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American Psychologist

Psychological Perspectives on the Changing Nature of


Retirement
Kenneth S. Shultz, and Mo Wang
Online First Publication, February 21, 2011. doi: 10.1037/a0022411

CITATION
Shultz, K. S., & Wang, M. (2011, February 21). Psychological Perspectives on the Changing
Nature of Retirement. American Psychologist. Advance online publication. doi:
10.1037/a0022411

Psychological Perspectives on the Changing


Nature of Retirement
Kenneth S. Shultz
Mo Wang

The concept and the process of retirement are rapidly


evolving. As a result, psychologists are in a unique position
to understand and explain the dynamics behind the changing face of retirement. We begin this article with a brief
overview of the history of retirement and then note the
various definitions used when studying retirement. We then
propose that taking a temporal view of studying retirement
would be most advantageous for psychologists. Psychological conceptualizations of retirement are then discussed,
and we link these conceptualizations to studying the changing nature of retirement. Finally, we conclude with some
suggestions for future research in the area of retirement
that would be particularly relevant for psychologists to
consider.
Keywords: retirement, older workers, work ability

etirement is an interdisciplinary topic studied by


researchers in psychology, sociology, social work,
demography, economics, and organizational sciences, to name just a few fields. As a result, there is a
growing body of literature on retirement, both within academic circles and in the popular press. In the 1970s there
were 203 peer-reviewed articles containing the keyword
retirement, according to PsycINFO. In the 1980s the number rose to 522, in the 1990s it rose to 680, and in the 2000s
it ballooned to 1,804. Thus, retirement as a research topic
is becoming more prominent in the psychology literature.
A major factor influencing this increased stream of research
and interest is the rapid aging of the populations in most
developed countries because of lower birth rates, increased
longevity, and the looming retirement of the large baby
boom cohort (OECD, 2006).
Although research on retirement takes many different
forms, the consensus is that retirement is not a single event
but rather a process that older individuals go through over
a period of years. However, this process is by no means
uniform in that no two individuals are likely to experience
retirement in exactly the same way. In addition, this process is quickly evolving and shifting as the social, organizational, and societal contexts in which retirement takes
place change. As a result, researchers who take a psychological perspective in studying retirement may be better
able to capture the changing nature of retirement, because
psychologists directly study the behavioral and psychological antecedents and outcomes of retirement, as well as the

April 2011 American Psychologist


2011 American Psychological Association 0003-066X/11/$12.00
Vol. 66, No. 3, 000 000
DOI: 10.1037/a0022411

California State University, San Bernardino


University of Maryland, College Park

psychological mechanisms that underlie the retirement


process.
We begin this article with a brief overview of the
history of retirement and then note the various definitions
used in studying retirement. Next, we discuss the need to
examine retirement from a temporal viewpoint. Subsequently, we review psychologys unique contribution to the
study of retirement and introduce several theoretical conceptualizations researchers could use to capture the psychological aspects of retirement. Linking these conceptualizations to the changing nature of retirement, we further
point out several future directions that may be fruitful for
researchers to pursue.

History and a Temporal View of


Retirement
Historical Perspective on Retirement
Historically, retirement is a relatively new phenomenon. Throughout most of history, individuals continued to
work until they were simply no longer physically able to
work. It was not until the industrial revolution, the creation
of Social Security, and the wider availability of company
pension benefits in the first half of the 20th century that
individuals were able to cease paid employment while they
were still otherwise able to work. The origins of the U.S.
Social Security system can be traced to Germany, where in
1889 Chancellor Otto von Bismarck made Germany the
first country to institute an old-age social insurance program. The German program initially set the retirement age
at 70, but in 1916 it reduced the retirement age to 65.
Similarly, both Social Security and traditional defined benefit pension plans encouraged workers to retire at a particular age (e.g., 65). In addition, until the 1980s, many
employers also had mandatory retirement ages. However,
the cultural milieu has shifted in recent years from a pro-

Kenneth S. Shultz, Department of Psychology, California State University, San Bernardino; Mo Wang, Department of Psychology, University of
Maryland, College Park.
We thank Deborah Olson and Janet Kottke for their feedback on an
earlier version of this article.
Correspondence concerning this article should be addressed to Kenneth S. Shultz, Department of Psychology, California State University,
San Bernardino, 5500 University Parkway, San Bernardino, CA 92407.
E-mail: kshultz@csusb.edu

