Postponing retirement: enjoying work after the age of 65

Many people in Switzerland retire each year. Retired people make up an increasingly large share of the population. At the same time, fewer young people are entering the workforce to replace them. According to forecasts by UBS, the Swiss market will be short of half a million workers by 2030. A solution to the demographically induced shortage of skilled workers could be for more and more people to continue working for longer, even beyond retirement age. The gradual raising of the AHV retirement age to 65 for women also helps here. But are employees willing to work longer in the first place?

40 percent of the 50- to 64-year-olds surveyed in 2019 in a study by Deloitte want to work beyond retirement. A similar picture was found among those who had already retired: 30 percent of them would have continued working if they had had the opportunity. But what is the reality? Only 20 percent of 65- to 74-year-olds in Switzerland are still gainfully employed. That is about 180,000 people. Slightly more than half of them have a workload of less than 50 percent. This is according to an article by Beobachter. The reason given is that the state does not provide enough incentives to continue working.

Older employees bring advantages. Anna Fankhauser, HR manager at B+S Ingenieure und Planer, is convinced of this. The company currently employs ten people who are working past retirement age. "For us, it is very valuable that experience is passed on to younger employees. This is the only way we can ensure that there are enough qualified specialists to fill vacancies." At B+S, every employee can continue working until the age of 70, with a workload that suits them. The model is based on trust and is profitable for both parties.

Anna Fankhauser is against increasing the regular retirement age. She values freedom and flexibility: "People who work voluntarily are highly motivated." She says that it is important for people to feel appreciated. Many people, especially management staff, find retirement difficult. A flexible, step-by-step transition often makes the path to retirement easier.

According to the statistics on new retirees published in 2018 by the Federal Statistical Office, around 54 percent of women between ages 64 and 69 and 61 percent of men between ages 65 and 71 said that they continued working for the pleasure of it. Only 20 percent of those surveyed continue to work after retirement for financial reasons.

Michael Keller* (75) and Werner Althaus (77) are still working. Hans Ulrich Kaufmann worked up until his 70th birthday and was employed on an hourly basis with a 25 percent workload. Michael Keller works for a company full-time as a freelancer. Werner Althaus is self-employed and currently works about 30 percent of a full-time post. We talked to them about the benefits, motivation and incentives to continue working.

What motivates you to continue working?

Hans Ulrich Kaufmann: For me, it was crucial that I could continue to maintain social contacts in the professional world. I valued the exchange with team members and working on exciting technical issues. Part-time work allowed me to gradually transition to my private life and helped me to achieve a good balance between work and family or leisure. 

Michael Keller: If you rest, you rust. It motivates me to perform a job that keeps my mind fresh. My work as a metal trader continues to fascinate me, with all its facets and its broad professional spectrum. It is important to me that I can continue to maintain many contacts. Even today, I am still continuously developing myself through my work, and that's why I don't want to stand still.

Werner Althaus: As a pensioner it's important to structure your day well, and my work supports this. This enables me to stay healthy and gives me a sense of achievement. The transition from full-time work to doing nothing never happened to me. Now I have much more freedom: I can choose my own clients, do work that offers added value to others and remain professionally up to date.

Is it financially worthwhile to work past retirement?

Hans Ulrich Kaufmann: Optimizing my financial situation was not my main focus. I would have been fine financially, even if I hadn't worked beyond the AHV retirement age. At the time, I even had to continue to pay AHV contributions without receiving anything in return. Luckily, this will change from 2024 with the current AHV reforms: With the adoption of the 2021 AHV reforms, contributions made after regular retirement age are now credited up to the maximum pension. I think it makes sense for the government to encourage and reward employment after regular retirement age.

Michael Keller: The fact that I still earn a few francs is certainly an advantage, and it allows me to continue my hobbies such as sports and travel. However, the tax burden is quite high, which I was aware of: I also have to pay tax on my pension. The bottom line is that it's still worth it for me, otherwise I wouldn't be working.

Werner Althaus: I assume that people don't have to continue working for financial reasons, but rather do so voluntarily. For me, financial aspects are not at the forefront. I pay more into AHV than I receive in the form of a pension. But I didn't want to postpone AHV either: if I've already paid it in, I'd like to receive my pension. Tax considerations are not relevant for me when it comes to whether or not I continue working.

Was it easy to find employment beyond retirement age?

