Retirement and the silver economy

Societies are experiencing a problem upon retirement. People feel stripped of their meaning and purpose, which is often strongly connected to their career. This feeling of emptiness is provoked not only by the fact that someone lost his/her job, but by the fear of losing friends and a place in society.  A study published in the Journal of Population Ageing found that retired people were about twice as likely to report symptoms of depression than those who are still working.

During the last century, Austria, especially Vienna, brought forward enormous advances and findings on what motivates and drives human beings. The first two trends of the so-called “Viennese school” were developed by Sigmund Freud and Alfred Adler.

According to Sigmund Freud, the father of psychotherapy and psychoanalysis, people are driven by pleasure, namely sexual pleasure. Alfred Adler, a contemporary of Sigmund Freud and the founder of individual development psychology, developed a concurrent line of thought which considers man is driven mainly by power and/or the desire of superiority. In Adler’s opinion, future aspirations, and the construction of a self-ideal man, plays a vital role in our desire to live.

However, and immediately after the second world war, Viktor Frankl, a psychologist, and neuroscientist, who survived concentration camps, developed a new way of thought known as “the third Viennese school of psychotherapy”. According to Frankl, based on his experience and time spent at concentration camps, man is driven by meaning. In fact, and based on his book “Man search for meaning” (listed among the 8 books for Humanity in the Era of AI), man needs a reason to live. This line of thought is the basis of logotherapy, which is a technique to help patients identify the meaning of their lives as an escape to depression and/ or suicidal tendencies.

In line with Frankl’s approach, and my personal experience as a son witnessing the retirement process of his father, it seems that a lot of us lose the sense of meaning/purpose when retirement is experienced. Mitch Anthony, the author of The New Retirementality, says that this loss of meaning lies behind the retirement model that somehow labels a person based on their age. Additionally, and according to the same author, “It doesn’t matter how much money you have in retirement, it doesn’t give you purpose”.

Phased retirement

There is some evidence that a phased retirement could help with this transitional period. According to research published in the Journal of Occupational Health Psychology, people that choose phased retirement report fewer health problems and overall increased mental health when compared to those who retired abruptly.

Phased retirement was accepted and implemented to different extents and with differing approaches, across seventeen countries including Canada, Germany, Sweden, and the United Kingdom with successful results. Its implementation includes reducing progressively the workload of employees, extracting most of their knowledge (mentor approach). This mentality allows both the company and the employee to adapt to a new reality progressively.

Western societies have been experiencing unprecedented demographic challenges, as demographic pyramids are being transformed into “solid squares”. This approach could also be an opportunity to improve the already stressed western national pension systems.

A phased retirement approach can be easily implemented and benefits companies and employees alike, giving the latter the chance to gradually adopt new hobbies and lifestyle. A good example of this approach was developed by a Portuguese energy company that created a university in which classes are taught by employees who will retire soon. It is a simple and easy measure to implement.

Community programs

The involvement of retired people in society is not only the State’s responsibility but also a shared responsibility of the whole society given it improves the mental and socio-economic health of seniors. As such, local communities must develop programs that create a sense of purpose and care. Everyone likes belonging to something, and elderly people are not an exception.

Recently, a Portuguese municipality near Lisbon implemented an extremely well-thought measure. For those willing to, this municipality pays a symbolic amount of money to retired people to patrol the area, working alongside police forces. This simple measure has a strong social character. It increases the involvement of retired people in their communities, helping these individuals connect and feel like they provide added value. These programs could be scaled up to include artistic work or children support and/or care.

Communities play a vital role in the mental and socio-economic health of older generations. These programs are essential to keeping this important part of society occupied, and above all, with the feeling of purpose.

Connection instead of isolation

The Covid-19 pandemic has shown that technology can help reduce isolation by keeping people connected even when there is physical distance. It is fundamental to take advantage of technology for retired people in an effective matter. As an example, mental monitoring programs could be set up at a low cost, and isolation tracking systems could be put into place to avoid and prevent extreme situations. There is a lot to be done in this field since there have only been a few “senior universities” launched.

Keeping people connected in articulation with organizations of the social sector must be a priority. Technology helps to reduce the costs involved in launching this type of infrastructure and in maximizing impact, even with scarce resources.

Last but not least, there is no doubt that depression is becoming increasingly common in western societies, especially close to retirement. Today, and in disagreement with previous theories, we know that the loss of meaning is the root of feelings characterizing depression. However, this meaning, or purpose, can be regained. Phased retirement, community programs and emphasizing social connectedness can help solve one of the biggest societal issues associated with aging.

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