The psychological aspects of retirement have become


extremely important given the length of time people spend
in their retirement. However, the psychological aspects
have often been overshadowed by the focus on the physical
and financial issues that have been shown to impact retirement in previous research. This overshadowing is related to
the fact that the physical and financial issues appear to be
more salient if people spend only a relatively short time in
retirement. However, more and more research evidence
suggests that the physical and financial issues people face
in retirement are directly linked to the psychological aspects of retirement (e.g., Quick & Moen, 1998; van Solinge
& Henkens, 2008; Wang, in press; Zhan, Wang, Liu, &
Shultz, 2009). In this article, we aim to illustrate the utility
of applying psychological perspectives to studying the
changing nature of retirement.
Conceptualizing Retirement With a Temporal
View
Kenneth S.
Shultz

retirement (i.e., mandatory or forced retirement) to a prowork (i.e., pro-choice on the part of the older worker to
continue to work or retire) emphasis with regard to older
workers (see Table 1). As a result, the vast majority of what
we know about the psychological dynamics (e.g., the influence of attitudes and personality characteristics) surrounding retirement has been uncovered in the last few
decades. Therefore, it is critical to better understand the
ever expanding phenomenon of retirement, in terms of both
its antecedents and its outcomes, as it is being reshaped and
redefined over time by factors at the individual, group,
organizational, and societal levels (Beehr & Bennett, 2007;
Shultz & Henkens, 2010).

As Ekerdt (2010) recently noted, The designation of retirement status is famously ambiguous because there are
multiple overlapping criteria by which someone might be
called retired, including career cessation, reduced work
effort, pension receipt, or self-report (p. 70). Not surprisingly, psychologists, who are more likely to study individual-level phenomena, are most likely to choose to measure
retirement via self-report. Adding possible confusion to
this self-report definition of retirement is the fact that
individuals can un-retire or re-retire by rejoining the
workforce and starting new careers after they retire, which
is a relatively common phenomenon now (Alley & Crimmins, 2007; Wang, Adams, Beehr, & Shultz, 2009). Thus,
there are individuals now who retire multiple times
throughout their lives. Although starting a second career at
midlife has always been common in some professions (e.g.,
professional sports, the military), it is now becoming the
norm for many older workers (both professionals and nonprofessionals) as well. As a result, it is not only those in

Table 1
The Evolution of Retirement
Historical period

View of retirement

Prior to 1900

Retirement nonexistent for most workers


as most workers simply worked until no
longer able to work
Retirement becomes a legitimate
possibility with Social Security and
employer pensions
Male workers continue to strive to retire
earlier and earlier, while women delay
their retirement
Economic and social conditions halt
the precipitous decline in age of
retirement for men
The landscape of retirement is in flux
and riddled with uncertainty

1900 to 1950
1950 to 1980
1980 to 2000
2000 to present

Focus of researchers

No systematic research on retirement


What little research is available focuses
on economic issues
Multiple disciplines study both the
antecedents and outcomes of retirement
Longitudinal studies of retirement begin to
emerge
A more integrative framework for studying
the process of retirement begins to evolve

April 2011 American Psychologist

Mo Wang

their 60s and 70s who are retiring for the first time but more
and more often those in their 40s and 50s as well.
To address this potential confusion, we believe that
viewing retirement from a temporal perspective is particularly useful for psychologists who wish to study and better
understand retirement as a process. Retirement typically
begins with a somewhat distal preretirement preparation
and planning phase in which individuals begin to envision
what their retirement might entail and begin discussing
those plans with friends, family members, and colleagues.
Next, as retirement becomes more proximal, individuals
begin the retirement decision-making process, taking into
account a wide variety of factors, including the current
economic and employment contexts as well as family and
personal considerations. Finally, as individuals make the
transition from full-time workers to retirees, they begin the
retirement and life adjustment process. This process may
include engaging in bridge employment (i.e., temporary or
part-time work) to help smooth the transition to full retirement. However, it should be noted that this process does
not go smoothly for all retirees. Some older individuals
enter retirement experiencing ambivalence, anxiety, fear,
depression, and a deep feeling of loss. We address these
issues later in this article when we discuss clinical and
counseling psychologists contribution to the study of retirement.
Viewing retirement from this temporal perspective
allows researchers to investigate retirement as it unfolds
over time from one phase to another while realizing that
this process is not homogeneous across individuals. Within
these broad phases, of course, are smaller and shorter
segments that individuals go through as they approach
retirement, transition through the retirement decision-making process, and begin life as self-designated retirees. Thus,
April 2011 American Psychologist

