Be steady and well-ordered in your life so that you can be fierce and original in your work.
Gustave Flaubert
This book is about your working life, but ‘work’ and ‘life’ are overlapping parts of one whole (as we saw in Chapter 3), so in this chapter we look at the functions of work and at life arenas that strongly impact work.
Much has been written about the functions of work, the economic, psychological and other benefits we derive from employment. It is often in pretty technical language, and most actual workers would find it hard to recognise themselves in the jargon. The most useful categorisation of the benefits of work that I’ve seen is by Richard P. Johnson, a former president of the American Association for Adult Development and Aging. He founded the Retirement Options consultancy for mature life planning and I came across his work while I was training through Retirement Options to become a certified retirement coach.
Johnson says that there are five benefits (perhaps even needs) that bring us satisfaction through work.1
Financial remuneration
Money is (of course) a key work driver. An income is essential to almost all of us in order to remain independent, create a lifestyle and save for future needs. The fact that it is paid in regular increments also makes money management easier. The need for money drives many people in their 50s and 60s to keep working, and although it’s not always the main reason people delay retirement, the loss of a reliable and regular income can be a major challenge.
Time management/structuring
Being an employee or a business owner gives structure to your days: you are handed (or you create) a schedule that takes you from Monday morning through Friday evening and sometimes into the weekends. I’ve had several clients who are terrified by the thought of the empty, unstructured time that will loom if they stop working. Whether currently employed or not, we need to become more proactive about time management as we age, and find ways to create a schedule that allows us to do the things that are most important to our wellbeing.
Socialisation
This is about having mates to swap weekend stories with, colleagues with whom to work and share ideas and even the development of lifelong friendships. It’s an important reason people keep working, and can be a huge challenge once your working life ends, or if you trade being an employee for a solo business start-up.
Status/identity
Work provides us with a role, a place in the world. It can be critical in developing a sense of identity and a way to explain ourselves to others: when we meet a new person at a party, the ‘What do you do?’ question is often our first attempt to get to know them.
The use of ‘status’ here doesn’t mean high status, it’s more about knowing who we are and where we belong in the world. The loss of this can be very stressful and much has also been written about people who retire and find themselves suffering from ‘relevance deprivation syndrome’.2 The expression was coined by former Australian Foreign Affairs Minister Gareth Evans after his retirement, but affects all sorts of people who give up a busy and useful working identity only to feel suddenly irrelevant in their new life.
Usefulness
The final benefit of work is to provide a sense of usefulness, a purpose to our days. Work is not the only way to derive meaning – my years as a mother have been at least as significant to me as my work – but it is often the simplest way to feel useful, and is certainly the most common. Work becomes our ‘cause’, our contribution to something larger than our immediate world.
Work keeps you in touch with the world, helps you build strengths, develop competencies and use your talents. It grounds your sense of who you are and what you offer. We frequently take the benefits of work for granted until they disappear, leaving us puzzled, sometimes shocked by the void. When we take on a new venture, we generally consider the impact on our financial position, but often that’s all. As you consider the work options in this book, take the time to also reflect through the lens of the five functions of work and think about which of them may be either satisfied or challenged by different choices.
Because of their central importance to work reinvention, we are going to take a closer look now at two of the five – finances and identity.
I am sure I’m not the only person who spent large chunks of their early life deliberately not examining their financial position closely, and avoiding any consideration of the future implications of their current lifestyle. Eventually, I realised that even if you don’t value the accumulation of vast wealth, you must know where you stand, and develop a plan to ensure you can remain independent for as long as possible and can live a life that makes you happy.
Some people find it natural to consider and plan far ahead, to delay gratification now so as to create a better future in years to come. Others are more likely to go for immediate pleasure and like Scarlett O’Hara in Gone with the Wind postpone future planning on the grounds that tomorrow is another day.
However you feel about it, you must take stock of your finances, get some advice and know where you stand.
It’s never too late to seek help, but after 50, your time horizon for earning income becomes compressed. Even if you’re happy to work until 70, or your early 70s, you have about 20 years and so good decisions and not-so-good ones will both be magnified.
