For many different reasons there is a lot of interest in the retirement age – it affects both the way people feel about their lives and it affects the economy. There are at least two different meanings that are attached to the term “retirement age”. One refers to the age at which people can draw their state pension and another refers to the age at which employers are able to ‘require’ people to retire from work. A third meaning is about the age at which workers proactively choose to retire.
One reason for the current interest is the huge potential liability that is building up if the state has to cover a relatively early retirement age for a population that is living longer and longer. By some estimates, over 50% of children born now will live to be over 100 years old. At the current retirement age this will mean providing pensions to this group for over 35 years of retirement – a third of their lifetime! No economy could support this.
The government will be considering this issue right now and one question they will be asking will be ‘is retirement good for people or not?’ A few years ago I read about some research that examined this issue directly. The study looked at which groups were most psychologically healthy – people who had retired early; those who retired at the normal age; or those who were working after retirement age. The results showed that the healthiest groups were those who had retired early and those who were working after retirement age. These were strange results in a way – suggesting that both retiring early and carrying on working are better than retiring at the normal age! In fact, a closer look at the findings clears things up because people who retired early were only healthier if they had chosen to retire; similarly people working after retirement were only happier if they had no financial need to carry on working. It seems like control is an important factor when it comes to retirement.
Obviously the retirement age needs to increase from an economic perspective and there are no simple solutions, but according to these findings pushing older people out of the workforce before they are ready to go is not the answer. Allowing people to have the option to continue working after retirement age is desirable – this will allow people to improve their financial position and provides a sense of purpose. If they are financially sound they are more likely to be happy to carry on working and will require less in terms of support from the state. At the end of the day, this is a social and psychological issue as well as an economic one.
You can find the research in the British Journal of Psychology (2004), 95, 297–324
