You have completed 58, or whatever, and have handed in your lunch pail. The farewell party is over. The company pension plan is in fine shape. Your Personal Pension Plan is also ticking along. You have your own house and other savings are adequate. Suddenly, the company comes back to you with an offer: would you sign on for two more years as a consultant.

The wife won’t be amused. She’s been examining brochures of cruise liners. Penguins beckon, or it may be the Eiffel Tower. And there is your son in San Jose calling you down to meet your new granddaughter. This is what you have been waiting for. So do you postpone your dreams by another two years?

There is really no debate. Put the granddaughter on hold: she wouldn’t remember it. (It’s more babysitting duty anyway.) Put the wife on Rewind; she’s used to it. She realised early on in married life that she had as much chance of seeing the penguin in its natural habitat as she had of seeing the Passenger Pigeon.

But why, when you are set for retirement, should you consider the extension option? First, because it’s in vogue. “Punjab move to extend retirement age to benefit 30,000 employees,” says The Indian Express. This is an en masse resolution and helps companies that have not done succession planning. It is not just the top boss who needs to have an inheritor in place. “(Sindhushree) Khullar gets extension as Planning Commission secretary,” says the New Indian Express. That’s more particular.

The bottomline is a realisation that you are no longer senile at 60; 62 is fine, perhaps even 65. For the really big bosses, 75 is great; they continue as combines of King Cophetua and King George III.

From the company’s point of view, giving extensions makes sense — more for the individual, than across the board. There is much knowledge — the way of doing things, the reaction to certain constituencies — that the new corporate generation needs to learn. It is a problem with large companies — particularly PSUs. They retire in large numbers depending on their year of joining. For instance, the State Bank of India (SBI) is filling 20,000 vacancies this year. Such lumpy recruitment means that there will be lumpy retirement too.

Getting back to the subject of extensions, if you are offered one, grab it with both hands (and a leg for good measure). Just look at what’s happening in the US. Many retirees are coming to India because the costs are lower here. They find themselves in a good situation (though it is not all strawberries and cream). For Indians, such retirement options have a problem. India is a low-cost country, but it is also a low-earning country. What the average American can afford, even the upper middle-class Indian may not be able to.

“It’s a difficult situation,” says Mumbai-based HR consultant D. Singh. “We are in the transition period from a joint family system to a nuclear family system. Support systems are changing. The only way out is for the young to start planning early. But my experience is that very few do. Far less than going for pension plans, they don’t seem to have any inclination to take insurance cover. The attitude is that lightning might strike the other guy, but it will never hit me.”

But when you reach the other end of the spectrum, there is likely to have been a change in mindset. You cannot continue forever unless you set up shop as a consultant. Of course, if you are running your own business, there is no one to tell you when to retire. Doctors and journalists too seem to carry on well past the three score and ten. For the rest (forget the CEO and top brass who are taken care of) an extension is a gift from the Gods. Buy the wife something from Tanishq: she will also think it’s manna from heaven.

RETIREMENT BLUES

The top risks to your retirement plan

Longevity: You felt 85 was a ripe, old age; did you cater for 105?

Inflation: Your buck starts going a much smaller distance. Remember when a Coke was 25 paise?

Interest rate: This is more a pre-retirement issue. What do you do when interest rates are low, as in the US right now? How many times can you rejig your FDs (fixed deposits)?

Stock market: The obvious ups and downs. But only the market will give you a higher return.

Business risk: Lots of bad stuff can happen to retirement funds. Employers who offer defined-benefit plans can declare bankruptcy. Insurers who sell annuities can become insolvent. The list goes on.

Plus a few more risks

Changes in public policy

Unexpected healthcare needs and costs

Lack of available facilities or caregivers

Loss of ability to live independently

Change in housing needs

Death of a spouse

Unforeseen needs of family members

Bad advice, fraud or theft

Source: Adapted from MarketWatch,
The Wall Street Journal