How Do Intentions Affect Future Retirement? A Case Study of the Finnish Flexible Old-Age Pension Scheme

Abstract

The aim of this study is to examine the factors that impact on older employees in their plans to continue at work or to retire, and to find out to what extent retirement plans are actually realised. The frame of reference for the study is Beehr's model (1986) of the retirement process. It consists of three stages: retirement preferences (thoughts about retirement), retirement intentions, and retirement outcomes. In this study, two stages of Beehr's model have been examined: retirement intentions and realised retirement. Retirement figures from the register data showed that people have retired somewhat later than they planned. Slightly more than half of the older employees retired when they intended, a third retired later, and a small proportion retired earlier than they intended. Intentions to continue working longer were explained by many personal and work-related factors, most of which are consistent with earlier studies on retirement plans, whereas realised retirement was largely explained by work-related factors. The centrality of work, a short working career and financial incentives to continue working were the best predictors of late retirement. With reference to Beehr, we conclude that different factors are emphasised as explanatory variables at different stages of the retirement process.