Is 45 too early an age to retire?

Is 45 too early an age to retire?

http://www.dreamstime.com/-image22267441

...a majority of Emiratis don't think so. Though a new survey indicates UAE nationals’ preference for lowering the age to retire, existing psychological studies suggest there is such a thing as retiring too early

October 22, 2012 12:55 by Eva Fernandes

The current economic climate has severely crippled governments’ ability to fulfill the promise of social security and pension funds. Increasing the minimum age of retirement is a tactic employed by Germany, the UK and France to soften the economic blow of an ageing population. Though 60 was the internationally accepted age of retirement, more and more countries are raising that number to 65.

But here in the Emirates, the sentiment towards the issue is very different. Instead of increasing the age of retirement, a new survey has found most Emiratis are in favour of lowering the age for which full access to one’s pension is available. The General Authority for Pensions and Social Security surveyed 3,177 respondents on their website to find out the age Emiratis think is acceptable to retire. Quite shockingly, the survey found 57 percent opted for the age of retirement to be set at 45, with 17 percent selecting 50, 8 percent 55 and 16 percent 60.

The results of the study have proved for good conversation, especially given the state of the international economy. A UAE national and columnist Khalid Al Ameri posted the following comment on Twitter: “The fact that 50% of those polled on the retirement voted for age 45 says a lot about the motivation of public sector employees. In addition for a public sector that has given so much to it’s people, it is only right that Nationals do what they can to give back.”

In addition to the argument of giving back, it is also important to consider the social implications of retiring too early. Though getting out of the daily grind at the age of 45 may seem like a relaxing prospect, research suggests it is could also be a potentially harmful one.

Consider a study published on VOX by Andreas Kuhn, Jean-Philippe Wuellrich and Josef Zweimüller who studied the effect of early retirement on Austrian employees. The study found that early retirement had negative affect on a person’s behaviour, with 32 percent of the ‘causal retirement effect’ being directly related to an increase in smoking and excessive consumption of alcohol.

What is more, the study found that early retirement increased the risk of premature death: “According to our estimates, one additional year of early retirement causes an increase in the risk of premature death of 2.4 percentage points (a relative increase of about 13.4%; or 1.8 months in terms of years of life lost).” Living shorter after early retirement is also the subject of book called Helplessness: On Depression, Development and Death written by Martin Seligman, an expert on the psychology of depression.

An alternative to this argument could be retiring early but keeping active through part-time work or consulting. Studies have found retired people who stay mentally active and engaged post retirement are less likely to have major diseases. According to Professor Cary Cooper, an occupational health psychologist at the University of Lancaster: “All the evidence suggests that if your mental wellbeing is depleted it will affect you physically. Conversely, if you are more positive mentally you are going to be much more robust and active. And if you continue working after retirement often your status remains similar to that you experienced during your career, and as a result your self-esteem and sense of well being will be enhanced.”

Of course all of this speculation is just that, speculation. The National reports an unnamed employee at the pension fund to have said they were “studying the possibility of lowering the age, and wanted to know people’s opinions on the matter.” No decision has been made. Either way, it will be interesting to see how this story develops: from an economic standpoint, it is questionable whether lowering the retirement age is a financially viable and sustainable prospect for the UAE. Of course, it is just as questionable whether having a population that has retired too early will be beneficial for the society at large.