A survey of retirement intentions of baby boomers: an overview of health, social and economic determinants

The economic, social and health consequences of Baby Boomers reaching retirement age is a topic of increasing academic and policy interest [1‐3]. Baby Boomers, those born between 1946 and 1965, constitute a large proportion of the population of most industrialised countries and has been exacerbated by increased longevity and decreasing birth rates affecting age distributions [4‐7]. In Australia, there were 4.2 million babies born between 1946 and 1965 [7] and they now constitute a quarter of the total population [8]. Moreover the post-WWII era was a phase of massive immigration which introduced significant numbers of Baby Boomers born in Europe. In 2011, 33.2% of Australian Baby Boomers were born outside of Australia.

As Baby Boomers start retiring, countries facing this demographic transformation have major concerns. These include retirees outnumbering new entrants to the labour force, loss of skilled and experienced workers [5, 9] and the effect on economic growth and income from taxation [10‐12]. Coupled with this is the financial burden with increasing numbers requiring tax-funded services such as pensions and other social security benefits [7]. Importantly, the impact on the health system as increased numbers require medical services and intervention is of concern [9, 13].

As a result of these apprehensions, governments have been implementing policies aimed at halting the long term trend towards early retirement [7, 14‐16], contrasting with government policies of the 1970s and 1980s during which early retirement was promoted as a way to lessen the burden of the over-supply of workers [5]. Government initiatives aimed at encouraging Baby Boomers to remain in the workforce, to lessen the effects of an ageing population, include implementing age discrimination laws, removing compulsory retirement age, raising the pension eligibility age and encouraging increased personal saving and planning for retirement [7, 17, 18]. In addition, policies aimed at extending working life and workplace participation by encouraging a delay or gradual transitions to retirement, and financial incentives for companies who hire older employees have been implemented [9, 10]. Notwithstanding these policies, research has shown that early retirement is both voluntary and forced and is influenced by ill-health, lack of job satisfaction and adequate long-term financial resources [9, 10, 14, 19‐22].

This study examines a sample of Australian 50–65 year olds and assesses their retirement intentions. As argued by Anderson [6], public policies can have a strong effect on when a person retires and this study aims to contribute to an improved understanding of retirement aspirations in regards to health, social, workplace and economic determinants. Delaying retirement is dependent upon Baby Boomers being willing and able to extend their working life [19] and this research provides an empirical context to these factors to better inform policy making.

Of the eligible respondents (n = 897), 9.4% (n = 84) were excluded from the analyses because they did not know their retirement intention. In total, 25.9% (n = 210) of people aged 50 years and over who were currently working indicated that they intend to retire completely from the workforce with 74.1% (n = 602) indicating that they will continue to work in some capacity (41.8% retire from full-time work but work part-time, 25.7% continue working part-time but reduce their current hours, and 6.7% never retire from workforce).

Table 1 shows the socio-demographic characteristics of the sample (n = 812). Mean age was 56.9 years (standard deviation = 4.48). In total, 80% of the sample were married or living with a partner and over 40% had an annual household income of over $A80,000.

Table 2 highlights the uni-variable analysis of demographic factors associated with those who intend to completely retire (as opposed to those who plan to continue to work full or part-time) with females, those with lower levels of education, and those indicating a habit of saving (no regular plan to regularly) being more likely to indicate they would retire completely.

Table 3 highlights the work related variables with self-employed and those thinking only moderately about retirement being less likely and sale workers, machinery operators and drivers, and labourers more likely to anticipate complete retirement. In addition, those working over 40 hours per week, and those without the possibility of working from home were also more likely to indicate complete retirement.

Table 4 highlights the health-related variables with the overweight less likely to anticipate working beyond the retirement age of 65.

Table 5 details the multi-variable results with lower education, saving regularly, and sales workers more likely to anticipate complete retirement and the self-employed and those thinking only moderately about retirement being more likely to extend their working life beyond age 65.

This research has identified health, social and economic determinants of Baby Boomers currently working who intend to retire completely, compared to those who are considering continuation of work either in a full-time or part-time capacity. In total, only a quarter of Baby Boomers in this sample planned to retire completely and this analysis has provided a detailed description of this group. As argued by others, the loosening of the retirement definition, as one that is seen as a definitive point in time without ‘shades of grey’, is changing with life course boundaries being loosened [33]. Part-time work, retirement transition and mindsets associated with what constitutes retirement are altering from the traditional, formalised, ‘on-time complete retirement’ concept [20].

