Posts Tagged ‘retirement’

Mandatory Retirement

Tuesday, January 25th, 2011

Many universities used to require faculty to retire by age 70.They wanted to encourage fresh thinking and hire younger (cheaper) professors. Opponents of mandatory retirement maintained that the most senior faculty possess the most experience and would be a loss if they were forced to retire while still productive.

Federal legislation ended the practice of mandatory retirement for university faculty in 1994. Some predicted that the change would result in a grayer, older faculty with fewer slots for new hires. With over 15 years of data, researchers are beginning to examine the effects of the policy.

The National Science Foundation compared retirement rates for Ph.D. faculty in science, engineering, and health fields in 1993, before the ban went into effect, and 2003. Retirement is particularly tricky to count because some faculty continue to work even after officially leaving the job.

They found that over ten years, the average age of faculty had shifted older but that the shift may not be the result of eliminating mandatory retirement. One surprising change is that after 1994 the rate of retirement for faculty under 70 went up while the rate of faculty over 70 retiring went down slightly. The study also found differences in retirement rate by sex, type of institution, and discipline.

Even with more data available, the debate over the benefits and drawbacks of retirement will continue.

Going Gray

Tuesday, July 13th, 2010

In 1993, 43% of Stanford’s faculty was over 50 years old. By 2008, the proportion had reached 53%. At the same time, the cohort of faculty under age 45 has fallen to just 33%. As the San Jose Mercury News reports, it’s getting difficult to convince professors to retire.

Of course, many older faculty members continue to be productive scholars and teachers. All that experience counts for something. Nor are universities allowed to impose a mandatory retirement age. Still, the longevity of faculty members prevents new hiring, ties up office space, and limits the introduction of new perspectives. So, Stanford has unveiled an incentive plan to encourage retirements.

Not all institutions can be as generous, but we can develop robust emeriti programs that promise faculty continued access to the intellectual and social life of the university. Even without tenure, academic jobs promise long-lived satisfaction. If professors knew they could continue pursuing the projects they love and remain part of the department while in retirement, perhaps they would take advantage of the plan.

Planning for Retirement

Tuesday, May 18th, 2010

Few topics can kill a conversation like retirement planning. For as dull as the topic is, spending some time early in a career thinking about it can pay large dividends in the long run.

Boston University offers two retirement programs for employees. In the first plan, which kicks in after two years of service, the university makes a contribution to your retirement account based on your salary. The second plan, which you can start anytime, allows employees to defer up to $16,5000 a year into a supplemental account. This money is pre-tax, so at the same time it lowers your overall compensation for tax purposes.

For the supplemental plan (also known as a 403b), BU employees can choose from a suite of funds managed by TIAA-CREF or Fidelity. Both have solid reputations and low fees, but Fidelity offers more investment options. Of course, for some people, having fewer choices is a good thing.

Both TIAA-CREF and Fidelity send reps to the medical campus each month for free consultations. It’s worth making an appointment every few years or so to make sure you’re on track to meet your retirement goals.