Does gradual retirement have better outcomes than abrupt retirement? Results from an Australian panel study Academic Article uri icon


  • ABSTRACTConventional wisdom promotes gradual retirement rather than an abrupt end to the working life. This paper compares the outcomes of abrupt and gradual retirement one and three years after the transition to retirement began using data from an Australian panel study. The outcomes included changes in health, positive and negative affect, wellbeing and marital cohesion. For many outcomes there was no difference between gradual and abrupt retirements, but those who retired abruptly were more likely to rate their health as having deteriorated and more likely to report better adjustment to retirement. Control over retirement decisions was also explored; it emerged as a more important factor in retirement wellbeing than whether the transition was gradual or abrupt. The absence of interaction or additive effects between the retirement pathway and the level of control over the process confirmed this result. Thus there is no simple answer to the question in the title. Retiring gradually allows time for people to make changes to their lifestyle, but having control over the timing and manner of leaving work had a greater positive impact on psychological and social wellbeing, and this persisted three years after retirement. The findings suggest that policies and employment practices that promote employees' control of their retirement decisions will enhance wellbeing in later life and facilitate longer workforce participation.

publication date

  • September 2007