Older workers’ attitudes towards working after retirement

A survey conducted in 2006 by the independent Sofia Consulting Group highlighted the factors influencing the decision of workers aged between 50 and 65 years to retire or continue working. The survey reveals that 45% of the respondents are willing to work, compared with 39% who prefer early retirement. About two thirds of the respondents stated that they intend to continue working after retirement.

Commissioned by the National Social Security Institute (Национален Осигурителен Институт, NSSI), the national representative survey on Factors for introducing flexible retirement forms and encouraging the employment of older people (in Bulgarian, 186Kb PPT) is the first of its kind to examine the factors influencing the decision of workers aged between 50 and 65 years in terms of retirement. The survey was carried out by the independent consultancy Sofia Consulting Group in 2006.

Survey methodology

The population sample includes a total of 1,992 people aged 50 to 65 years, of whom 1,798 interviewees are of pre-retirement age and 194 are close to pension age; men represent 51.6% of the sample and the remaining 48.4% are women. The breakdown by status of economic activity shows that 80.2% of interviewees of pre-retirement age and 69.1% of those at retirement age work under an employment contract. At the same time, self-employed workers represent 6.6% of those at pre-retirement age, while 2.1% of workers at retirement age are in this category. The remaining respondents are either unemployed or pensioners.

Survey findings

Right to work after retirement

The interviewees were asked whether pensioners should be entitled to employment, and most of the respondents – that is, 75.2% – responded positively to this question. The main reasons for such strong support for allowing pensioners to work relate to the fact that wages are considerably higher than pensions and that longer employment enables workers to increase their pension. Nevertheless, 12.2% of the respondents stated that some kind of limitations should exist when it comes to working after retirement.

Strong support for lower statutory retirement age

In line with the pension reform initiated in 2000 (BG0308101F), the statutory retirement age will gradually increase to reach 60 years for women and 63 years for men in 2009. Despite these changes, 74.4% of respondents of pre-retirement age and 60.8% of those at retirement age still tend to support a lower statutory retirement age. Half of both the male and female respondents believe that men should retire at the age of 60 years and women at 55 years of age, as was the case before the reform. Only 13% of men and 16% of women consider the recent change in the statutory retirement age as appropriate.

Attitudes towards early retirement

Persons aged up to 65 years are more willing to remain in employment than to leave the labour market earlier: 45% of this age group are prepared to stay at work, while 39% hope to take early retirement. The most common reasons for the former preference pertain to the feeling of being able to work, reported by 35% of the sample, and fears of a decreased income after retirement, cited by 31% of respondents. Meanwhile, the people willing to retire earlier indicated that they have health problems.

Some 41% of those at retirement age support the possibility of early retirement with lower pension payments, as do 34% of people at pre-retirement age, since the pension represents a secure income. However, 62% of respondents firmly rejected this option for themselves.

Willingness to work until retirement age

As the survey data show, about two thirds of people who retired early intend to live as pensioners. The remaining third of early retirees are willing to continue working. Two different strategies emerge among retirees in this respect: either working under an employment contract, which was suggested by 16% of this group, or seeking to have additional earnings, cited by 52% (see Figure). The survey’s authors expressed the concern that those seeking additional earnings might turn to the informal economy for supplementing their low pension benefits with income from unregistered employment.

Labour market participation of early retirees (%)

Source: Sofia Consulting Group, 2006

Reasons to postpone retirement

Workers’ willingness to work until retirement age may have different motivations, most notably:

• economic needs as their income will decrease when retiring;

• labour-related motives – some workers may be willing to continue their professional activity;

• personal reasons related to professional achievement and job satisfaction.

Respondents of both pre-retirement and retirement age ranked the labour motive in first place. Respondents of pre-retirement age cited economic reasons in second place, while those of retirement age mainly indicated personal reasons for their motivation to continue working.

Labour market participation after statutory retirement age

Most of the respondents, namely 71%, intend to retire when reaching the statutory retirement age, while 22% indicated that they have not yet decided on this matter. Only 7% of workers do not intend to retire. Some 31% of respondents of pre-retirement age and 37% of those at retirement age are willing to participate in employment programmes – including vocational training and other measures enhancing employability – provided by the National Employment Agency (Агенцията По Заетостта**)**. However, the remaining respondents, corresponding to approximately two thirds of each group, have not considered this option.

Nadezhda Daskalova, Institute for Social and Trade Union Research