The Hidden Cost of Retirement Mismanagement

Aug 18, 2025 | Leadership transitions, Mental health and well-being, Transformation

Retirement is a pivotal moment that extends beyond a mere career endpoint. It reflects both personal legacy and organisational culture. The way an organisation handles a leader’s departure speaks volumes about its values. Mishandled exits, such as those that avoid addressing the topic or forget to celebrate individual contributions, damage trust, morale, and cultural continuity. Conversely, honouring transitions thoughtfully fosters institutional memory and effective transitions that maintain healthy relationships. Recognising the emotional dimension and treating retirement as a strategic opportunity, rather than a bureaucratic formality, can unlock longer-term value for all involved.

While knowledge-based roles can typically be transitioned more easily, relationship-driven positions, such as senior sales or leadership roles, demand more personalised and carefully managed exit strategies to avoid disruption. Organisations frequently fall short in clearly communicating with those nearing retirement. This lack of clarity, combined with individuals’ fears of becoming irrelevant, contributes to a broader reluctance to engage openly in the retirement process.

Organisations, like individuals, exhibit attachment styles in how they manage separation and retirement, which shape how transitions are handled:

  • Avoidant organisations downplay departures, offer minimal engagement, and avoid emotional acknowledgement. This results in cultural coldness and missed legacy opportunities.
  • Anxious organisations cling to retiring leaders, blur boundaries, and resist succession, a common practice in family businesses. This disempowers successors and creates confusion.
  • Disorganised organisations send mixed signals, lack planning, and manage transitions inconsistently. This creates distrust and disengagement.
  • Secure organisations acknowledge departures openly, plan ahead, engage the retiree meaningfully, and celebrate contributions. These organisations retain goodwill, build culture, and demonstrate leadership through endings.

The psychological lens of Erikson’s “Generativity vs. Stagnation” highlights the importance of legacy and ongoing contribution in the retirement phase. At its heart lies the question: “Can I make my life count?” Individuals at this stage seek purpose, recognition, and a sense of belonging. When opportunities to contribute are absent, stagnation can set in, often leading to disconnection, self-focus, and a loss of direction. Generativity, by contrast, involves contributing beyond oneself through mentoring, knowledge sharing, or community engagement. Organisations can play a key role in enabling this transition by creating meaningful, generative opportunities.

Celebrating retirements in an authentic and personalised way, rather than relying on generic gestures, helps individuals feel valued. Transition processes should avoid unnecessary bureaucracy while supporting a reflective and purposeful closure.

A healthy approach to transition is key to the effective implementation of transition plans. Otherwise, retirees might be tempted to sabotage their succession. Retirement should be viewed not as a loss, but as a strategic and developmental opportunity: a moment to reinforce leadership values, model healthy transitions, and invest in future generations. When approached with care, it becomes a powerful phase of renewal for the individual, the team, and the wider organisation.

Several design principles can support more meaningful exits: starting conversations early, create reflective space for transition, creating phased or grey-zone roles (e.g. part-time advisory work), and adapting performance metrics to include mentoring and legacy contributions.

Below are ideas for organisations to consider when shaping their approach to retirement. they draw on research conducted by Isabelle Lebbe and Graham Ward enriched by insights from participants of our UnLearning Labs:

Framing & Mindset Shifts

  • Reframe retirement as a transition, not just an exit.
  • Treat offboarding like onboarding: a strategic, human-centred process.
  • Use the lens of Erikson’s “Generativity vs. Stagnation” to support meaning, legacy, and continued contribution.
  • Position retirement as strategic continuity planning rather than solely succession management.
  • Normalise retirement conversations early to reduce stigma and taboo.

Organisational Design & Policy

  • Create structured yet flexible transition planning that avoids excessive bureaucracy.
  • Start early. Initiate transition conversations well in advance.
  • Tailor the process to each individual, recognising diverse personal preferences and national retirement norms. Avoid one-size-fits-all exits.
  • Use emergency planning frames (“What if you’re hit by a bus?”) to open dialogue.
  • Align retirement policies with DEI and long-term workforce planning.
  • Clarify who is responsible for the retirement transition: individuals, HR, boards, or leadership. Ideally, leadership should be involved.

Knowledge Transfer & Legacy

  • Offer pre-retirement mentoring roles to pass on knowledge.
  • Involve retirees in training, alumni networks, or governance roles.
  • Capture institutional knowledge through interviews, storytelling, playbooks, or reverse mentoring.
  • Recognise legacy-building work as part of the performance indicators for pre-retirees.

Role Flexibility & Grey Zones

  • Encourage phased exits, advisory roles, or project-based contributions.
  • Explore part-time and consulting arrangements post-retirement (with clear expectations).
  • Allow for “grey zone” roles where retirees can stay engaged without undermining successors.
  • Clearly define boundaries if retirees are to return as consultants or advisors.

