More and more people are working past the age of 65, opting for flexible or part-time employment instead of sitting at home with their gold watches, writes Laura Slattery.

It's been called the "cliff edge". For 40 years, give or take holidays and occasional periods of leave, a typical worker might work a 40-hour, five-day week, clocking in at 9 a.m. and running out the door at 5 p.m., just in time to join in the fun of rush hour. Then one day, he or she suddenly stops doing all of that.

But this picture is changing. More and more people are choosing to work past 65. Others are taking early retirement from their "job for life" in their 50s but finding flexible or part-time employment rather than staying at home with their good luck cards and gold watch, feeling bereft.

"Most workers do not want a guillotine applied to their working life," says Mr Paul Murray, information executive for Age Action Ireland. Instead, greater numbers of older people are looking for a flexible transition to retirement. "This is basically a European concept whereby what we do is retire over a decade and allow people to decide on a retirement age that might not be 65 or 66," explains Mr Murray.

Last month, the British government published a green paper on pensions promising legislation to ban compulsory retirement ages and encouraging employers to allow staff to "phase in" their retirement.

Surveys by the Economic and Social Research Institute (ESRI) have suggested that there is a strong desire among Irish people to retire gradually, reducing the number of hours and days worked before stopping completely. According to one ESRI report from 2001, seven in 10 of those at work in the 55-69 age range would prefer to retire more gradually than is currently the norm.

At the Retirement Planning Council of Ireland, about 4,000 people take preparation courses on the financial and emotional consequences of retiring. Less than a fifth are at the traditional retirement age of 65, according to Mr Eamon Donnelly of the council. Most are between the ages of 58 and 62 and leave their jobs either because they want to avoid stressful workplaces or because they are offered good packages to leave.

But around a third seek further employment with a new employer, he estimates. "In the old style, when people retired they pottered around and then they died," says Mr Donnelly. Now people are not actually retiring, he says, but simply changing their lifestyle. "People are now living much longer and they do require income. They're not going to drop their standard of living, they're not going to entertain that."

Organisations representing the interests of older people believe that the question of when and how to retire should be a matter of choice, not necessity.

The debate on "becoming unemployed overnight" has been around for some time, says Mr Gerard Scully, information officer for Age Action, but the adequacy of pensions and the poor performance of pension funds mean there are now added financial imperatives to carry on.

Stock market hits on pension funds have forced some older people in the US to continue working, notes Mr Murray, and pension funds here lost almost a fifth of their value in 2002. These falls affect people close to retirement who hold personal pensions or who are members of defined contribution company schemes.

In the future, it is not the market performance of pension funds that is expected to be the main problem, but the actual level of contributions placed in the funds. This is because employers are gradually reducing the value of contributions they make to pensions and because younger people who put off starting a pension will have to work longer to build up an adequate fund.

Some employee benefits experts in the UK have suggested that the British government's focus on a flexible retirement age in reality means finding ways to get people to retire later. This is not always an option due to ill health or the physically demanding nature of work in certain industries, such as construction.

People who do want to continue working or who want to phase in their retirement often face a number of barriers, according to Mr Murray. These include age discrimination, lack of flexible or part-time hours and concerns about the impact on their pensions income and benefits.

The over 65s have an extra income tax-exemption limit, which increased in last December's Budget. The amount of income for people over 65 that is non-taxable rose to €15,000 from €13,000, or to €30,000 from €26,000 for a married couple. "The problem is when you start going over that," Mr Murray adds.

But tax is not even a consideration for older people if they have trouble finding work in the first place. Job interviews can be nerve-wracking at any age, but people over 65 have the added disadvantage of being excluded from equality legislation - a fact Age Action Ireland describes as "outrageous".

Ageism in the labour market is rampant, kicking in at 50 for men and even as young as 40 for women, says Mr George Reynolds, a self-employed management consultant who would prefer to be an employed management consultant.

With a background in science, experience living abroad and 15 years spent running his own business, Mr Reynolds has made 80 job applications since graduating with an MBA (Masters in Business Administration) from the Smurfit Business School two years ago, but has been offered interviews just twice. He is 52.

Recruitment specialists have admitted to him that his age must have played a role, he says, but "nobody is going to put it in writing that they've turned you down because of age". Mr Reynolds believes it is in the initial selection process where people over a certain age are weeded out from the stacks of CVs and binned, or even eliminated by software scanning electronic application forms.

"When people being laid off in their 50s can't find work, they become long-time unemployed," he says. Pensions will not be built up enough at this stage to adequately fund a retirement that is lengthening thanks to increases in life expectancy, he points out.

The British government's green paper on pensions suggests allowing people to receive a proportion of their company pension and continue working part-time for the same employer. This could help people who want to phase in their retirement but don't want to face into the job market again to search for a part-time job.

Working flexible hours or going down a level at their current employment could help people who want to bypass the process of learning new skills or building new relationships from scratch. But seeking a demotion rather than a promotion near the end of your career is almost unheard of in this country, according to Mr Murray.

"If you're the managing director of a company and you're an accountant, what's wrong with going into the accountancy section? Why do you have to be the chief and then nothing?" he asks.

Employers should be able to facilitate older people with contract or part-time work, Mr Donnelly believes. The growing acceptability of working from home and communicating with the office via telephone and email will benefit people of all ages, he adds, including older people. "It's not just the financial concerns, there's preparation time as well," concludes Mr Scully. "People have to prepare for the shock of working one day and not the next."