Decision Making Retirement

Early literature on retirement focused almost exclusively on men. More recently, researchers have recognized that women may make the decision to retire somewhat differently from men due to differences in caregiving responsibilities, employment opportunities and cultural expectations. In addition to the economic and health factors, recognition of these differences reminded researchers that, in addition to economic and health factors, caregiving responsibilities and the desire to retire at the same time as a spouse can influence both men and women’s decisions. Significant differences in the economic resources and care-giving responsibilities of older men and women can lead to differences in the timing of retirement and also to the adequacy of income in retirement.

Since World War II men have been retiring at earlier ages, while the trend in older women’s work force participation has been upward. Between 1950 and 1999, the labor force participation of men fell from about 86 to 68 percent while women’s participation increased from 25 to 50 percent. At ages 65 and over, men’s participation declined even more, from 47 to 16 percent compared with a marginal decline from 10 to 9 percent for women. Most of the decline for men occurred before 1985 with fairly stable rates since then, while older women’s work force participation has continued to increase.

Retirement trends have important implications for public policy. The age at which workers retire has an important impact on labor supply, affecting job prospects for younger workers as well as employers’ access to experienced workers. The financial solvency of government retirement programs such as Social Security and Medicare are directly affected by retirement trends. Public policies and tax law regulating employer-based pensions, individual retirement accounts, and other savings vehicles are also impacted by trends in retirement. Thus, there is a public interest in the retirement decision-making process.