Retirement and developmental psychology

• TYPE OF PSYCHOLOGY: Developmental psychology

SIGNIFICANCE: With increased longevity and improved health, many older workers are living long and healthy lives after retirement. Longitudinal studies have explored a wide range of contextual factors that influence life satisfaction during retirement.

Introduction

Retirement only became an accepted part of modern life in the first half of the twentieth century, due to increasing longevity and the introduction of pension and retirement benefits. Many workers choose to retire when they become eligible for pension or social security benefits. In the United States, the possibility of retirement became more accessible with the passage of the Social Security Act in 1935. From 1900 to 2000, the percentage of men over the age of sixty-five who continued to work declined as much as 70 percent in the United States. At the same time, the percentage of all adults over sixty-five who worked at least part-time steadily increased from 1960. Although the majority of older Americans did not choose to work after reaching retirement age, more than eighteen percent of Americans older than sixty-five were working in 2012. This compared to less than eleven percent in 1985.  

This trend continued into the next decade. By 2023, a similar percentage of older Americans had continued to work as in the 1960s. The Pew Research Center attributed this to several factors: 

• Americans were more highly educated, a characteristic that increased employability of older adults
• The evolution of retirement plans such as 401(k), causing a shift from incentivized retirement at specific age milestones
• Labor has become increasingly less strenuous, a trait which favors employment in older adults  

This labor environment for seniors is projected to become a long-term and perhaps a permanent characteristic of the US Economy. In 2021, the US Bureau of Labor Statistics assessed a 95 percent growth in the number of adults age 75 and older, that would remain in the workforce in 2030. Conversely, the number of Americans of younger generations in the labor force is expected to continue to decline. The United States, similar to many developed nations, had for the past several generations experienced both longer life expectancy and decreasing birth rates. This led to larger percentages of older adults over age 60, but a reduced number of Americans in the demographics associated with labor participation and child-rearing. In terms of supply and demand for labor, this has led to increases in the need for workers which the United States traditionally turned to immigration to fill. In terms of native-born workers, older adults over the age of 60 will be the only age demographic that are forecasted to grow as a percentage of the American labor force.

Psychologist Frank Floyd and his colleagues, in their 1992 Retirement Satisfaction Inventory, found four primary reasons for retirementjob stress, pressure from employer, desire to pursue one’s own interests, and circumstances such as health problems. With an increasing number of older workers delaying retirement, psychologist Towers Watson and his colleagues at Boston College's Center on Aging and Work looked at the reasons why American workers postpone retirement and found that the most common reasons included high debt loads, reluctance to lose employer-provided benefits, particularly health insurance, insufficient savings for retirement, care-taking or financial responsibilities for children and older parents, and a desire to remain active and engaged in the work force.

The retired population is defined as people aged sixty-five and over. Traditionally, sixty-five has been the age at which people could retire and receive full Social Security and Medicare benefits in the United States, although a law is in place to gradually raise the retirement age to sixty-seven. Approximately seventy-eight million people belong to the large of baby boomers who will begin to reach the traditional age of retirement in 2010. In 1900, only about three million were retired at age sixty-five, in 2000 the number increased to thirty-five million, and it is projected that, by 2050, the number will be increased to sixty-seven million. If future projections are anywhere close to accurate, it can be assumed that it will take approximately four working Americans to provide for every retiree in 2050.

Working During Retirement

Even as individuals near retirement age, the decision to continue working in some form after retirement or to discontinue work altogether is a complex one. Many people feel that they have sufficient finances to comfortably exist without working if that is their preference. The primary determiner for most is their health status. Employer pension benefits were found to reduce the probability of future employment in some form, while part-time work was more likely for those who were limited to Social Security benefits. Spousal influence is often cited by retirees as a major factor in deciding whether to choose future employment, although spouses report that they perceive themselves as having little influence on the decision. Specific training and the job opportunities that are available within a community are also important in determining postretirement work.

One survey reported that 80 percent of baby boomers expect to work during their retirement years. More than one-third wanted part-time work because they would personally find it interesting or enjoyable. A little less than one-fourth planned to work for financial reasons. In another study, nearly 70 percent planned to work for pay during postretirement because they wanted to stay active and involved.

The probability of working after retirement has a positive with educational attainment and being married to a working spouse. The primary characteristics associated with men who work in their seventies and eighties are good health, a strong psychological commitment to work, and a distaste for retirement.

Retirees in the Work Force

The Retirement History Study by the Social Security Administration identified four career job exits for postretirement employmentpart-time employment in one’s career job, part-time employment in a new job, full-time employment in a new job, and full-time retirement. The Age Discrimination in Employment Act of 1967 prohibited firing people because of their age before they retired, and in 1978, the mandatory retirement age was extended from sixty-five to seventy. Mandatory retirement was banned altogether in 1986, except for a few occupations where safety is an issue.

