When clients seek advice about retirement, the first thing they usually want to know is how much money they’ll need to support a comfortable lifestyle. But perhaps a better consideration is when they want to retire – and why.

Choosing the best age to retire is a big decision – and one that’s likely to be different for every client. Some may be intending to work well into their golden years, while others may be keen to lose the shackles of nine-to-five as soon as they can.

There are pros and cons for each – and the optimal retirement age will depend on factors including their lifestyle expectations, financial position, health, occupation type and attitude. And of course, not everyone gets to make the choice when to retire – with some people forced out of work earlier than planned due to redundancy or ill-health. In 2018-19, 20% of retirees left due to sickness, injury or disability, while 11% were retrenched, dismissed or couldn’t find work1.

Others may find that retirement is not what they’d hoped, and may find themselves wanting to get back into work. This could be driven by financial reasons, or a lack of purpose outside the structure and direction of working life. According to a retirement intentions survey conducted by the Australian Bureau of Statistics (ABS), of those who had previously retired, but returned to the workforce, around a third had done so for financial reasons, while another third were simply bored and needed something to do2.

So how can you help your clients to strike the right balance when considering the ‘perfect’ time to call it quits?

The right time is about more than finances

As part of an Australian Research Council (ARC) Linkage project, through Macquarie University and supported by Allianz Retire+, Professor Joanne Earl and Honours student Isaac Dunn investigated the reasons influencing the right time to retire. Their aim is to positively impact retirees in the future and explore the role advice plays.

Informed by a larger scale meta-analysis research project by Gabriela Topa5, Professor Earl and Dunn investigated the psychological factors that play into the decision to leave the workforce. –They say that understanding these can help people consider their situation with greater clarity.

Professor Earl explains that the research looks at health, wealth, social, cognitive, emotional and motivational factors contributing to retirement outcomes and wellbeing. “Most people already know finances are important,” she says. “But health is paramount because it helps us to choose an optimal time to leave work and dictates the quality of life a person will have in retirement.”

ABS data supports this. It suggests that while financial security is the number-one driver for retirement, other common factors are3:


  • Having reached retirement age or are eligible to draw down their super.
  • Having health issues – a sickness, injury or disability.
  • Being retrenched, dismissed or there’s no work available.
  • Needing to care for an ill, disabled or elderly person.
  • Working a temporary, seasonal or holiday job.

How workplace stress is a driver

Workplace stress can be another reason people might re-evaluate their retirement date. Long hours, no work-life balance, demanding managers and a lack of autonomy can all take a toll on a person’s mental health. A changing workplace and the pressure to meet new demands can also be unsettling for some.

People often assume that the best solution to workplace stress is to leave. But there might be other options to consider before handing in a resignation. For example, there could be an opportunity to negotiate boundaries, workload or working conditions.

But if someone does decide to leave, self-employment could be an option. This way of working can put your clients back in control of their working conditions. However, some may find themselves back where they started – overwhelmed with stress.

Equally, being under-employed or unemployed can be detrimental to a person’s feelings of self-worth, and cause a great deal of financial stress.

On the other hand, how much a person enjoys their work can be a good predictor of their retirement date. Job satisfaction and a self-identify that’s tied to work can play a big role in how much effort people put into planning and preparing for their retirement as well as staying at work for longer.

People who enjoy their work may want to continue in their roles indefinitely. And, depending on the type of work, this may not be an unrealistic goal. Doctors, for example, have been found to strongly identify with their professional identity, tending to delay retirement and avoid thinking about it at all.

The impact of COVID-19 and family factors

The COVID-19 pandemic is also playing a role in retirement decisions, as organisations restructure and adapt to a changed economic landscape. This is giving some older employees the opportunity to review their future – and a redundancy package is often too good to refuse.

But while a lump sum to wipe off the mortgage might liberate a person from financial stress in the short term, without sound financial advice to help it last the distance of a long retirement, this decision might not be as positive as first thought.

Another reason people may want to retire is to spend more time with their already retired partner, or with their children or grandchildren. During their career, they may have spent less time with their family than they would’ve liked. Now they see the opportunity to make amends with the next generation.

In this case, it’s important to be realistic about how great a role they will play in the lives of busy grandchildren. Between school and extra-curricular activities, how much time is available to catch up? Does it warrant taking a full retirement?

The importance of preparation

It’s not uncommon for clients to struggle to clearly identify and weigh up the key reasons behind their retirement decision. A study by Dunn through Macquarie University saw 297 participants from the public service and super funds reflect on their own retirement decisions. Then, using the five predictors outlined below, Dunn evaluated how retirement preparation programs such as self-reflection and experimental evidence might change their plans4.

The five early retirement predictors he used were:

  • When work colleagues retire.
  • Pressure from the organisation (through policy or leadership).
  • Family pull factors.
  • Job stress.
  • Job satisfaction.

The study showed that a 20-minute self-reflection resulted in:

  • 48% of super fund members re-evaluating how certain they were about their retirement plans.
  • One in five becoming less certain in their retirement plans.
  • More than 15% updating their retirement plans with a new age to retire.

These results highlight that preparation is important when making informed retirement decisions – and advisers can play a crucial role.

Choice or circumstance: A plan is essential

For some, work is a means to prepare for and support a comfortable lifestyle in retirement. For others, a career is a fulfilling and purposeful pursuit on its own. But whether a client gets to choose when they retire, or if it happens by circumstances beyond their control, advisers can help to ensure they are prepared.

By building awareness of risks, redundancy, health and lifestyle changes and bringing these into the retirement planning process, advisers can help their clients to build resilience and improve their decision-making abilities.

In this way, the value of advice simply can’t be underestimated in mitigating the consequences of a too early – or too late – retirement.

1ABS, Retirement and Retirement Intentions, Australia, 2018-19, May 2020.
2ABS, Retirement and Retirement Intentions, Australia, 2018-19, Table 12, May 2020.
3ABS 6238, Retirement and Retirement Intentions 2018-2019. Should be: ABS, Retirement and Retirement Intentions Australia, 2014-15
4Isaac B Dunn, Workplace Exit: Cause for Reflection, Macquarie University
5Early Retirement: A Meta-Analysis of Its Antecedent and Subsequent Correlates – Gabriela Topa – January 2018