Motives behind early retirement and working beyond retirement

Despite the fact that the age limit for retirement is increasing in the Czech Republic, only a quarter of Czechs plan to work to the age of 65 years, and the majority wish to have stopped working when they reach retirement age. The main reasons keeping people at work even after they reach retirement age is the need to earn more money and to maintain their lifestyle. Meanwhile, those who lose their jobs and cannot find another position are most likely to take early retirement.

In the Czech Republic, the statutory retirement age has been increased progressively up to 62 years. However, current political debate considers that raising the retirement age to 65 years is an inevitable step. Taking into account these changes, it is interesting to see how many people today are willing to stay at work at the age of 65 years and, conversely, what the main reasons are for leaving a job at pre-retirement age. In 2005, the Research Institute for Labour and Social Affairs (Výzkumný ústav práce a sociálních věcí, RILSA) and the market research company Markent carried out an extensive quantitative survey entitled Employment of older people, encompassing 1,679 respondents, to try to capture the attitudes of the Czech population to working when they are older.

Attitudes to working when older

The majority of Czech people do not plan to work when they are 65 years and older. If people could influence the future (or the past if the respondents were more than 65 years old), only 24% of them would aim to be working at 65 years of age. Employed respondents chose the latter possibility more often than those who were unemployed or economically inactive. More university graduates, as well as those surveyed in bigger cities, plan to work at the age of 65 years than people with a lower educational level and those living in a city with fewer than 100,000 inhabitants.

When asked about the ideal plan for the future when they are older, 63% of respondents cited ‘being in full retirement’ as the preferred situation. However, only half of the respondents, at 51%, believed that this option would in fact materialise. Being a pensioner while also working was the preferred option of almost a third (30%) of respondents, whereas only 7% wished to work without a pension even when older. Overall, if people could choose their situation when older, they would work to a lesser extent than what they expect will be the reality.

Table 1: Life when older – expectations versus reality (%)
This table shows that 63% of people would prefer to fully retire when they are older; however, only 51% believe that this will really be possible. Meanwhile, 40% believe that they will combine receiving a pension with work, and 9% believe that they will continue to work without a pension.

Q1: ‘If you could influence your situation entirely, what would be the ideal plan for your life when older?’ Q2: ‘And which possibility is most likely to happen in your case?’
Way of life when older	Q1	Q2
Be fully retired	63	51
Collect old-age pension while working for a wage or as a volunteer	30	40
Continue with my job or start a new career somewhere else, not as a pensioner	7	9

Source: Markent and RILSA, 2005

Reasons for working when older

Economic reasons represent the main motives for remaining in the job market even after reaching retirement age. Among the main reasons for working beyond retirement age, some 98% of respondents definitely or somewhat agreed that ‘They want to make more money’, while 94% considered that ‘They want to maintain their standard of living’. More than four fifths of respondents conceded that social motives might be a reason for remaining in the job market, such as the need to be useful or to maintain contact with people.

On the other hand, only about half of those questioned considered ‘It is necessary to train their successor’ or ‘They feel that they are irreplaceable’ as reasons why workers at retirement age remain at work.

Main reasons for remaining in the job market even after reaching retirement age (%)

Note: Some of the data in the graphs may add up to more than 100% due to rounding of figures.

Source: Markent and RILSA, 2005

Reasons for early retirement

According to the survey respondents, the reason for early retirement among workers is more often the employers’ lack of interest in people belonging to older age groups than the workers’ lack of desire to work, lack of flexibility, or inability to learn new skills. For the majority of those surveyed (over 90%), the most important reason for taking early retirement is due to a person at pre-retirement age losing his or her job and not being able to find another one, either because of being made redundant or the inability to find suitable work. Similar proportions of respondents cited general tiredness, exhaustion from work or health problems as further significant reasons for choosing early retirement, although to a lesser extent than losing a job.

A relatively low but still significant share of respondents believed that early retirement was caused by bad relations with younger co-workers (31%) or the inability to continue to be of use in the job (28%).

Main reasons for early retirement (%)

Source: Markent and RILSA, 2005

Education and work when older

The higher a person’s educational level is, the greater the possibility that he or she will be economically active even when older and will plan to work until the age of 65 years. Moreover, the positive attitude of qualified people to work when older is supported by the increasing interest of employers in older specialists with a university or secondary school education in order to alleviate the current labour shortage. Employers try to retain such workers or entice them back into employment.

Conversely, persons with a lower educational level often leave the labour market early. Their low level of education is often combined with other negative factors in relation to employment, such as an unwillingness to be further educated, a lack of new technology skills, insufficient language and computer skills, health problems and the burden of stereotype. Their low level of employability and the resulting early retirement are underlined by less willingness to work at all when older.

Reference

Remr, J. and Kotíková, J., Podpora zaměstnávání starších osob [Employment of older people], Prague, Markent and RILSA, 2007.

Hana Doleželová, Research Institute of Labour and Social Affairs (RILSA)