researchers often focus on a specific phase of the retirement


process in a given study, cognizant that they are studying
just one piece of the larger retirement puzzle.
Figure 1 illustrates the dynamic nature of retirement,
which Neugarten (1996), and more recently Wang and
Shultz (2010), discussed. The right side of Figure 1 depicts
the temporal nature of the retirement process. In addition,
the four boxes on the left side of Figure 1 emphasize that
retirement is not a formulaic process that all individuals
experience in the same lockstep way. As research summarized by Brown, Fukunaga, Umemoto, and Wicker (1996),
ORand and Henretta (1999), and Taylor and Geldhauser
(2007) attests, disabled individuals, individuals from traditionally disadvantaged racial and ethnic groups, those from
lower social classes, undocumented immigrants, the economically needy, individuals who have never worked, and
the chronically unemployed will approach the retirement
planning, decision-making, and transition and adjustment
processes with vastly different experiences and perspectives. Thus, Figure 1 reinforces the need to examine the
unique psychological dynamics that individuals face as
they transition through their own retirement processes,
possibly multiple times.

Psychologys Contribution to the


Study of Retirement
It is evident from a survey of the literature that researchers
from economic and sociological perspectives often pay the
most attention to studying the roles that retirees demographic characteristics (e.g., age and gender) as well as
their health and financial attributes play in shaping retirement phenomena (e.g., Barnes-Farrell, 2003). Psychological perspectives, on the other hand, offer different insights
about retirement phenomena. Within psychology itself we
see several subdisciplines, each with their unique perspectives, that have contributed to our understanding of the
dynamics of retirement. For example, life span developmental psychologists have tended to focus on individual
histories when examining both the antecedents and outcomes of retirement for a given individual. These individual history factors include how people have dealt with
previous transitions (Settersten & Hagestad, 1996), their
work and leisure habits (Morrow-Howell & Leon, 1988),
and their previous workforce participation patterns and
preferences (Appold, 2004). Further, the social and work
contexts, such as older workers job-associated statuses and
roles (e.g., job characteristics and career standings; Wang,
Zhan, Liu, & Shultz, 2008), their social network and family
structure (e.g., Szinovacz & Davey, 2004), and their experience in other life spheres (e.g., marital life; Rosenkoetter
& Garris, 1998), have also been important factors for life
span developmental psychologists studying retirement.
Another research focus of life span developmental
psychologists studying retirement has centered on how
retirees adjust to postretirement life. Research has been
conducted to evaluate whether postretirement psychological and behavioral development follows the normative life
stage hypothesis (i.e., that in later life stages, individuals
3

Figure 1
Longitudinal Progression of the Retirement Process and Potential Impact Factors

Note. From Employee Retirement: A Review and Recommendations for Future Investigation, by M. Wang & K. S. Shultz, 2010, Journal of Management, 36, p.
182. Copyright 2010 by Southern Management Association.

move to activities and roles that involve less responsibility


to others and less rigorous physical effort; Super, 1990). To
date, however, empirical findings suggest that the psychological and physical demands associated with retirees reorganizing of their activities and time structures to achieve
adjustment gradually decrease over time (e.g., van Solinge
& Henkens, 2008), and their psychological well-being
gradually increases over time (e.g., Wang, 2007).
Industrial/organizational (I/O) psychologists have also
studied retirement, focusing on how preretirement employment-related psychological factors shape the retirement
process. For example, the extent to which retirees identify
with their work roles has been shown to be related negatively to retirement transition and adjustment outcomes
(e.g., Quick & Moen, 1998), whereas work stress, psychological and physical job demands, job challenges, and job
dissatisfaction (e.g., Shultz, Morton, & Weckerle, 1998;
van Solinge & Henkens, 2008; Wang, 2007) have been
shown to be positively related to retirement transition and
adjustment outcomes. I/O psychologists have also viewed
employee retirement as analogous to organizational withdrawal behaviors such as turnover, showing that job burn4

