Retirement Planning: Balancing Experience and Innovation

Retirement planning:happy retirement or seek extension?

In the bustling world of pharma-sales, the question of whether to seek an extension after retirement often doesn’t cross the minds of those actively serving. However, as the years go by and retirement looms closer, this question becomes more pressing. Generally speaking, the question of whether to extend employment after retirement doesn’t typically arise for someone who has served in a pharma company for many years and still has several years until retirement. I relate this to my own experience. When I had already served the company for twenty-five years in 2007, I never considered what would happen after I reached my retirement age at 58 in 2019. However, in 2007, an unknown assurance of getting an extension in my services seemed likely, as people at the helm of affairs holding positions like NSM, GM, etc., were all given extensions after their superannuation. They continued strong in their roles, often with similar emoluments but under third-party arrangements, not on the company’s regular rolls.

Retirement Planning: Balancing Experience and Innovation
Just retired man engrossed on the crossroads whether to seek extension or opt for stress free happy retirement

Observing Extensions in Action

I retired on October 31, 2019. My General Manager, who retired earlier, has sustained his role through annual extensions due to strong relationships with the CEO and extensive experience. This “Retainership” model is less common in multinational companies, which adhere to strict retirement policies. This reflection highlights the contrast between personal experiences and broader industry practices regarding post-retirement employment extensions.

The Value of Fresh Perspectives

If you ask me whether extending the tenure of a retired professional who has spent many decades in the same organization is beneficial, I would strongly advocate for a big “NO.” After years of dedicated service, it’s vital to open doors for fresh, young talent. New minds bring in fresh ideas and adapt swiftly to the constantly evolving pharmaceutical landscape. This infusion of new talent can rejuvenate a company’s operations, ensuring ongoing growth and adaptation.

Weighing Experience Against Innovation

Retirement Planning: Balancing Experience and Innovation
Brain and Light Bulb on Seesaw – weighing experience against innovation

For individuals retained beyond their retirement age, their working style, creativity, and mindset have already been proven. The main advantage they offer is their extensive experience. To manage this, larger companies often engage notable figures as consultant advisors rather than keeping them as regular employees under retainership.

From my perspective, I haven’t observed significant changes brought about by such individuals, aside from their substantial post-retirement earnings, which can strain company finances. This becomes especially challenging during economic downturns, like declining GDP, putting pressure on both the company’s revenue and profitability.

For those contemplating an extension, it’s crucial to recognize that while experience is invaluable, it’s not the only factor for success. Many companies opt to retain seasoned professionals as consultant advisors. This approach balances the benefit of experience with the need for fresh, innovative perspectives.

Personally, speaking I have not seen any significant change being brought about by such people except minting their own money which is very high at the time of retirement consequently giving a very high load on the revenues of the company. Especially at the time of GDP slowing down due to the various unforeseen factors and even the company’s “Top-line and the Bottom-line” picture trying to justify their existence in the company’s revenue-sheet.

Financial Implications: Top Line vs. Bottom Line

The top line and bottom line are two of the most important lines on the income statement for a company. Therefore, when a company has “top-line growth,” the company is experiencing an increase in gross sales or revenues. The bottom line is a company’s net income, or the “bottom” figure on a company’s income statement.

•             Both the top-line and bottom-line figures are useful in determining the financial strength of a company, but they are not interchangeable.

•             The bottom line describes how efficient a company is with its spending and managing its operating costs.

•             Top line, on the other hand, only indicates how effective a company is at generating sales and revenue and does not take into consideration operating efficiencies which could have a dramatic impact on the bottom line.

On analysing why companies extend employment for retirees, it seems they value seniority and experience. While this might make sense, I disagree with their approach in today’s times, where balance sheets are crucial. The statement “No one is indispensable” holds true. Removing the practice of retaining employee’s post-retirement would save money and provide real chances for new professionals, bringing positive changes to the company’s overall functioning.

Companies should stick to providing the best to their employees until retirement and ensure they receive their retirement benefits as per government provisions. Offering a retirement plan helps retain good employees and serves as a recruiting tool. The field force will be happier knowing they have financial security in retirement, which is prevalent today.

Freelancing: A Post-Retirement Opportunity

Retirement Planning: Balancing Experience and Innovation
Senior woman at home-utilizing years of experience with freedom in freelancing

For those retiring from pharma-sales, freelancing offers a lucrative and engaging alternative. It allows for continued involvement in the industry, utilizing years of experience while enjoying the freedom retirement brings. Freelancing can provide financial stability and keep retirees mentally active and professionally engaged.

Happy Retirement and Low-Stress Jobs After Retirement

Retirement Planning: Balancing Experience and Innovation
Happy retirement is not only financial security;it is about finding fufilling activities

Happy retirement is not just about financial security; it’s also about finding fulfilling activities. Low-stress jobs after retirement, such as consulting or freelancing, can provide a sense of purpose without the pressure of a full-time role.

Where to Put Retirement Money After Retirement

Deciding where to put retirement money after retirement is crucial for financial stability. Diversifying investments and seeking professional financial advice can help ensure a comfortable and secure retirement.

The Retirement Plan and the Retirement Savings Magic Number

Retirement Planning: Balancing Experience and Innovation
Seem to have a solid retirement plan pursuing for a happy retirement

Having a solid retirement plan and knowing your retirement savings magic number are essential steps in preparing for a happy retirement. These elements provide a roadmap for financial security and peace of mind.

Final Thoughts

In conclusion, while extensions can offer short-term benefits, the long-term health of a company often lies in welcoming new talent. Companies should consider phasing out extensions to save costs and foster innovation. Retirees, on the other hand, can explore freelancing as a fulfilling post-retirement path, blending financial gain with personal satisfaction.

Retirement marks the beginning of a new chapter, and embracing it fully can lead to both personal and professional growth. Letting go of the old and welcoming the new ensures that both individuals and companies thrive in an ever-changing industry.

Ultimately, while the extension of employment after retirement might seem beneficial for maintaining experienced leadership, it’s essential to balance this with opportunities for new talent. This approach not only saves costs but also fosters innovation and growth within the company. Retirees should enjoy a happy retirement, leveraging their savings magic number, and exploring low-stress jobs after retirement. It’s vital to consider where to put retirement money after retirement and explore jobs after retirement that align with one’s interests and skills.

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