I spoke to financial planner Kate McCallum about the most important things to think about at this stage. She talks about organising your finances through the concept of buckets of money. One key bucket is the money saved to support you when you stop working permanently – when you hang up your boots is there sufficient money to provide the income to live the life you’d like to live? ‘It’s very personal and I recommend people build a bottom-up budget for retirement so they say, “This is the life I want to lead, I want to be able to travel and visit friends in Australia or overseas once or twice a year, I want to play golf or go out to dinner with friends.” You cost it and build it up as a budget.’
It can be helpful to think in decades, because say from 65 to 75 you may have a certain type of life you’d like to lead (in my case I am planning for plenty of travel, for example), but in the next decade to 85 you may have a different set of expenses. As McCallum says, ‘You need to put it in a spreadsheet, with all the other things like gifts or health care. Housing and accommodation are important and these days we’re seeing clients who will have a mortgage as they near 50 or 60. Is that something you want to repay or are you comfortable with a certain level of debt? There’s no right answer, it’s very personal.’
McCallum had a client who went through a really nasty divorce. ‘She’s in her early 60s and was able to afford a property in a place where she enjoys living, and we’ve worked out what she needs in terms of the retirement bucket. Her three children are her world and they all live overseas. So she travels to see them every year because you don’t get this time back. The trade-off is she’s quite happy that she’ll work until she’s 70. She budgets really tightly, and she doesn’t get to buy everything she wants, but it’s about asking, “What do you value most and how do we make sure that’s where you spend the money, not on things that you don’t truly value?”’
If you are reinventing your work at 50 plus, you need to be very clear about which buckets or areas of life are important to you and how much money you need to have saved or coming in as income while you make your transition. Having this clarity lifts the weight off your shoulders and frees you up to make decisions.
Even if the news is challenging, and sometimes it will be, the fact that you know and can make conscious decisions about it is itself liberating.
McCallum has a good suggestion for people who have had regular predictable income every fortnight or month and face a big challenge around managing cash flow when they no longer have this regular income stream. She suggests that you will feel a lot more in control if you actually draw an income stream as though it was a salary. You would do a bottom-up budget, work out what you need to cover expenses so you’re not worrying, and that’s the amount that you pay yourself to replicate that sense of an income stream.
McCallum also sees many people who are planning a career shift and don’t have regular income because they are looking for a new employment role or building a business. She says this can cause emotional stress because you’re relying on savings, or a redundancy or an existing buffer, and that means you’re drawing on your capital, which can feel uncomfortable. Her advice is to be very clear about what you need to spend, and to know your overall position so you understand the implications of your decisions.
On the other side, she also sees people being more frugal than they need to be and not giving themselves permission to do something that’s exciting. As she says, ‘I look at people who have made really good decisions for everybody else in their life, particularly their children. They’re not thinking about what they really want and often your 50s and 60s is a fabulous time to do that. So if you’ve got sufficient assets and income, why hold back?’
Kate McCallum’s tips
1. Prepare for left field
You can have the best plans and then something comes from left field like a health issue. You have to consciously think about those ‘what if’ scenarios so that they don’t completely blindside you. Make sure you have assets you can access easily if you can’t continue working or somebody needs lump-sum funds to help with medical treatment, or you suddenly need to go to a child overseas.
2. Insurance
People working in larger firms may have insurance such as income protection, life insurance, total and permanent disability, and trauma or critical illness. I strongly recommend in any career change that you reassess insurances, and think about what you need.
3. Superannuation
We often see people paying total fees of 2 per cent on their superannuation, when you should be paying around about 0.8 per cent, at most 1 per cent. That’s just money out of your returns. Above 1 per cent? There will be a fund out there that will give you a better deal.
We also see people overexposed to risky assets, when in your 50s you may not want to be. Make a conscious decision about this – and don’t just look at the name of the fund because a balanced fund could have 70 per cent in equity-like assets and 30 per cent in defensive assets, or it could have 50:50, which is what I consider balanced. Shares or equities and listed property make up growth assets; defensive, non-risky assets are fixed interest or bonds and cash. People are often surprised at how far a 70:30 balanced portfolio can fall in a downturn like the financial crisis. It can be a 30 per cent drop in your portfolio and if you’re 50 that makes a very big difference in the quality of lifestyle you’re going to have.