out, work centrality, and commitment to various facets of


work are unique predictors of retirement decisions (e.g.,
Bidewell, Griffin, & Hesketh, 2006). Another unique contribution of I/O psychology to retirement research is its
incorporation of organizational factors into its understanding of retirement processes. For example, organizational
climate and culture may influence employees expectations
about retirement and their retirement decisions (Feldman,
1994). Specifically, whether the organization treats older
workers with respect and dignity and values their experience and wisdom would largely influence the retirees
motivation to stay on the job (Finkelstein & Farrell, 2007).
More recently, I/O psychologists have turned their
attention to studying antecedents and outcomes of retirees
bridge employment decisions. Bridge employment represents a transition phase in which older workers are beginning to disengage psychologically from labor force participation but are not yet ready to begin life as retirees with no
work responsibilities (Wang et al., 2009). I/O psychologists
see bridge employment as offering opportunities for organizations to maintain critical talent and achieve successful
knowledge transfer to younger employees; it may also lead
April 2011 American Psychologist

to positive adjustment outcomes for retirees in their postretirement life. Research by I/O psychologists has shown
that beyond demographics, health, and financial attributes,
job-related psychological variables (e.g., job attitudes and
work role stressors) are important predictors of bridge
employment decisions (e.g., Pengcharoen & Shultz, 2010;
Wang et al., 2008) and that engaging in bridge employment
may be beneficial for retirees physical and mental health
(e.g., Zhan et al., 2009).
Vocational psychologists have also brought a unique
perspective to the study of retirement. As might be expected, there is a strong focus in their research on retirees
vocational skills and abilities, types of preretirement careers, career-specific norms, and postretirement career
changes. For example, retirees who have adequate career
knowledge and skills to function across different job roles,
organizational hierarchies, and national boundaries may
thrive in the current business environment, because they fill
the exact need for substantial speed and flexibility in responding to intensely competitive market forces produced
by the global economy (AARP, 2005). Consequently, these
retirees are likely to enjoy better postretirement workrelated activities because they have more autonomy and
control of these activities and thus are likely to experience
less work-related stress (Zhan et al., 2009).
Different types of preretirement careers and careerspecific norms have also been shown to be important factors influencing individuals retirement planning and decision making. For instance, if a persons career is important
to his or her self-identity and there is high commitment to
the specific career role, it is less likely that the person will
retire from his or her career job (Adams & Beehr, 1998).
Settersten and Hagestad (1996) reported that career norms
regarding appropriate retirement ages produce pressures on
older workers with regard to their retirement preferences
and plans. Specifically, those individuals who are behind
schedule with regard to their career advancement or who
have plateaued in their careers are more likely to feel
pressure to retire.
Finally, clinical and counseling psychology has
tended to focus more on studying how to help retirees
prepare before entering retirement and have a more successful adjustment to the changes created by the decision to
retire. Many individuals are genuinely ready to retire, resolve the retirement process well, and retire in a positive
way. However, some individuals feel ambivalent about
retirement and may become depressed and experience feelings of loss, idleness, and uselessness. Thus, clinical and
counseling psychologists can help these individuals make a
more successful transition to retirement. For example, in
studying financial planning for retirement, Hershey, Jacobs-Lawson, McArdle, and Hamagami (2007) found that
improving older workers psychological goal clarity regarding retirement financial planning and their self-efficacy
in handling investments could lead to desirable financial
planning outcomes. Taylor-Carter, Cook, and Weinberg
(1997) showed that both formal and informal preparation
for retirement increased prospective retirees confidence in
their abilities to make the retirement transition.
April 2011 American Psychologist

In addition, research following a clinical and counseling psychology perspective has shown that an individuals
marital relationship has an important influence on retirement adjustment outcomes. Retirees with happier marriages are more likely to achieve better transition and
adjustment outcomes (e.g., Rosenkoetter & Garris, 1998).
In addition, losing a partner during the retirement transition
was found to have a negative impact on retirement satisfaction (van Solinge & Henkens, 2008). One important
conceptualization from the clinical and counseling psychology perspective regarding retirement adjustment (e.g.,
Goodman, Schlossberg, & Anderson, 2006; Schlossberg,
1981) is that adjustment is reached when individuals are
not preoccupied with the retirement transition but are comfortable with the changed circumstances of their lives in
retirement. In other words, retirement adjustment is
reached when retirees are able to integrate retirement into
their lives. This conceptualization has been very influential
in guiding researchers in operationalizing retirement adjustment and investigating it in the dynamic adjustment
process (e.g., van Solinge & Henkens, 2008; Wang, 2007).

