Once a person reaches a certain age or acquires a certain amount of work experience, he becomes eligible for retirement. Every organization should have clear-cut rules regarding retirement and it should help the employees in adjusting themselves after retirement to the new realities of life. Some organizations provide pensions for their retired employees, but more and more individuals have to provide for their own retirement.

Retirement is an important event in an employees life and also has an important impact on the organization where he worked for a major portion of his life. Therefore, at the time of parting, the personnel manager should arrange a special interview with the employee. He should thank the employee for his services to the organization and ask him to speak about the changes or improvements he would like to be introduced in the organization.

Retirement can be classified into three categories: compulsory retirement, forced retirement and premature retirement. While every individual retires after he reached the retirement age set by the company/ firms, forced retirement happens if an employee has violated the conditions enumerated in the service agreement. On the other hand, premature retirement happens when an employee becomes disabled in an accident or due to some disease, or is offered the option of retiring by the management before attaining the retirement age with full benefits of retirement.

It is good to plan for retirement well in advance so that you can become mentally and financially prepared for a life without a daily work routine or regular paycheck.