4. Get clear on your priorities
The first question we ask is, ‘What’s most important to you when it comes to money?’ and then we ask about your goals. They can be professional goals, whatever you want to do with your career shift; they’re personal goals; they can be goals about key people who are important to you – children, parents, close friends; and then for many of us there’s a contribution we want to make to community. The only job of financial planning is to enable you to achieve all of those things.
5. Have a plan
Analyse your current situation, work out where you want to be, understand the gaps, and develop a logical step-by-step approach to give you the best chance of getting from where you are to where you want to be.
6. Couples
Have the conversation. There’s the rational side, which is about money decisions, and there’s the emotional side, which is about values and what’s most important to you. Once you understand each person’s core values you’ll make better financial decisions. I’m not saying that there’s no compromise, but once you’ve had the discussion you can see why it’s so valuable to the other person to have that experience or that outcome, and you somehow find a place where it works for both of you.
7. Think about risk
In your 20s or 30s there’s less to lose so you may make riskier decisions, whereas in your 50s I think you’re always very careful not to undermine what you’ve already established and built up. It’s really about thinking about how comfortable you are to take risks and then evaluating all your decisions in the context of your goals and your comfort zone because, at the end of the day, we’re all different.
8. Be prepared to challenge the norms
There’s a lot of ‘should dos’ out there and I think you must ask yourself, ‘What’s right for me in my situation’? There’ll always be naysayers saying, ‘Oh no, it’s too risky, don’t start a new business, don’t make a career change, it’s too risky, you can’t’ or ‘You have to repay the debt on the home, you have to do this and you have to do that.’ Get rid of ‘have to’ and ‘should’ and build a very, very personal plan.
The next two stories are both about working with your finances at a time of change in your life, but from the perspective of people with quite different life stories and circumstances.
Andy, 56
Andy spent time in advance to create a solid strategy for his 50s and beyond, getting advice but also researching for himself and tailoring a very personal and satisfying plan.
Age 52 was my target, which was when the youngest was due to leave high school, and I thought it would be good to stop work, take some time off completely and then look to perhaps work part-time and do bits and pieces through to age 75-ish.
The idea was to buy something smaller in the Southern Highlands, work on the house to allow us to holiday let it to bring in a bit of money and then I would continue to do basic consulting. I liked that idea. That meant I actually had to do something with my finances that will enable it. Essentially, it meant not consuming and spending as much money at this end of the scale because you want to spend it at the other end of the scale.
We talked about it for a while and then we got our financial planner to validate that I wasn’t making some stupid assumptions, and he said, ‘You can do it.’ So we decided to go ahead. The kids had both finished school, so we told them we were moving and they both decided to follow us, which damn …
The proceeds from the sale of the house mean that I don’t have to work and earn as much money as I have had to in the past, so that has helped. I see myself as an apprentice retiree.
Our plan is not well-supported by the financial system because the financial system is still based on the model where you can’t access your super until later. And I have a reluctance to put all of my retirement savings in the hands of the government so they can change the rules whenever they feel like it, so I’ve had some going in to super and some as a separate fund that I can use when I feel like it.
I have a fear that it’s more difficult, and it may become even more difficult the older I am, to actually earn an income if I need to. If I’d done this at 35, then getting back into the workforce and being able to command a decent salary would be easy. I see that it’s more difficult now at 56 and it will be more difficult later on.
The pot becomes sort of finite and it’s harder to top it up. I have a sum of money that has got to last me from here to here and if I’ve got a leak in it somewhere I may not be able to plug the leak and then top it up.
I remember the first financial planner I had asked me, ‘What are your ambitions and goals?’ and I said, ‘To die poor. On the final day I intend to spend my final dollar.’ So we look at the house as being part of our retirement fund to pay for aged care and that sort of stuff.
