Leaving your job might just be the start of something great, says a recent study from Flinders University. It found that retirement can lead to better health and happiness, partly because it gives people a stronger sense of control over their lives.

Using data from a big survey in Australia, researchers discovered that about a third of the good things that come from retiring are because people feel more in charge of their own destiny.

Working for longer

At a time when some countries are thinking about making people work longer before they can retire, this study reminds us of the benefits of calling it quits when the time feels right.

“This greater internal control explains one-third of the positive effects of retirement on health and about one-fifth of improved subjective well-being,” the researchers explain. “However, we note these positive results are heavily skewed to the less educated, people living in cities and having received welfare payments, and those with no long-term health conditions.”

We should think about what happens if people have to work longer before they retire, as it could affect their health and happiness by making them feel less in control of their lives. When people keep working past retirement age, they might start to believe that life outcomes are more about luck than their own choices and efforts.

Financial support

In Australia, a lot of retirees get financial support from the government. About 70% of retired Australians receive some form of pension from the government, making it one of the highest rates among countries in the OECD.

The study looked at how the age when people can start getting the Australian Age Pension has changed over time. For women, it went up from 60 to 67 between 1995 and 2023, and for men, it increased from 65 to 67 from 2017 to 2023.

The study looks into how people’s socio-emotional skills change as they reach the end of their working years.

While factors like locus of control can shift with retirement, other aspects of personality, such as agreeableness, conscientiousness, emotional stability, extroversion, and openness to experience, as well as risk and time preferences, and trust tend to remain more stable among older Australians when they retire.

Understanding these dynamics could guide the development of better models for future policies and frameworks, taking into account people’s preferences, expectations, and constraints, and ultimately shaping economic outcomes for the better.