Retirement - Definition & Importance
What is Retirement?
Retirement is when a person stops or retires working after the service of a certain period of time. Retirement is officially stopping your professional career. It could be because of the age set by the government or companies, the voluntary retirement due to some health issues, work conditions or some other issues or the benefits which a person can avail later.
Retirement could be complete when a person stops working completely or partial when a person reduces working hour in consent with the company. In case of semi-retirement, the compensation is different from full employment as well as full retirement.
Importance of Retirement
The age of retirement set by the government varies from country to country. It generally varies from 50 to 70 years. The first country to start this concept was Germany, in 1889. Before that the life expectancy rate was low and people used to work till death also. The age of retirement was different for male and female employees in the early times when this concept was brought in by the countries. However later, due to the reduction in manual efforts and mechanization, the parity in the age limit has been removed in most of the countries as the productivity of both males and females is similar.
The benefits after retirement also varies from countries to countries. Amount of pension and other benefits depends upon government as well as companies. The companies generally take out a part of salary of employees every month and that is saved under retirement benefits funds. In India, the pension and retirement fund is more common in Public sector than Private sector. It is also seen a celebration of farewell from the company.
Now a days, retirement planning is itself a business. Many digitalized companies provide planning offers which illustrate how much funds one should save every month for the age after retirement. There are planning calendars also. For example, Capital Group of Companies (US based firm) having online asset management services offers a planning calendar where you enter your monthly salary and other job related details and it gives the amount to be saved for retirement every month.
Hence, this concludes the definition of Retirement along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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