Damien Grant: Self-employed safest at work

Retirement accelerates mental decline and is associated with depression, ill health and early death. Photo / Thinkstock

Opinion

When you are asked: "what do you do?", you are really being asked: "what are you?" That's why the answer is likely to be "I am a teacher" and not "I teach".

If you reply that you are retired, the real answer is that you are nothing. You play no part in commercial life and hold no interest to those still on the treadmill of commerce.

For middle-aged men like me who define ourselves by what we do, this can be traumatic. Overseas studies show that retirement, especially involuntary early retirement, accelerates mental decline and is associated with depression, ill health and early death.

Contrast this with the vibrant Rupert Murdoch, 80, still on the frontlines of his vast business empire, or Warren Buffett - a year older than Murdoch - the eternal business sage.

Compounding the social isolation that comes from being forced to exit the workforce before we are ready are the economic consequences of no longer being in the rat race.

In 2010, the Retirement Commissioner estimated that half the population over 65 earned less than $100 a week outside NZ Super.

It is no secret that those over 50 struggle to find work. No one wants to employ them. Empirical studies confirm what we intuitively know: they are physically and mentally slower than younger workers, especially where problem-solving, learning or speed is important.

Many do not like doing menial work and often want too much money for the limited value they add.

These same studies also show a small decline for tasks where experience, knowledge and verbal skills are paramount. In short, people over 50 are better at managing than doing, but modern business organisations are flat. Few chiefs, many Indians.

Corporate life offers a seductive economic trap for young, talented people. Fast-tracked promotions, good money and interesting work until your time is up, by which time your best years are behind you.

For those who lack the social and intellectual skills to climb the corporate ladder, self-employment is a matter of necessity.

Not everyone wants to work until they are 80 and starting a business is hard work, but being your own boss is the best protection against economic irrelevance. Each year you delay, each year you spend comfortable in that corporate job with the illusion of security, increases the risks that when your current employment ends, your career, self-esteem and financial independence will go with it.