Studies have found older adults tend to be productive participants in the workforce. They have lower rates of absenteeism, show a high level of job satisfaction, and experience fewer accidents. There is a cyclic relationship between higher cognitive ability and complex jobs. Older adults who work in more complex job settings demonstrate higher cognitive ability, and those with a higher level of intellectual functioning are more likely to continue working as older adults. It is also important to note that ageist stereotypes of workers and their ability can encourage early retirement or have an adverse effect on the career opportunities given to older adults.

Adjustment to Retirement

Retirement may represent golden years for some, but not necessarily for all. Certain factors have been found to have an impact on the degree of satisfaction retirees experience. Some of these factors are found within society and have an indirect influence on how life is experienced for those who retire. Other factors are directly related to specifics in the individual’s life.

Data from longitudinal studies have identified factors that influence adjustment to retirement. Those who adjust best are more likely to be healthy, active, better educated, satisfied with life before retirement, have an adequate level of financial resources, and have an extended social network of family and friends. Factors that contribute to a less positive adjustment to retirement are poor health, inadequate finances, and general or specific stress in various areas of life. Those who demonstrate flexibility typically function better in the retirement setting in which the structured environment of work is missing. Individuals who have cultivated interests and friends unrelated to work show greater adaptation to retirement.

A primary factor in adjustment is whether retirement was voluntary or involuntary. Forced retirement has been ranked as one of the top ten crisis situations that cause stress. When retirement is voluntary, adjustment is more positive. Those who do not voluntarily retire are more likely to be unhealthy and depressed.

An important aspect of successful adjustment is preretirement planning. Those who are most satisfied with retirement are those who have been preparing for it for years. Adults can begin preparing psychologically for retirement in middle age. Decisions need to be made relative to activities that will be used to stay active, socially involved, and mentally alert. Of most importance during this time is the task of finding constructive and fulfilling leisure activities that can be continued into retirement. Individuals who are already involved in a number of leisure activities will experience less stress when they make the transition from work to retirement.

During the middle of the twentieth century, disengagement theory was proposed as the approach older adults used to withdraw from obligations and social relationships. It was suggested that this would provide enhanced life satisfaction. Retirement was viewed as part of the disengagement process. Although this theory has not been considered acceptable for some time, it would be fair to say that it represented a prevailing belief about older adults during the first half of the twentieth century.

Researchers have since found support for the activity theory, which is the exact opposite of disengagement theory. The activity theory proposes that the more active and involved older adults are, the more likely they are to experience life satisfaction. Supporting research suggests that activity and productivity cause older adults to age more successfully and to be happier and healthier than those who disengage. The theory further suggests that greater life satisfaction can be expected if adults continue their middle-adulthood roles into late adulthood. For those who lose their middle-adulthood roles, it is important that they find substitute roles to keep them active.

Marriage and Family Relationships

Retirement is often a time when adults have sufficient time to develop their social lives. Aging expert Lillian Troll found that older adults who are embedded in family relationships have less distress than those who are family deprived. There is a gender difference in the perspectives of older parents relative to the importance of support from family members. Women perceived support from children as most important whereas men considered spousal support as most important.

For married couples, retirement may bring changes for both spouses. When retirement allows a spouse to leave a high-stress job, marital quality is improved. In dual-income families, couples may choose to retire simultaneously or to retire at separate times to ease into the financial changes that retirement may bring. However, studies suggested that both partners reported greater marital satisfaction when they retired at the same time. Retirement may bring about a significant disruption to established patterns within the home and family, and couples need to work together to establish new patterns and habits that are satisfactory to both partners. Some studies have likened the first two years of retirement to the first two years of marriage or parenthood, in that couples need to actively renegotiate their roles, plans, dreams, and habits to adapt to the lifestyle and role changes that retirement brings. Nevertheless, nearly 60 percent of retired couples report improved marital satisfaction following retirement after a period of adjustment.

Work, Retirement, and Leisure

The perception of retirement is affected by work and leisure experiences during the preretirement years. Leisure refers to the activities and interests one chooses to engage in when free from work responsibilities. Many find it difficult to seek leisure activities during the height of their work careers because of the value placed on productivity and the pressures of many modern jobs. They may view leisure activities as boring and lacking challenge. Many workers fear a loss of identity or status with the loss of their jobs; by engaging in enjoyable activities, volunteer or part-time work, or family, retirees can establish new, meaningful facets to their identity.

Midlife is the first opportunity many adults have the opportunity to include leisure activities in their schedule. This can be an especially appropriate time if they are experiencing physical changes in strength, endurance, and health as well as changes in family responsibilities. Those who are able to find constructive and fulfilling leisure activities during this time are psychologically prepared from the middle adult years for retirement. Some developmentalists believe that middle adults tend to reassess priorities and that this becomes a time of questioning how their time should be spent.

Late adulthood, with its possibility of representing the years from sixty-five to more than one hundred years, is the longest span of any period of human development. The improved understanding of the nature of life after sixty-five and the greater commitment on the part of medical and mental health personnel to the improvement of health and living conditions for the older adult are giving all retirees a better chance of being satisfied with the years beyond their work experience.

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