Previous research has reported that health has a significant effect on working status in older ages [21, 34]. Our measure of overall health was a single self-reported question (SF1), which has been shown to be a powerful predictor of actual health status [13, 35]. This measure was not significant at the uni-variable or multivariable stage, indicating no difference in health status between those intending to retire completely at age 65 (the Australian government current recommended retirement age) and those planning to continue to work. It should be noted that our analysis was limited to those currently in the work force and respondents who were unemployed or stated home duties as their current work force status were excluded and may indeed have poorer health status. An Australian study has also shown that reducing risk factors increases labour force participation [36] but our study has shown that there is little relationship in our study between risk factors, as measured by physical activity, smoking status, fruit and vegetable consumption and BMI, and Baby Boomers plans to retire, especially at the multi-variable level.

Only one of three financial and economic related variables included in our analysis (household income, financial security and ability to save) were included in the multi-variable model with those indicating that they had a saving habit nearly twice as likely to indicate a preference to retire completely. It should be noted that no measure of wealth per se was assessed and this could be a confounding variable. Previous research has shown one of the major contemporary reasons for extending working life is lack of financial security [3, 22]. The Global Financial Crisis (GFC) originating in 2008, has affected all developed and developing countries [37] and in particular many of the current wave of Baby Boomers [18, 37, 38]. Previous Australian qualitative research conducted in 2008 reported that the majority of workers aged 50 to 62 years were re-assessing their retirement plans as a result of the GFC [38]. Research undertaken in 2009 reported that nearly 40% of workers aged 50 to 64 years had postponed their retirement plans [18] and other commentators have also suggested that Baby Boomers are increasingly staying in their jobs and that the impact of the GFC might be part of their decision making process [39]. Our results perhaps indicate that this hesitation in retiring completely has continued and the popular stereotype that Baby Boomers are not savers and are not saving for their retirement needs to be challenged [40].

Education level has previously been shown to not be related to intention to retire [20] although our multi-variable analysis shows that the more highly educated are more likely to continue to work part time or to never retire. As argued by others [20] education is also perhaps confounded by income, wealth, job security and job flexibility. Education attainment is also reflected in occupation. Other studies have reported similar results with the higher educated more likely to continue to work [15].

Another major finding of the study was the association between occupation and retirement intentions, with sales workers more likely to indicate full retirement as their choice. Research has shown that those in physically demanding jobs are more likely to retire early and completely [16, 41, 42]. In recent decades structural economic change has seen physically demanding jobs decrease although at the same time there has been an increase in high-stress jobs and cognitive challenging jobs which can also influence retirement plans [16]. Middle aged females are critical to the labour supply and are seen as a key policy target. Many of these are in the sales industry. Recent labour force trends show that more women aged 55 years and over are remaining in the work force than previously [39] and the most marked change was in the older 60 to 64 year age group. A large part of these increases are of part-time workers although those in full-time jobs have also increased. While not assessed in this analysis, the ‘dual issues’ of the formal carer shortage, and the current caring role of many Baby Boomers (limiting their participation in the work force), makes balancing the ‘caring’ role with work, a key policy issue. The caring responsibilities of mid-life women may impact on employment roles and pathways to increase workforce participation opportunities for this group warrants serious consideration [14, 15].

The self-employed were less likely to report retirement as an option. The retirement intentions of the self-employed have not been extensively researched [42, 43] although research has highlighted the average age is higher for self-employed retire than those employed by others [42]. It has been suggested that one self-reported group, who typically have been self-employed for a longer period of time, appreciate the flexibility, security and autonomy associated with being self-employed. A higher income around the retirement age also decreases the likelihood of permanently retiring. For a second group, the lack of financial security is a possible reason for the lack of retirement plans. It is apparent that self-employment for this second group is not a transitional process on the path to full retirement with research showing that these self-employed older workers are more likely to have had many short term and part-time positions and poor job prospects [42, 43].

The major weakness of this study is the self-reported nature of the data collection, common in all survey research methodology. Additional clarification on timeframe for retirement intension and the extent of how they were thinking about retirement would have been beneficial. Strengths include the relatively large sample size and the large number of variables assessed.

This research has highlighted a range of attributes associated with Baby Boomers planning to retire completely and reinforces the need for policies to encourage extension of working lives need to take account of a range of factors. There are no single ‘silver bullet’ solutions [44]. While acknowledging that some issues, such as work conditions, can be influenced by appropriate policy interventions, other factors, such as education, are not amenable to policy. However, increased flexibility with working hours may overcome some of these harder to influence factors [44]. The flexibility of working arrangements is an important policy [45] so that work-life balance is not compromised. The culture of early retirement, previously so pervasive, is being replaced by a culture of gradual retirement, encompassing continued part-time employment [1]. An important finding of this study is the large number of Baby Boomers who will be happy to work part-time or never retire. Policies and continued dialogue aimed at making the workplace a safe, flexible and welcoming environment to accommodate this wish, for this age group, is required.