Successful businesses usually have a managing director at the helm that has been within the firm many years. Indeed, CEOs and other directors have often worked up within the firm, building up resources and getting the business to where they want it to be. Because of this, at present, the majority of businesses are actually run by ‘Baby Boomers’. However, it is getting to the stage that such ‘Baby Boomers’ are setting themselves up for retirement, and this poses the very important question of who should be taking over the business?
What is “pre-tirement”
Hence the growing trend of “pre-tirement” whereby people may switch to a part-time role with their employer or take up something different. By continuing to earn an income they can supplement their pension or, in many cases, look forward to a more comfortable retirement by deferring it.
Research for the Prudential, the financial services group, has found that for each of the past five years slightly over half of working adults in their mid-forties and older said that they were considering working past their retirement age or were already doing so.
Pre-tirees include John Field, 66, who three years ago gave up his career as a solicitor to become a magician. Previously magic had been a hobby but in pre-tirement he is paid to entertain passengers on cruise ships and teaches magic classes for U3A, which provides talks and classes for retired and semi-retired people.
Business and life after retirement
Mr Field, from Ashtead, Surrey, said: “I have travelled all over the world on cruise ships, having been booked to do magic shows for passengers. I have also set up close-up ‘magic for grandparents’ classes through U3A, and tour the south of the UK giving talks on Houdini and demonstrating tricks.”
Prudential commissioned an online survey by a polling company, Research Plus, of 10,605 non-retired British adults aged 45 and older, including 1,000 planning to retire this year, and found that 51 per cent said they would keep working if this would guarantee them a greater income in retirement.
With the average length of retirement slightly longer than 20 years, 34 per cent of those planning to pre-tire said that they did not feel ready to retire and 26 per cent said they did not like the idea of retiring and being at home all the time for such a long period.
Motivations to retire
For 30 per cent their motivation was to carry on topping up their retirement fund. It found that 20 per cent wanted to earn money from doing a hobby or starting a business, 29 per cent would look for a different job while 28 per cent wanted to shorten their hours with their employer. Only 9 per cent planned to continue full-time in their present job.
Stan Russell, a retirement income expert at Prudential, said retirement was increasingly becoming “more of a process than a single moment in time”.
He said: “A period of pre-tirement, where people choose to delay their retirement plans, change jobs, earn a living from a hobby, or go part-time, has become the new norm for retirees.”
Despite the reluctance to talk about the situation, the concern of such CEOs hanging onto their power is a very real issue in many businesses. It could potentially lead to the downfall of the company and loss of reputation. It falls to those second in command to be bold and brave and encourage the transfer of power before it is too late.