Are Retirement Decisions Driven by Personality?

New research finds that fewer than 40% of American workers follow the “standard” pattern of retiring directly and completely from a full-time job. But you might be surprised to find the impact that personality traits had on that decision.

The study, by RAND, found that some transition to part-time work (13.6% of respondents in the study sample), while others leave the workforce and subsequently reenter it (16.9%). While about a quarter (25.7%) remain in part- or full-time jobs past age 70, fewer than half of these (9.8% of the total sample) stay in full-time positions.

The study included an examination of the role of cognitive abilities and five personality traits (such as extroversion, neuroticism and conscientiousness), and found that seniors with better cognitive ability (as measured by an assessment emphasizing working memory) were more likely to follow nonstandard retirement paths: 59.1% of those with high cognitive ability had jobs after age 65, while only 51.6% of those with low cognitive ability did. The researchers also noted that high scorers also were more likely to stay in the workforce after age 70, in part- or full-time work.

After the researchers controlled for other possible factors, they found that extroverts were more likely to follow “nonstandard” paths and work after age 65. On the other hand, they appeared more likely to move into part-time jobs without retiring fully by age 70.

Those scoring higher on agreeableness and those scoring lower on conscientiousness tended to leave the workforce sooner, although the researchers noted that those effects were weaker and less consistent.

Not surprisingly, individuals’ health status and economic preparedness were also “strong predictors” of retirement, and the researchers note that a traditional retirement path (retiring fully from a full-time job) was most common among those who had access to defined benefit pensions.

The report concludes by acknowledging that more research is needed to understand the links between psychological factors and work-to-retirement pathways, as well as how these links vary by occupations and other work characteristics, the findings may be helpful in informing policies to help people work longer.

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