Celebration & Rituals

  • Design symbolic and personal endings, not just standardised parties. Celebrate contributions authentically to honour individuals’ work and provide closure. Avoid generic farewells, as they can damage morale and culture.

Community & Belonging

  • Create peer cohorts or transition communities for retiring employees to reduce isolation.
  • Assign a ‘transition buddy’, similar to onboarding buddies, to guide emotional and practical aspects.

Cultural and Emotional Intelligence

  • Model healthy transitions from senior leadership (N-1 level and up).
  • Recognise the emotional complexity of retirement (loss of identity, status, belonging).
  • Offer pre-retirement coaching and workshops to build psychological readiness.

Risk Management

  • De-risk over-dependence on individuals.
  • Plan succession robustly to avoid disruption from key exits.
  • Anticipate financial and legal implications (e.g. around ageism, unclear consulting roles).

If you or your organisation are currently navigating or preparing for leadership transitions, get in touch to explore how KDVI can support you.

Oriane Kets de Vries:

Oriane Kets de Vries is CEO and owner of the Kets de Vries Institute. She leads a global team of coaches, consultants and educators dedicated to developing reflective, emotionally intelligent leaders and cultivating workplaces where people can thrive. In her faculty role, she draws on extensive experience designing and directing leadership programmes for senior executives, contributing her expertise in psychodynamic coaching, organisational culture, and transformational leadership development.

Oriane has served as consultant, coach, and programme director for clients including Pictet, Deutsche Bank, Merck, UBS, Mishcon de Reya, and Engie, and she has taught on open-enrolment programmes with leading institutions such as Cambridge Judge Business School, Oxford Saïd, INSEAD, ESCP, ESMT and CEDEP. Her interests centre on the human side of leadership, particularly identity, creativity, entrepreneurship and gender dynamics. She holds an MBA and Executive MA in Coaching and Consulting for Change from INSEAD, has trained at the Harvard Kennedy School, and brings more than a decade of professional experience in creative and entrepreneurial industries into her work with leaders.

Manfred Kets de Vries:

Manfred Kets de Vries is a pioneering authority in leadership development, coaching, and organisational change. He is a founder and director of the Kets de Vries Institute (KDVI) and served as Distinguished Clinical Professor of Leadership Development and Organisational Change at INSEAD. With academic credentials in economics (University of Amsterdam), management (MBA and DBA, Harvard Business School), and psychoanalysis (trained in Canada), he brings a uniquely interdisciplinary perspective to leadership. His work bridges management theory and clinical insight, establishing him as a global thought leader in executive coaching and transformation. At INSEAD, he founded the Global Leadership Centre and led the flagship programme The Challenge of Leadership for 31 years. He also served as scientific director of Coaching and Consulting for Change, an 18-month Executive Master’s programme that has shaped over 3,000 senior leaders and executive coaches worldwide. He has advised and coached senior executives at global firms including Goldman Sachs, BP, Shell, Unilever, McKinsey, and Volvo. A prolific author of over 60 books and 400 articles, his work appears regularly in The Financial Times, The Economist, and Harvard Business Review. Recognised by Le Capital, Wirtschaftswoche, and The Financial Times as one of the world’s top 50 management thinkers, he is widely regarded for advancing more human-centred approaches to leadership.

Yulia Chupina:

Senior Adviser (Luminary) at Accenture and executive coach with over 12 years of board experience. Formerly a banker and McKinsey consultant, Yulia has led banking transformations in digital, agile, organisational change, and talent development. Her coaching spans the finance, tech, and consumer goods sectors, blending technological insight with emotional intelligence to guide leaders through transformation. Recently, she advised BBVA on agile methodologies and senior talent development. Influenced by thought leaders such as Manfred Kets de Vries and Gabor Maté, Yulia brings an analytical, reflective approach to leadership. She has lived and worked across the UK, Spain, the US, and Russia.

Elizabeth Florent:

Elizabeth has worked closely with Manfred Kets de Vries for many years and has served as a Senior Lecturer and Research Fellow at INSEAD. Her extensive background in leadership development spans organisational consulting, executive coaching, and academic research. She holds advanced degrees in Organisational Development and Clinical Organisational Psychology and is a certified Coaching Supervisor through the Tavistock Institute. Her doctoral research explored experiential domains in executive education, and she has authored or co-authored numerous academic articles, case studies, and books on leadership and organisational dynamics. Elizabeth led the development teams behind KDVI’s diagnostic instruments, including the GELM, OCA™, and ITI. Drawing on her diverse training and global experience, she brings deep cross-cultural insight to her work with leaders worldwide. Originally from California, Elizabeth has made France her home for over 30 years.