Psychological Conceptualizations of
Retirement
Now that we have reviewed psychologys unique contributions to retirement research, it is important to synthesize
psychological conceptualizations of retirement that have
guided the application of psychological perspectives to the
study of retirement. Providing a conceptual taxonomy is
critical, because theoretical conceptualizations have an impact on how researchers describe the concept in question
and in turn ground their study in relevant knowledge frameworks that lay the foundation for tackling specific research
questions (Wang & Shultz, 2010). Specifically, we discuss
three types of conceptualizations (cf. Wang & Shultz,
2010) that best accommodate the psychological view of
retirement: retirement as a decision-making process, retirement as an adjustment process, and retirement as a career
development stage.
Conceptualizing retirement as a decision-making process emphasizes the psychological underpinnings that impact retirement as a motivated choice behavior. This conceptualization contends that when workers decide to retire,
they choose to decrease their psychological commitment to
work and to behaviorally withdraw from work (e.g., Feldman, 1994). According to this conceptualization, after
workers make the decision to retire, their work activities
should begin to decline over time, and other life activities,
such as family and community-related activities, should
increase. However, not all individuals will follow this path,
and not all retirees will be successful at accomplishing this
transition. Although this hypothesis has received mixed
empirical support (Wang & Shultz, 2010), it highlights the
importance of the retirement decision as a major life event
(Adams & Beehr, 1998).
When conceptualizing retirement as a decision-making process, researchers have typically relied on the informed decision-making approach to conduct their inves5

tigations. This approach assumes that older workers make


their retirement decisions on the basis of information they
have regarding their own characteristics and their work and
nonwork environments. They weigh these factors and evaluate the overall utility of retirement before they make the
decision to retire. According to this approach, many psychological factors may be at play in shaping this decision.
For example, older workers perceptions about the work
environment, their need and value preferences, and their
information-processing and social comparison styles may
all play critical roles in reaching the decision to retire.
Conceptualizing retirement as an adjustment process
provides a broader and more dynamic psychological approach to understanding retirement (Wang et al., 2009).
Specifically, this conceptualization views retirement as incorporating both the transition from employment to retirement and the trajectory of individual development in postretirement life. According to this view, first, it is not the
decision to retire but the characteristics of the retirement
transition process embedded in this decision that are important (van Solinge & Henkens, 2008). In other words,
people may make the same decision to retire, yet the timing
of the decision, the previous preparation for the decision,
the resources associated with the decision, and the amount
of the activity change caused by the decision may be very
different or have different psychological meanings for different individuals. Therefore, conceptualizing retirement as
an adjustment process emphasizes investigating the psychological nature of retirement rather than the simple decision content.
Second, this conceptualization recognizes retirement
as a longitudinal developmental process characterized by
adjustment styles and tendencies, which provides a more
realistic depiction of retirement and guides the selection
and investigation of psychological outcomes of retirement
(Wang, 2007). In particular, recognizing that this adjustment process could have different psychological implications for retirees at different time points opens new windows to understanding the dynamic nature of the retirement
process.
Retirement can also be conceptualized as a late career
development stage, based on the protean career model that
argues that careers are controlled by the workers themselves and reflect their own personal values and goals
(Hall, 2004). Specifically, instead of viewing retirement as
a career exit, this approach recognizes the continued potential for growth and renewal during retirement. As such,
this conceptualization pays particular attention to how retirees align their career goals with their work and leisure
activities in retirement life and emphasizes examining
unique psychological factors that are associated with retirees career potential and career pursuit, which may inform
retirees workforce participation activities and patterns after they retire (Shultz & Wang, 2008). Thus, the research
question considered by those conceptualizing retirement as
a career development stage centers on retirees agency and
efficacy in keeping and pursuing their growth and renewal
needs. Consequently, this conceptualization is mostly adopted by those retirement studies that aim to investigate
6

