Motivation and emotion/Book/2026/Retirement motivation

Retirement motivation:
What motivates retirement from work?

Overview

More money, or more life?

Imagine you are nearing retirement age. You have always worked hard, built a secure career, and rarely thought about retirement. Then your family asks: “When do you actually want to retire?”

You realise you have never really considered it.

You start looking into your options, but the process feels overwhelming. You could keep working for several more years and build greater financial security, but what are those extra years worth? This dilemma reflects the trade-off between greater financial security and greater freedom in retirement (see Figure 1). More savings could mean more financial freedom later, but retiring sooner could mean more time now, to travel, spend time with family, pursue interests, and simply have control over your days.

You begin to wonder: Is working longer for more money worth postponing the freedom you could have today?

And perhaps the hardest question: Why didn't I start thinking about this sooner?

Retirement is not simply an economic decision; people must weigh financial security against psychological, social, health, and emotional considerations.
Work can provide income, social relationships, purpose, structure, autonomy, competence, and a valued identity, meaning that leaving employment may involve both gains and losses.
Retirement decisions are therefore influenced by individual circumstances and motivations, making retirement timing highly variable between individuals (Feldman & Beehr, 2011; Wang & Huang, 2023).

Focus questions

What factors influence people's decisions to retire?
How do psychological needs and motivation influence retirement decisions?
How does work identity affect the decision to retire?
What emotional factors influence retirement?
Why do some people continue working after they could retire?

Factors influencing retirement decisions

Retirement decisions are influenced by multiple interacting factors e.g., financial, health, work-related, social, and personal, rather than age alone (Feldman & Beehr, 2011; Wang & Huang, 2023).

Financial security and retirement readiness

Financial circumstances influence whether retirement is perceived as a realistic option, with insufficient financial resources potentially encouraging people to remain employed longer (Meng et al., 2020).
Economic incentives can operate in both directions: financial security can enable retirement, while opportunities to accumulate additional income or savings can motivate continued employment (Meng et al., 2020).
Retirement planning involves evaluating whether available financial resources will support an individual's desired lifestyle after leaving employment (Wang & Huang, 2023).

Health and wellbeing

Poor health can motivate earlier retirement, particularly when health problems make continued employment difficult (Meng et al., 2020).
Physically or psychologically demanding work may become increasingly difficult to sustain as workers age (Stevens et al., 2022).
Health and working conditions can therefore interact in retirement decision-making, with wellbeing potentially influencing both an individual's ability and desire to remain employed (Meng et al., 2020; Stevens et al., 2022).

Work and social circumstances

High work demands, low decision authority, and limited recognition can contribute to preferences for earlier retirement or exit from paid employment (Carr et al., 2015).
Autonomy, flexibility, supportive colleagues, and feeling valued can encourage older workers to remain employed (Stevens et al., 2022).
Family circumstances, relationships, and opportunities for leisure may also influence when individuals want to leave employment (Meng et al., 2020).

Psychological needs and motivation

Psychological needs and the quality of an individual's motivation can influence whether continued employment or retirement is perceived as more personally rewarding (Halvari & Olafsen, 2022; Ryan & Deci, 2000).

Self-Determination Theory

Self-Determination Theory (SDT) proposes that optimal motivation and wellbeing are supported by satisfaction of three basic psychological needs: autonomy, competence and relatedness (Ryan & Deci, 2000).
Work can provide opportunities to satisfy these needs through control and choice (autonomy), achievement and skill use (competence), and relationships with colleagues (relatedness) (Ryan & Deci, 2000).
Retirement may alter how these psychological needs are satisfied, meaning that individuals may need to develop alternative activities and relationships outside employment that provide autonomy, competence and relatedness (Halvari & Olafsen, 2022).

Intrinsic and extrinsic motivation

Intrinsic or autonomous motivation may encourage continued employment when work remains enjoyable, interesting, personally meaningful or consistent with an individual's values (Halvari & Olafsen, 2022).
Extrinsic or controlled motivation may include financial rewards, expectations or external pressures that encourage an individual to continue working even when retirement is available (Ryan & Deci, 2000; Halvari & Olafsen, 2022).
Research among workers aged 58–72 found that motivational profiles were associated with retirement-related outcomes, supporting the idea that the quality of work motivation can influence retirement intentions (Halvari & Olafsen, 2022).

Goals and values in later life

Retirement involves evaluating whether continued employment or retirement better supports an individual's current goals, priorities and desired lifestyle (Feldman & Beehr, 2011).
Goals may increasingly involve activities outside employment, such as leisure, relationships, travel or other personally meaningful pursuits, which can increase the attractiveness of retirement (Feldman & Beehr, 2011).
Retirement decisions can therefore involve a motivational trade-off between the valued outcomes provided by work and those expected from greater freedom and time outside employment (Feldman & Beehr, 2011).

Work identity and retirement

Employment can provide identity, purpose, achievement, and belonging therefore retirement can represent a psychological and identity transition as well as the end of paid employment (Bordia et al., 2020).