I was at an international company in England in the 1990s when they started making very attractive redundancies. There was a guy who’d been there for 24 years and was not enjoying his work at all, and I said, ‘You haven’t taken the payout, what are you doing?’ He had a picture on his pinboard of a fourteenth-century coach house in the hills and he said, ‘I can’t afford to because we’ve got this property and we need the income.’
What I then saw was I wanted the financial flexibility to do whatever I wanted to do at that time. And it could have been carry on working or it could be change, but I wanted that degree of flexibility. That’s part of the, ‘Why do I want a huge house with a massive mortgage? Why do I want a luxury car?’
Pauline, 62
Pauline’s story is an inspiring example of someone who has had a tough life in many ways and avoided thinking about her financial future until recently. She has still been able to make decisions that will allow her to manage in her 60s and beyond, negotiating flexible work arrangements, finding a place she can afford outside Sydney and creating a solid plan for earning an income during the years ahead.
I’ve never been dedicated to a career. I always wanted to have a large family, and work was always incidental to that. After I had my first child, work was just not really a thing. I had a few little forays into work, but they didn’t really work out and I’d stay home and have more babies.
When I started full-time work as an editor with a publishing firm I had four children. Then I had another baby, later my marriage broke up and I had three of the children with me. One of the banks lent me $5000, which was enough to buy some stuff and rent a unit.
I worked at home three days a week for years in that job and then I took on a bigger role and I worked in the office three days a week, at home two. When my ex-husband left Australia, I ended up having all five children so working from home made a big difference.
I was pretty hard up; my ex-husband paid maintenance, but that wasn’t a great deal. I got family payments so we managed; we lived very frugally. Then my mother gave me $50,000 so I could have a deposit and I bought a modest two-bedroom unit, where I live now. I still had two children at home, so my daughter had a bedroom and my son had to sleep in the dining room.
I put my head in the sand about the future. I used to laugh and say, ‘Oh, John Howard says we have to work till we’re 70, I suppose I will.’ And then when I turned 60 I got a letter from my superannuation fund saying, ‘Now you’ve turned 60, we’ve got to start thinking about retirement’ and I was so upset.
After that, I started thinking about the future, I started evaluating everything. I didn’t think I could afford to live in Sydney when I retire, so I decided I will move to the south coast.
I think working is important, but after I had this wakeup call I was thinking, ‘I can’t work in the office five days a week till I am 66 when I get the pension.’ I found some information about applying to work flexibly under the Fair Work Act, which says that for various categories of workers, the employer should accommodate them unless there is a business reason for refusal. I applied to my employer to work flexibly and although it was a bit of a process, I was given two days working from home. It was terrific.
Even when I retire, I want to still continue doing freelance proofreading and editing. I’m also thinking of doing some advising to authors, just offering advice and explaining what things mean. I think if you can still contribute and earn money and do things you like when you get to a certain age, why not?
Identity is another of the five functions of work, and as we live for longer, it becomes more important than ever to be able to play with our sense of identity, our sense of who we are in our private and public worlds. There are threads of identity that stay with us forever, no matter how life changes. These give us our sense of ‘I’ and allow us to find connection between all the parts of our lives day to day, as well as over time. However, we also need to be able to reshape parts of our identity, explore new sides of ourselves and become more flexible if we’re going to navigate this changing world. We need to take charge of ourselves, develop a sense of being in charge, so as to make the most of new and different opportunities.
In The 100-Year Life,3 Lynda Gratton and Andrew Scott stress that as our lives become longer, we need to be able to experiment with ourselves, to create a multi-stage life that works for us. As traditional age and stage-of-life models break down, we need to be able to make our own choices in a world with many more possible futures – and possible future identities. It can have remarkable benefits and it doesn’t have to be an enormous challenge: a simple change of perspective can alter everything, as I discovered on a research trip to the United States in 2014.
I met with a New York clergyman, who ran a soup kitchen for homeless people. It was a pretty standard set-up – they came in every day, stood in line and had their meal served to them by volunteers who also did the cooking and cleaning up. And the people would eat their meal and they would go.