and understand bridge employment and work behaviors in


retirement life.
On the basis of psychologys contributions to the
study of retirement and the existing psychological conceptualizations of retirement we discussed above, we feel that
the central approach for applying the psychological perspective to studying retirement is threefold. First, the psychological perspective emphasizes studying retirement as a
coherent process that unfolds over time from one phase to
another. This perspective has been reflected in the contributions made by life span developmental psychologists
(e.g., van Solinge & Henkens, 2008; Wang, 2007), I/O
psychologists (e.g., Bidewell et al., 2006; Feldman, 1994),
vocational psychologists (e.g., Settersten & Hagestad,
1996; Zhan et al., 2009), and counseling and clinical psychologists (e.g., Goodman et al., 2006; Rosenkoetter &
Garris, 1998) discussed earlier. It is also reflected in all
three psychological conceptualizations of retirement discussed above.
Second, the psychological perspective emphasizes
studying the behavioral and psychological antecedents and
outcomes of retirement as well as the psychological mechanisms that underlie the retirement process. This perspective positions psychologists to study both inter-individual
and intra-individual differences during the retirement process. It complements and is distinguished from the approaches of other social science disciplines (e.g., economics and sociology) because those approaches largely view
retirement phenomena as the result of economic or social
dynamics and thus are not able to provide insights at the
micro/individual level.
Third, the psychological perspective emphasizes
studying the interaction between retirees and their environment. Specifically, as reflected in all three psychological
conceptualizations of retirement discussed above, the psychological perspective acknowledges the fact that retirees
can actively shape their experiences in retirement. As active selves, retirees reflect on and evaluate their experiences in retirement. Moreover, they are able to modify their
environment to shape their retirement experiences. Therefore, the psychological perspective emphasizes considerations about retirees willingness and confidence (e.g.,
agency and efficacy) and behavioral tendencies (e.g., proactive behaviors) in influencing their retirement environment. Further, the psychological perspective also accommodates the effect of dynamic changes in the retirement
environment. It recognizes that changes in the retirement
environment may facilitate or constrain certain retirement
experiences. Retirees have to adapt themselves accordingly
to the changing retirement environment in order to maintain physical, functional, and psychological well-being
(Zhan et al., 2009).
Linking Psychological Conceptualizations to
Studying the Changing Nature of Retirement
The changing nature of work, careers, families, and the
organization of work has an impact on how retirement is
enacted (Shultz & Olson, in press; Shultz & Wang, 2008).
With regard to the changing nature of work, it is on the
April 2011 American Psychologist

whole becoming less physical but more psychologically


dynamic. Whereas the less physical nature of todays jobs
allow individuals to work longer, thus delaying retirement,
tighter deadlines, higher expectations for longer work
hours, and the need for near constant retraining and updating produce a dynamic workplace that can be stressful,
particularly for older workers (Barnes-Farrell, 2005;
Shultz, Wang, Crimmins, & Fisher, 2010). As a result, we
see people today retiring at much earlier ages than just a
half century ago (Alley & Crimmins, 2007). To study these
earlier retirement phenomena associated with the changing
demands of work, it may be particularly relevant to conceptualize retirement as a decision-making process. For
example, it will be important to study how older workers
perceive and evaluate their work demands and work environments in making their retirement decisions. In particular, it will be interesting to consider the decision-making
trade-offs between the uncertainty associated with retiring
early and the psychological burden associated with stressful work demands.
In addition, work careers are changing in ways that
may impact how retirement is enacted (Shultz & Wang,
2008). For example, in the past 20 years, there has been a
continuous trend for workers to move away from the traditional linear career progression that was dictated primarily by the organization and focused on organization-based
rewards such as promotions and pension qualifications. As
such, workers are experiencing more disjointed career
paths as well as changing jobs and career paths multiple
times in the course of their work lives (Wang et al., 2009).
Consequently, we are seeing untraditional career models
(e.g., the protean career model) take prominence, models in
which workers are responsible for the self-management of
their careers, including deciding when to retire and what
form their retirement will take (Hall, 2004). To study these
retirement phenomena associated with various career paths,
it may be fruitful to conceptualize retirement as a late
career development stage. Accordingly, how retirees prepare for this career stage, adjust their career goals corresponding to their needs, and consider different career
moves after entering retirement are important issues to
examine.
Changing family structures are also impacting retirement patterns and experiences. For example, more couples
are working to time their retirements so as to retire at about
the same time (Hutchens & Dentinger, 2005). In addition,
many women are delaying child rearing and parents are
living longer, so many older workers, particularly women,
are sandwiched between the demands of both child care
and elder care (Neal & Hammer, 2007). Several studies
have shown that there are clear gender differences in how
men and women are likely to cope with these competing
demands toward the end of their careers. For example,
Barrah, Shultz, Baltes, and Stolz (2004) found that women
were more likely to seek new employment or retire when
elder care demands became overwhelming, whereas men
were more likely to adjust their schedules, thus allowing
them to continue working in the same job while tending to
increased elder care demands. Therefore, the changing
April 2011 American Psychologist

