The Golden Years Try G--Go Years(extended)

The Golden Years? Try Go-Go Years (extended)

A talk with retirement guru Ken Dychtwald

People used to work for 40 years, then abruptly head out to pasture. Today retirement is a more active pursuit, combining work, self-improvement, and fun, says Ken Dychtwald, cofounder of Age Wave, a San Francisco research firm that focuses on the graying workforce. Dychtwald, 54, is a psychologist and gerontologist and author of 10 books on aging-related.

BusinessWeek Associate Editor Toddi Gutner caught up with him by phone to explore his views on the new definition of retirement. Edited excerpts from their conversation follow. (Note: This is an extended, online-only version of the interview in the July 26, 2004 issue of BusinessWeek.)

Q: How has retirement evolved?

A: At the beginning of the 20th century, there was essentially no retirement. People worked until they died, and they thought it was a good thing. In the 1930s, the Depression saw 25% of the labor force out of work. President Roosevelt decided to make room for the younger generation and created the retirement age of 65. Retirement over the next several decades meant a short pause before death. But life expectancy increased, the quality of life for retirees improved, and financial well-being rose. In the 1980s and '90s, retirement became an extended period of leisure that was promoted as something infinitely desirable, and something we were all entitled to.

Q: Where are we now?

A: Today's retirees are social guinea pigs. We're shifting away from the model of learning for 20 years, working like a mad dog for 40, and goofing around for 20. What's evolving is some new blend between learning, working, and leisure. Retirees are saying: "Just because I'm older doesn't mean I don't have dreams." Take John Glenn Jr., who at 77 went back into space. Or Jack McKeon, the 72-year-old coach who was called out of retirement and catapulted the Florida Marlins to a World Series victory.

Q: What is "middlescence," as you put it in your book Age Power?

A: It's the period between your 50s and 70s when you have to find a new identity. While disorienting and confusing, there's tremendous opportunity. Rather than winding down, retirees are reinventing themselves. Rather than wandering off to society's sidelines, they're having fun and embarking on new careers. It's not the end of life but really just the third quarter.

Q: How can business develop a mutually beneficial relationship with the growing ranks of middlescents?

A: There are a lot of similarities between the women's movement and the age of middlesence. In both situations, companies need to design jobs that make it more attractive to stay than to leave. A lot of talent and experience gets shoved out the door. There are also many obstacles in pension and benefits regulation that make it difficult to continue to employ those in middlesence who may prefer more flexible or part-time arrangements. Changes in these policies will be good for business, people, and the economy.

Q: What are the obstacles in pension and benefits regulation that middlescents face?

A: There are several. Pension benefits are keyed to a person's earnings in their final years. Say you're making $80,000 in your last year of work. Your pension would be tied to that salary. If you decided to work part-time and your earnings drop to $50,000, that could damage your pension payout for the rest of your life. What some people do is finish their career out at one firm and get their full pension, then take their life talent, experience, and contacts and begin working at a competitor. ERISA, the Employee Retirement Income Security Act, also creates obstacles. It imposes rules of uniformity in the treatment of employees and their pension benefits. These rules make it hard to make [special] arrangements for those workers that employers want to retain. Finally, we have provisions in place that provide benefits for early retirement. In fact, 80% of the workforce retires before their 65th birthday. So while that isn't an obstacle, offering early retirement is a misguided incentive. That becomes a temptation for many people to cut out early and start receiving wonderful benefits before they're able to afford to or are psychologically ready to retire.

Q: How far along is society in appreciating the talent and contributions of older men and women?

A: I'll divide society into three sections: political; marketing, communication, and advertising; and the workforce. I'll measure them on a scale of 1 to 10, with 10 being the highest appreciation. Politically, I think we're at a 10. We've become a gerontocracy: The old is one group all the politicians are catering to. In the area of marketing, communication, and advertising, I think we're at a 5. The communication industry is still overwhelming oriented toward youth. Ten years ago, it would have been a zero, so we've seen some progress. Finally, the workforce is at a 1. Some 85% of the elderly, as defined by those 65 or older, don't work. Companies are trying to dump older people as quickly as they can. When you look at the advertising for employees -- which routinely seeks high-energy individuals -- it's clear they're looking for young people. Companies must retain or seek to hire the best and brightest near to retirement, or they'll struggle with a talent shortage in years to come.

(http://www.businessweek.com/magazine/content/04_30/b3893428.htm)