Work as a source of identity

Employment can become an important component of identity by providing purpose, status, achievement, social recognition and belonging (Bordia et al., 2020).
Individuals differ in how strongly they identify with their occupational role, meaning that leaving work may represent a relatively minor change for some but a substantial identity disruption for others (Bordia et al., 2020).
A strong work identity may influence retirement motivation because retiring involves relinquishing or transforming a role through which an individual has understood themselves for many years (Bordia et al., 2020).

Identity transition after retirement

Retirement requires individuals to adjust from the role of worker to a different configuration of personal and social roles (Bordia et al., 2020).
Maintaining multiple social identities outside employment may provide alternative sources of belonging, meaning and social support during retirement (Haslam et al., 2023).
Activities such as family involvement, hobbies, volunteering and community participation may help retirees establish or strengthen meaningful identities outside their former occupation (Haslam et al., 2023).

If work has defined who I am, who will I be when I stop working?

Emotions and retirement

Retirement can involve both positive and negative emotional experiences, and emotions may be relevant both when anticipating retirement and when adjusting to life after work (Ryser & Wernli, 2017; Ugwu et al., 2024).

Anticipated emotions

Retirement decisions involve thinking about future outcomes, meaning that individuals may anticipate how they expect to feel if they retire or continue working (Feldman & Beehr, 2011; Ryser & Wernli, 2017).
Retirement may be associated with anticipated positive emotions such as excitement, relief and freedom, but also negative emotions such as sadness, uncertainty or apprehension (Ryser & Wernli, 2017).
These anticipated emotional consequences may form part of the broader psychological evaluation of whether leaving employment is desirable (Feldman & Beehr, 2011; Ryser & Wernli, 2017).

Retirement anxiety

Retirement can be associated with anxiety because it involves substantial changes to familiar routines, roles, goals and life circumstances (Ugwu et al., 2024).
Uncertainty about life after work may make retirement psychologically challenging even when an individual is financially capable of retiring (Ugwu et al., 2024).
Retirement anxiety is important because retirement represents not only the end of employment but also a transition into a substantially different stage of life (Ugwu et al., 2024).

Emotional adjustment to retirement

Emotional responses to retirement vary considerably between individuals; retirement should therefore not be assumed to automatically improve or reduce wellbeing (Ryser & Wernli, 2017).
Adjustment may depend on the circumstances surrounding retirement and the individual's opportunities for satisfying activities and social participation after leaving work (Ryser & Wernli, 2017).
Successful emotional adjustment may involve establishing new routines, relationships, goals and meaningful activities that replace valued aspects of working life (Haslam et al., 2023; Ryser & Wernli, 2017).

Continuing to work after retirement age

Reaching retirement eligibility does not necessarily eliminate motivation to work; financial, psychological, social, and work-related rewards can encourage older adults to remain employed (Halvari & Olafsen, 2022; Stevens et al., 2022).

Why people choose to keep working

Continuing employment can be a positive and motivated choice rather than simply a response to insufficient retirement savings (Halvari & Olafsen, 2022).
Older adults may remain employed because work provides enjoyment, purpose, achievement, identity and social relationships (Halvari & Olafsen, 2022; Stevens et al., 2022).
Financial motivation can coexist with psychological motivation, meaning that individuals may continue working for both additional financial security and the intrinsic benefits they receive from employment (Halvari & Olafsen, 2022; Meng et al., 2020).

Job quality and continued work

The quality of work can influence whether older employees want to remain in employment rather than retire (Carr et al., 2016; Stevens et al., 2022).
Greater decision authority has been associated with preferences for later retirement, while high psychosocial demands have been associated with preferences for earlier retirement (Carr et al., 2015).
Flexibility, autonomy, supportive colleagues and feeling appreciated can make continued employment more attractive to older workers (Stevens et al., 2022).

Alternatives to full retirement

Retirement does not necessarily involve an immediate transition from full-time employment to no paid work (Feldman & Beehr, 2011).
Some older adults may prefer part-time, reduced-hours or flexible employment, allowing them to retain valued aspects of work while gaining greater control over their time (Stevens et al., 2022).
Bridge employment can provide a gradual transition between career employment and full retirement, allowing individuals to maintain some benefits of working while adjusting to retirement (Wang et al., 2008).

Conclusion

Retirement is not motivated by age alone. Decisions about when to retire emerge from the interaction between financial circumstances, health, work conditions, psychological needs, social relationships, identity, and emotions.
Motivation can operate in both directions: people may be motivated to retire to gain greater autonomy and time for valued activities, while they may also be motivated to continue working because employment provides income, competence, relationships, purpose, or identity.
Retirement should therefore be understood as a psychological transition as well as an economic decision. Planning for retirement involves considering not only whether a person can afford to stop working, but also what will give them meaning, social connection, autonomy, and purpose afterwards.
Ultimately, the most desirable retirement timing is unlikely to be the same for everyone. Understanding individual motivations and anticipated emotional experiences can help people make retirement decisions that better align with their goals and values.