Hans Ulrich Kaufmann: I entered early retirement at 60, but I never intended to stop working entirely. I already had a new job in sight and was employed there for a good year. Then I received a request from the Vita Collective Foundation. They needed support in a very specific field, and I was recommended by two former colleagues. So, I didn't actively go out looking, but the offer came at the right time, since the other project was just about finished.

Michael Keller: I worked for another three years beyond regular retirement age: for my employer for whom I had worked for 25 years. Thanks to the large network that I had built up over many years, I received various offers to continue working. My work is very capital-bound due to pre-financing. So, I opted to join a company as a freelancer that could guarantee this pre-financing. I was certainly helped by the fact that I was always interested in technology, research, new developments and industry trends. That's how I acquired broad product and industry knowledge.

Werner Althaus: I got lucky. For 30 years I worked in management positions at two banks. At the age of 55, I had the opportunity to start my own business in the same field: financing companies. At 65, I was involved with various clients, and retirement in the classic sense never happened. In the first few years, I continued with about an 80- to 90-percent workload, and now it's still about 30 percent.

What do your family and friends think about your decision to keep working?

Hans Ulrich Kaufmann: My family and friends found it positive that I continued to pursue a challenging job. But I wasn't the only one in my circle of friends. Several colleagues, most of whom I've known since university, were likewise working beyond regular retirement age, most of them part-time.

Michael Keller: When I was 68 years old and changed direction, my wife said to me that she admired me for continuing to work. That was a great motivational boost for me. My daughter and my son also stand behind me. My wife and I like to make one or two trips a year, which is no problem: I have holidays and as a freelancer I can arrange my schedule flexibly. As far as my friends are concerned, people are free to think whatever they want. And people are also free to do the work that they enjoy.

Werner Althaus: I am in the fortunate position that my wife has a similar attitude and also continues to work. She had little time to develop professionally with our children and is now catching up. So now we can enjoy the end of the workday together, with the freedom of the children being out of the house. The rest of the family supports us and is happy that we still have something to do.

How long do you want to continue working? And what do you think of a general increase of the regular retirement age?

Hans Ulrich Kaufmann: : I worked up until my 70th birthday. For me, that was the right moment to retire. I believe that a general raising of the retirement age is unavoidable in principle, if the pension system is to be stabilized. However, incentives should also be created to actively promote professional activity beyond the regular retirement age and to make it flexible. The government ought to have an interest in not penalizing continued employment.

Michael Keller: I couldn't say right now. What's certain is that I need to continue to enjoy my work, and my health has to allow me to do so. A part-time workload has never been an option, as my job requires full-time presence. A gradual reduction may be an option at a later date at best. The retirement age should definitely be increased, or rather it should be structured in a fluid and individualized way and not fixed at 65.

Werner Althaus: I will continue to work for as long as I feel that I am offering added value to my clients. One reason why I have reduced my workload is the rapid development in my field. Currently, I am working with a 30-percent workload. The retirement age should not be generally increased, but rather made more flexible. People who do hard physical work and are exhausted should be able to retire on time. Everyone should be able to decide for themselves what is right for them.

What tips can you give to someone who wants to continue working after retirement?

Hans Ulrich Kaufmann: It is very important to actively maintain a professional network and to keep your contacts alive. It takes courage to tackle something new and you need to enjoy working with young people. You should also have an interest in new tools and processes and be willing to engage in further training. And what's very important is that you should be open for changes in your personal working environment. It takes willingness to accept your new role. I enjoy being able to concentrate on purely technical issues without, as in the past, having to take on large and burdensome HR responsibilities.

Michael Keller: If you wait until retirement age to get interested in continuing to work, that's far too late. My tip is to be hungry for knowledge, to continue your education throughout your life, to try to keep up with new developments and to read a lot. All that gives you the opportunity to continue to have an interesting job after 65.

Werner Althaus: Self-employed people have an easier time if they want to continue working. The danger is rather delaying the time of transfer for too long. Managers of SMEs in particular often have trouble letting go. If you decide to stop working, it's crucial to think about it early. It's important to be able to continue to pursue meaningful work."

*Name changed

Employers should be aware that there are certainly employees who want to keep working beyond AHV retirement age and who are capable of doing so. Those who choose this path are usually highly motivated and regard work as a personal privilege. So as not to lose this potential, it is important to offer flexible solutions to these employees. After all, demographic change means that it is becoming all the more important to not only attract new talent, but also to continue using the wealth of experience among existing experts and to allow future generations of employees to benefit from it.