family structure directly impacts peoples retirement decision making, and gender presents an important boundary
condition of this impact. As such, it will be interesting to
study how people weigh their family-related retirement pull
(e.g., enjoying more time with family) and push (e.g.,
having less flexibility for elder and child care because of
employment) factors in making retirement decisions.
The organizational environment in which peoples
jobs are embedded is also changing in ways that will
influence the enactment and experience of retirement. For
example, jobs are becoming less secure, with persistent
downsizings by corporations. Also, employers have
steadily shifted from defined benefit pension plans with
guaranteed pension benefits to defined contribution (e.g.,
401k) plans and are less likely to offer retiree medical
benefits. As a result, workers have had to bear much more
risk with regard to funding their retirement. These changes
in organizational policies impose new challenges to understanding retirees adjustment process. For example, it is
important to identify the resources different groups of
retirees rely on to accomplish their psychological transition
from employment to retirement smoothly and effectively
(Wang, 2007).
At a broader level, government and employer policies
toward older workers were pro-retirement (i.e., provided
disincentives to work at older ages) for most of the 20th
century (see Table 1). However, over the last few decades,
the tide has shifted in many respects to pro-work policies
for older workers (McNamara, Sano, & Williamson, in
press). That is, older workers in most developed countries
are being encouraged to extend their work lives beyond the
traditional retirement age by local and national governments (van Dalen, Henkens, Henderikse, & Schippers,
2010). For example, Social Security in the United States no
longer has earning limits for those retirees between the ages
of 65 and 70. In addition, the age to receive full Social
Security benefits is slowly increasing from 65 to 67, while
the incentive to delay receiving Social Security benefits
until age 70 has become more financially lucrative. All
these changes in public policies are likely to influence
individuals retirement decision making and postretirement
adjustment outcomes (Shultz, 2003; Wang & Shultz,
2010). However, the financial crisis that began around 2008
may well have even more weight in encouraging older
workers to extend their careers and delay retirement because of reduced retirement savings and loss of pension
benefits. It is unclear at the current time, however, what the
long-term ramifications of the current financial crisis will
be with regard to older workers delaying their retirement.
Many of these policies have significant impact not
only because of their financial incentives but also because
of the social norm and climate that they are creating.
Employers are offering an increasing number of olderworkerfriendly options such as phased retirement, training
to maintain and update older workers skills, bridge employment, and flexible work schedules to encourage older
workers to transition out of career jobs slowly or to recruit
older workers who may be changing careers. These macrolevel changes by employers and governments are dramat7

ically altering how we think about retirement and how


retirement is carried out at both the individual and societal
levels (van Dalen et al., 2010).
In Europe, the concept of work ability has been studied for the last several decades (Ilmarinen, 2006). Work
ability addresses the ability of older workers to maintain
their employability as they age, thus allowing them more
say in both the timing of and the form that their retirement
will take. It is a balance between a persons resources and
work demands (Ilmarinen, 2009, p. 61). Given the recent
shift in much of the developed world from a pro-retirement to a pro-work perspective with regard to older
workers, the concept of work ability should become even
more prominent in the study of work and retirement at
older ages. As Ilmarinen (2009) noted,
Work ability . . . is primarily a question of balance between work
and personal resources, attitudes, values, and so forth. . . . Personal resources change with age, for example; and, with globalization and new technology, work demands also change. The
factors affecting work ability are therefore continuously changing
and must be balanced. (p. 62)

We expect that this dynamic nature of work ability


may render it an important psychological construct to consider when studying the dramatic changes in how retirement is enacted and carried out for most individuals in the
21st century.