Learning feature

Two Paths to Retirement

Imagine two people of the same age who have enough financial resources to retire.

Person A finds their work highly meaningful, enjoys their colleagues, and values the sense of achievement their career provides. They choose to continue working part-time.

Person B enjoys their work but increasingly values spending time with family, travelling, and pursuing interests outside employment. They choose to retire.

Learning purpose: This scenario will demonstrate that financial readiness does not determine retirement motivation on its own. Differences in autonomy, relatedness, competence, work identity, goals, and anticipated emotions can lead people with similar financial circumstances to make different retirement decisions.

Quiz Question

References

Bordia, P., Read, S., & Bordia, S. (2020). Retiring: Role identity processes in retirement transition. Journal of Organizational Behavior, 41(5), 445–460. https://doi.org/10.1002/job.2438

Carr, E., Hagger-Johnson, G., Head, J., Shelton, N., Stafford, M., Stansfeld, S., & Zaninotto, P. (2015). Working conditions as predictors of retirement intentions and exit from paid employment: A 10-year follow-up of the english longitudinal study of ageing. European Journal of Ageing, 13(1), 39–48. https://doi.org/10.1007/s10433-015-0357-9

Feldman, D. C., & Beehr, T. A. (2011). A three-phase model of retirement decision making. American Psychologist, 66(3), 193–203. https://doi.org/10.1037/a0022153

Halvari, H., & Olafsen, A. H. (2022). Will they stay or will they go? Motivational profiles, retirement-related correlates, and retirement intentions among 58–72-year-old workers. Frontiers in Psychology, 13, 807752. https://doi.org/10.3389/fpsyg.2022.807752

Haslam, C., Lam, B. C. P., Ghafoori, E., Steffens, N. K., Haslam, S. A., Bentley, S. V., Cruwys, T., & La Rue, C. J. (2023). A longitudinal examination of the role of social identity in supporting health and well-being in retirement. Psychology and Aging, 38(7), 615–626. https://doi.org/10.1037/pag0000757

Lawrence Ejike Ugwu, Wojujutari Kenni Ajele, & Erhabor Sunday Idemudia. (2024). Paradox of life after work: A systematic review and meta-analysis on retirement anxiety and life satisfaction. PLOS Global Public Health, 4(4), e0003074–e0003074. https://doi.org/10.1371/journal.pgph.0003074

Meng, A., Sundstrup, E., & Andersen, L. L. (2020). Factors contributing to retirement decisions in denmark: Comparing employees who expect to retire before, at, and after the state pension age. International Journal of Environmental Research and Public Health, 17(9), 3338. https://doi.org/10.3390/ijerph17093338

Ryan, R. M., & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. American Psychologist, 55(1), 68–78. https://doi.org/10.1037/0003-066X.55.1.68

Ryser, V.-A., & Wernli, B. (2017). How does transitioning into retirement impact the individual emotional system? Evidence from the swiss context. Advances in Life Course Research, 32, 42–54. https://doi.org/10.1016/j.alcr.2016.08.001

Stevens, M. J., Barker, M., Dennison, E., Harris, E. C., Linaker, C., Weller, S., & Walker-Bone, K. (2022). Recent UK retirees’ views about the work-related factors which influenced their decision to retire: A qualitative study within the Health and Employment After Fifty (HEAF) cohort. BMC Public Health, 22, 116. https://doi.org/10.1186/s12889-022-12541-1

Ugwu, L. E., Ajele, W. K., & Idemudia, E. S. (2024). Paradox of life after work: A systematic review and meta-analysis on retirement anxiety and life satisfaction. PLOS Global Public Health, 4(4), e0003074. https://doi.org/10.1371/journal.pgph.0003074

Wang, M., & Huang, Z. (2023). A contemporary review of employee retirement. Current Opinion in Psychology, 55, 101749–101749. https://doi.org/10.1016/j.copsyc.2023.101749

Wang, M., Zhan, Y., Liu, S., & Shultz, K. S. (2008). Antecedents of bridge employment: A longitudinal investigation. Journal of Applied Psychology, 93(4), 818–830. https://doi.org/10.1037/0021-9010.93.4.818

External links

Age Pension (Services Australia)
- Information about Age Pension eligibility, income and assets tests, and how to prepare for and claim the Age Pension.
Older Australians: Employment and work (Australian Institute of Health and Welfare)
- Australian data and information about older people's workforce participation, employment, and retirement.
Plan for your retirement (Moneysmart)
- An Australian Government resource providing practical information about retirement planning, including financial preparation, retirement timing, lifestyle goals, health, and options for continuing to work.

Retirement Standard (Association of Superannuation Funds of Australia)
- Australia’s benchmark guide helps you determine how much money you need for retirement, empowering you to make informed decisions about your future after work.

	Retirement decisions are determined primarily by age.
	People have different psychological needs, identities, goals, and emotional expectations.
	People who continue working are necessarily more motivated.
	People who retire earlier necessarily have lower job satisfaction.