This clergyman became interested in ‘asset-based community development’, an approach where you look at what a person can offer, irrespective of their past work history or circumstances, so he sat down with each visitor and asked, ‘What are the gifts that you have?’ And in doing that he found some people who could cook, even if not professionally. And he found others who played a musical instrument, so he said to them, ‘Okay, you’re now the band. So we’ll get you instruments, you’re gonna play music during lunch when everybody else is coming in’, which they did.
Then there were people who used to be on the receiving end of the line who were now cooking or serving the visitors. After a while he found they didn’t need the volunteers to do that alone, they had these people who had taken over their own process. As he said to me, ‘And so you could give people names like, you know, not “John the homeless guy who came to the soup kitchen every day” but he was “John the cook” now or “Joe the musician” or whatever. In this way, you can help remove people from “I was an office worker and now I am unemployed”. It gives people an identity and a sense of purpose.’
So, whatever your circumstances, you can reshape and reclaim your identity.
I spoke to counsellor and psychotherapist Alex Roberts on how to work with identity in times of change. She says that most people are identified by their work, at least to some degree, so if that changes suddenly you can ‘flail about and land in your dressing gown for a few days’. If you are the type who likes to have a routine, then it is important to create a new schedule for yourself by finding things you like to do and making diary appointments with yourself to do them. Even if it’s a gym class or a coffee with a friend, this creates a structure to your day which is enormously reassuring.
Roberts also makes the important point that we can absolutely create a new sense of identity, ‘but if you’re changing a career, first there is very much a grief process. Even if it was your idea to give up that career, you’re still going to grieve. But if we can work through the anger and perhaps depression about what’s gone, we can rise like the phoenix from that, with a new identity.’ As a serial reinventor, I particularly like this idea of the phoenix.
A new identity takes work, though. Roberts believes we have a choice; that we can choose to have a positive reaction or a negative one: if life throws you lemons, make lemonade. She says that ‘so many people live a fantasy world where they believe that they should still be able to do this and still be able to do that, but the reality is that you can’t anymore. It’s about acceptance. We all have a tendency to not want to acknowledge reality if it’s not a positive reality. But if you’re looking for a job and you’re 60, you have to be realistic that it may be harder to get a position and not to let that deter you.’
It can be a real problem if you don’t accept the reality and instead chase unreachable dreams. Both Roberts and I believe that dreams are critical, but they must be tempered by reality and approached with flexibility. Perhaps you can’t be the CEO in your next job, but that may be a good thing – if you want to work and you are enjoying what you’re doing, does it matter if you’re not earning as much? Perhaps it’ll be a more interesting experience. You may want to do something entirely different to what you did before and you need to reflect on what it is really that you’re looking for.
‘If someone’s made redundant, for instance, they have a choice: to stay in that hole or to decide to do something different,’ says Roberts. ‘You either go down a spiral where you go lower and lower or you say, “Okay, this is an opportunity. What can I do? What do I like doing? I’ve got opportunities now that I couldn’t have done 20 years ago because I was paying off my home”, or “I had my family then, I had to consider them.” Now I’ve got a choice that I can do things a bit differently. I might have been a CEO, but I could become a dance instructor if that’s what I want to do now.’
Roberts tells the story of a client who was a high-flyer in IT, very good at what they did, but when it came to dealing with people they didn’t have a clue. The client came to Roberts when they were made redundant and needed to get another job. ‘Their confidence had gone down, so they came to see me as a psychotherapist to unravel what was happening. Once they’d done that, they realised that they didn’t actually want to be in that kind of job anymore, they wanted to do something totally different, and it changed their life. And I don’t mean just the job, it changed their identity, who they were and how they thought and how they performed and how they related to people.’
This ‘unravelling’ process can be painful, but it is critical if you want to learn from the experience and then move forward with a fresh identity and sense of possibility. You have to realise, as Roberts says, ‘that anything that’s gone in the past is actually gone. You cannot change it. As much as you would like to, you really can’t, so put your past on the shelf. Use it for experience, but don’t let it define who you are now.’