Future Research Directions


The process of retirement has become more blurred over
time, to the point that researchers are unable to agree on a
single definition of what constitutes retirement (Denton &
Spencer, 2009). As a result, it is clear that psychological
conceptualizations of retirement are needed to better understand the changing nature of retirement. Below we
provide suggestions in three areas particularly relevant for
psychology: (a) examining retirement as a longitudinal
progression over multiple phases, (b) taking the voluntary
versus involuntary nature of retirement into account, and
(c) viewing retirement as an additional career stage.
For each of the major retirement phases depicted on
the right side of Figure 1, Wang and Shultz (2010) outlined
the key issues that past researchers have addressed to
varying degrees. However, few studies have encompassed
major portions of this longitudinal retirement process, instead focusing on a narrow cross-section or point in time.
Further, few studies have examined the interdependence
among these phases (e.g., how these stages influence one
another and how they together influence the long-term
outcomes of retirement). For example, although many studies have examined the antecedents of general retirement
planning and different aspects of retirement planning (e.g.,
Hershey et al., 2007), there is a lack of research on the
long-term influences of retirement planning on retirement
adjustment. It is possible that retirement planning not only
impacts the decision to retire and/or decisions with regard
to bridge employment participation but may also influence
8

the trajectories of retirees retirement adjustment. In addition, different specific aspects of planning may influence
different types of long-term outcomes, which deserve more
research attention.
Another important issue to consider is that not all
retirement decisions are voluntary (e.g., Shultz et al., 1998;
Szinovacz & Davey, 2004; van Solinge & Henkens, 2008).
Thus, if we conceptualize retirement as a decision-making
process, we have to recognize that the theoretical utility of
this conceptualization depends on the extent to which the
retirement decision is a result of personal choice. If the
personal choice component is missing, then the informed
decision-making approach would not apply. Therefore, the
voluntariness of the retirement decision can be viewed as a
boundary condition for applying the informed decisionmaking approach in testing predictors of retirement decision. Similarly, if we conceptualize retirement as an adjustment process, the extent to which the retirement is
voluntary may also have an important influence on retirees
adjustment outcomes. Previous research has shown that
involuntary retirement usually leads to negative attitudes
toward retirement (e.g., Shultz et al., 1998). However,
whether involuntary retirement leads to long-term maladjustment issues is still unknown.
Furthermore, Wang et al. (2009) and Shultz and Wang
(2008) have discussed how retirement is becoming an
additional stage in workers careers. That is, retirement is
no longer seen as the end of ones working life but rather
is viewed as an opportunity to continue ones work life in
a different venue and/or form. There is thus a shift from
looking at the retirement transition process broadly to examining the postretirement trajectory (i.e., individual development in postretirement life; Wang & Shultz, 2010).
For example, several individuals may make the same decision to retire from their career jobs; however, if their life
circumstances, psychological planning, financial resources,
and other contextual characteristics are different, then how
their retirement from career employment plays out may be
very different. For example, one person may decide to
slowly phase out of her career job by reducing work hours
and/or responsibilities. Meanwhile, another person may
engage in an encore career that may or may not be similar
to the previous career employment that person held,
whereas another older worker may decide to stop paid
employment altogether to focus on family caregiving
needs.
Finally, the concept of work ability, discussed earlier,
is also particularly relevant to the issue of continued employment options for older workers who may retire from
their career jobs. Although the framework of work ability
has been applied mostly in Europe, it is clearly relevant to
the United States as well. Unless older workers possess the
functional capacities, competence, and values needed to
meet the increasing demands of todays jobs, they will have
little say in their postretirement activities, particularly with
regard to continued employment in some form. However,
work ability is a function of the correspondence between
the older workers resources and the work demands present
in the workplace. As a result, poor work ability can also be
April 2011 American Psychologist

a result of poor management or of workplace demands that


may be unrealistic for older workers (Ilmarinen, 2009).
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