From plans to action? Retirement thoughts, intentions and actual retirement: an eight-year follow-up in Finland

Abstract This study applies Feldman and Beehr's three-step model to examine retirement as a decision-making process leading from retirement thoughts to retirement plans and from retirement plans to actual retirement. The results show that retirement thoughts have a clear independent effect on retirement plans as measured by intended retirement age. Furthermore, retirement plans have an isolated effect on retirement patterns. Intended retirement age is the strongest predictor of actual retirement age. Retirement intentions can be thought to represent the effect of unobservable characteristics on retirement, such as preference and motivation. Retirement plans materialise with quite high accuracy. Several key factors are associated with intended and actual retirement age in a similar manner. Unemployment and higher income are connected with earlier planned and actual retirement. Health has a pronounced effect: better health is conducive to later retirement while weaker health (sickness absences) is conducive to earlier retirement. This applies both to retirement intentions and actual retirement and to the difference between the two. The most important way for organisations to extend working lives is to look after the health of older employees. Giving older workers an increased sense of control and lowering job demands helps to prevent premature retirement. Supporting older workers’ continued employment is significant for the retention of older workers, while layoffs targeting older workers shorten working lives.