Elaine, 62
Elaine thought she had an identity that would carry her through her working life, but realised at 49 that she needed to take time to reflect and rediscover who she wanted to be in her 50s and beyond. It has not always been easy or straightforward, but she has re-crafted her story to take her in new and exciting directions.
I’d been working as a banker when I finished a job at age 49, with nothing to go to. I was in Singapore giving a keynote address and it was the last thing I did in that job, so when I went to the airport to come home to Australia, I was officially unemployed. It was the first time since I was 17 that I didn’t have a job.
I was sitting in business class, in a suit, and the executive next to me told me everything about what he did. Then he said, ‘What do you do?’ and I looked at him and I said, ‘I don’t know.’ I watched him flinch, actually pull back from me and I suddenly thought, ‘My God, there’s no room to even ask me questions if I don’t have an identity or a title or a card.’ He didn’t know where to put me. And then I realised that I didn’t know where to put me. I felt really ashamed because it was like, you should know what you do. That was implicit in his reaction, if you don’t know then you must be mad.
Back home, I went to a transition consultant at an outplacement service, and that was the most demoralising and demeaning experience of my life because she handed me a book and said, ‘Work through this’ as though I was a child. And I remember sitting in this soulless room with all these men walking around looking dazed and lost and confused, thinking, ‘I have got no idea who I am or what I’m doing.’
Because I’ve always been so rational and analytical, I didn’t expect that emotion would come and get me and I didn’t know what to do, I didn’t have any way of dealing with it. I lost my visible cloak in a way, I just didn’t know who I was anymore. I wasn’t able to come up with a strategy. Given I was an internationally known strategist it was kind of ironic, but when it came to me I was completely frozen.
Finally, I decided to set up my own business because I didn’t see any other option. At first it was tough because I had no idea where to start and I missed having people around. I would do three or four months with a client and then move to the next one. Then somebody asked me to help them set up a new business as CEO so I did that for two years and absolutely loved it. Then I went back to consulting, but of course I had to build it all up again.
I think I didn’t have resilience, which surprises me. I had lost the way in my own story. I had always been the youngest at whatever I did in my career and suddenly I felt I was the oldest, in a culture where being an older woman was not at all valued.
Over time, with a lot of reflection and finding good people to talk it over with, I found my place and re-crafted the story around what I was doing. It’s an ongoing process. Jane Fonda talks about her third age from 60 on and that you need to understand and learn from the first two. That’s been very powerful because I’ve come to realise that everything I’ve done has purpose and now it’s just a matter of pulling it together and using it in a constructive way. So it’s a big shift.
I’ve read every book on finding your purpose, looking for somebody to come and tell me. Now I’ve actually realised that you have to find it yourself. If you have purpose, you don’t have time for shame because you get excited and passionate and you have an identity in that. But I still find myself at meetings and things slipping back into the known and comfortable. And yet I know that therein lies danger, that’s not the way.
The conversation has definitely changed in Australia. We see older women in positions of power now more and more, and it is seen as having gravitas. There are role models, there’s discussion, the whole landscape’s changed. I want to be one of those role models. I plan to be working into my 90s if I’m compos mentis.
I’m peeking out from that corporate wall, I’m jumping out from time to time, but when I can walk out and stand in front of it then I’ll know I’m home.
Exercise: Money and more
How much do you understand about your financial position now? And what it might be in 5, 10, 20 years? Who do you need to talk to about this – your partner, a financial planner, your children?
How much does your work define who you are? What else makes up your identity now? If someone asked you, ‘Who are you?’ what would you say? How might this change in your next stage?
What else do you need to think about now, so that your work reinvention is as successful as it can be? Think about these elements of your life:
• Health
• Leisure
• Relationships – family and friends
• Self-development
• Community or spiritual life
• Legacy.
Think about the five benefits of work:
• Financial remuneration
• Time management
• Socialisation
• Status/identity
• Utility/usefulness.
Which of these are most important to you now? What about in the future? How do you currently get what you need from work, and how will you shape this in years to come?