

 

[WaveJumper]

Missing word at end of first sentence 'go'? If so, I don't believe so.

I couldn't say for sure but I think taking on another job would likely be out of comfort zone and stressful for other reasons? I believe the state pension is being taken.

On your third point, I've never paid into a private pension and as I've recently hit retirement age the juries out as to what effect that will have going forward. In the past 8 years I've lost friends aged 43, 44, 53, and 57. All but one were big advocates of saving for the future.

Yep i missed the 'go'. Maybe difficult if employed in the same role for 20 odd years it can be scary, but change can always be scary, like suddenly realising one is not in control of their future, and perhaps stuck for financial reasons.

Without knowing all the numbers it could be (and I say could be) unfortunate he's taking his state pension at this time and possibly put himself in a higher tax bracket, its just a thought.

Yes agree you can life for today and not worry about tomorrow, I have friends who had adopted that stance, but and it maybe a big but for some, when you're 57, 67, 77 or even 87 do you want to be worrying about where the next pound is coming from. As for your friend I wonder if he asks himself "I have worked all my life but can't afford to retire" all I am saying is when you get to say 50 thats not the time to be thinking about it especially if you want to sustain your current lifestyle.

Not knocking your friend or anyone else come to that, just something for some maybe to dwell on.

 

[IanSuth]

How about he suggests to the company that he retire but be kept on as a consultant on a hour/day/month rate to help ease the handover to another over a longer period of time and so they don't have to hurry to find the right person

If he pitches the amount right he can end up earning the same for less hours and gradually wind down his hours over a year or 2

If he is just a consultant the company may save on some of the benefits they don't get an age related surcharge on anymore (life assurance and health insurance for example) so would pay him more per hour

 

[MBE2017]

Some people have never been rewarded enough to save a decent amount for retirement, particularly those on low incomes or just above the average salary.

Things are slowly improving but many in the world are what I would call financially illiterate, tending to think the state will look after them if nothing else.

 

[Lucan Unlordly]

As for your friend I wonder if he asks himself "I have worked all my life but can't afford to retire" all I am saying is when you get to say 50 thats not the time to be thinking about it especially if you want to sustain your current lifestyle.

Agree with the second part, and as for not being able to afford to retire, that's always subjective as we found out when an elderly relative who'd not stopped working but couldn't afford a holiday, was sitting on £40k rainy day money in one account alone!

 

[DontAsk]

But here's the rub and why I'm bouncing my thoughts off others. His *salary is way, way below what one would expect for the responsibility he's carried for years. Whilst he's been happy working in a fairly secure role, never having experienced redundancy, the sack or being out of work it's come at the price of an insufficient pension pot etc., so my advice to him is to ask for a significant raise if they want him to stay on.

Also consider that every year he stays on leverages his finances in a very positive way, He gets an extra years full salary (rather than pension) and his pension will pay more or last an extra year (since he will defer drawing it by a year). He can also keep contributing.