For many Australians, retirement has a date attached to it long before it arrives. It might be the age when superannuation can be accessed, the age a parent stopped work, or simply a number that has always felt right. But research suggests that staying in work a little longer, or easing out of it gradually rather than stopping all at once, may bring benefits that go beyond the extra income.
The evidence is not one-sided. For some people, retiring is the healthier choice, and the studies use different methods to investigate the effects. None establishes a rule that applies to everyone. Still, for anyone weighing up when to finish, the research offers some useful points to consider.
When Australians actually retire
According to the Australian Bureau of Statistics’ 2024–25 retirement and retirement intentions release, about 156,000 people aged 45 and over retired during that period, at an average age of 63.8. Across all retirees, including people who had stopped work many years earlier, the average age at retirement was 57.3. These figures describe different groups, rather than one standard retirement age.
People aged 45 and over who intended to retire expected to do so, on average, at 65.6. Among retirees, the most common reason for leaving their last job was reaching retirement age or becoming eligible for superannuation, at 33%. For 13%, it was their own sickness, injury or disability. Financial security was the main factor influencing the timing for those intending to retire.
Those figures show that retirement timing reflects a mixture of finances, health, eligibility rules and personal circumstances. They cannot tell any individual which retirement age will suit them best.
An extra year, a lower risk
One of the most widely reported studies on working longer came from Oregon State University in 2016. Researchers led by Chenkai Wu used data from the US Health and Retirement Study, which has followed thousands of older Americans since 1992. They focused on 2,956 people who had retired by 2010 and compared when they stopped work with how many died during the study period.
In the original paper in the Journal of Epidemiology and Community Health, a one-year-later age at retirement was associated with an 11% lower mortality hazard among people who said health was not an important reason for retiring. That category did not necessarily mean they were free of illness. For those who said health was a reason for retirement, the corresponding figure was 9%. These are relative estimates from a statistical model, not guaranteed benefits from working another year, and they were not limited to work after age 65.
The authors were careful to say that the study shows an association, not proof that working longer adds years to life. People who keep working may simply be those who are able to, and declining health can push people out of work while also shortening life. The researchers also noted the results “may not apply to everybody.”
Keeping the mind busy
Another line of research looks at memory. In a 2010 paper titled “Mental Retirement,” researchers Rohwedder and Willis compared memory test results for people aged 60 to 64 in the United States, England and 11 European countries. Participants were asked to recall a list of 10 words immediately and again about 10 minutes later.
In the original paper, countries where more people in this age group had already retired tended to have lower average memory scores. The researchers went beyond this simple comparison: they used differences in pension-eligibility rules between countries to estimate retirement’s effect on memory, aiming to reduce the problem that declining health or memory can itself lead people to retire.
Their analysis suggested that retirement could contribute to lower memory performance, perhaps by changing people’s incentives and opportunities to stay mentally engaged. But that interpretation depends on assumptions about how pension rules affect memory and whether other country differences are adequately accounted for. It does not show that paid work is the only way to remain mentally active, or that an individual will lose memory by retiring.
Easing out rather than stopping
For many people, the choice is not simply between working full-time and stopping completely. A study published in 2009 in the Journal of Occupational Health Psychology looked at what researchers call bridge employment: part-time work, self-employment or temporary jobs taken after a main career ends.
The study, by Zhan, Wang and colleagues, drew on the same US Health and Retirement Study, following 12,189 people who were aged 51 to 61 when it began, over six years. According to the American Psychological Association’s release, retirees who took up bridge work had fewer major illnesses and fewer difficulties with everyday physical tasks than those who retired completely, even after taking account of their health before retirement, their age, education and wealth.
The type of work mattered. People whose bridge jobs were related to their previous careers also reported better mental health than full retirees. Those who took jobs in a completely different field did not show the same mental health benefit, which the researchers suggested may reflect the stress of adapting to a new kind of work. People with money problems were more likely to end up in unrelated jobs, perhaps out of necessity rather than choice.
That finding may be the most practical of all. On this evidence, staying in a familiar field, perhaps on reduced hours or in a smaller role, may offer more than starting over in something unfamiliar purely for the income.
The case for stopping
None of this means retirement is bad for everyone. Peter Eibich’s 2015 study in the Journal of Health Economics used German pension incentives and the change in retirement rates around eligibility thresholds to estimate retirement’s causal effects. This approach, called a regression discontinuity design, found improvements in self-reported health and mental health, alongside reduced outpatient healthcare use. Reduced work-related strain, more sleep and more frequent exercise were proposed as mechanisms. The findings concern the people and retirement circumstances captured by that design, rather than every retiree.
The two sets of findings are not as contradictory as they look. Work can be a source of purpose, routine and social contact, but it can also be a source of stress, long hours and physical strain. Which of those dominates depends on the job and the person. Someone in demanding physical work, or in a role that has become a daily source of strain, may well be healthier for leaving it. Someone whose work provides interest and company may lose something important by stopping abruptly.
What to weigh up
Taken together, the research suggests a few questions worth asking before settling on a date. Is the work itself still satisfying, or mainly a strain? Would part-time hours or a smaller role in the same field be possible? If work stops, what will replace the structure, mental challenge and social contact it currently provides? And is the timing being driven by a considered choice, or simply by reaching a particular birthday?
Money matters too, of course, and decisions about superannuation, the Age Pension and when to stop work have long-term consequences. This article offers general information only. Anyone making those decisions is best to speak with a licensed financial adviser, and anyone whose health is affecting their work should talk it through with their GP.
What the research cannot say
The studies do not all offer the same kind of evidence. The mortality and bridge-employment studies follow people over time and adjust for measured differences, but healthier people may still be more able to keep working. The memory and German health studies use pension-policy differences to try to estimate causal effects. Those methods go beyond simple correlations, but depend on assumptions and do not reproduce a randomised experiment. Most of the evidence also comes from the United States and Europe, where pension systems and working conditions differ from Australia’s.
What the evidence does suggest is that retirement need not be a single moment. For people who enjoy their work and are able to continue, staying on a little longer, or stepping down gradually, may be worth considering. For others, stopping may be exactly the right decision. The research supports making that choice deliberately rather than by default.
Photo: Tima Miroshnichenko / Pexels
