No, it’s not money, although that helps. The big secret to a happy retirement is being able to proactively choose the time you leave full-time employment. 

Research reveals that this is crucial, along with mental health, enjoyment, and assured financial security in retirement. 

An Australian first study from Macquarie University’s School of Psychological Sciences and investment services company Challenger focused on 1,000 Challenger customers aged over 60. 

Two-thirds of respondents proactively chose to enter retirement (either partially or fully), with “financial stability”, “enjoying retirement while health allowed”, and “eligibility to access super” the lead factors in decision making.  

In contrast, others are not so lucky and are forced into retirement as a result of sickness, injury, or disability, or retrenchment, dismissal, or unemployment.

The study did not find retirement attitudes were significantly impacted by gender or time in retirement. 

The findings suggest that feeling empowered to choose when and how you step into this next phase of life results in a healthier transition and greater retirement happiness, retirement adjustment, and satisfaction.  

The study respondents chose to retire while their health allowed them to truly enjoy themselves and explore their passions and purpose. 

Of those surveyed, 22% noted the choice to focus on what they wanted to do rather than what they had to do was the top retirement benefit. This was closely followed by enjoying freedom and flexibility to be spontaneous (20%), family time (17%), and travel (15%).  

Financial security was a key enabler for retirees to have the peace of mind to take the step with confidence. 

Respondents who proactively chose to retire were found to have significantly fewer worries (51%) compared to those who retired out of necessity (32%). Having the financial security to optimise choice was also cited as potentially having longer-term benefits. 

However, many seniors do not have that choice, and the timing of retirement is forced onto them.  

Aware Super found two out of five Australians were forced into retirement years earlier than planned, as factors such as health issues, redundancy, and burnout pushed them out of the workforce. 

And data from the Australian Bureau of Statistics shows that in 2022-23, 13% of retirees left work because of sickness, injury or disability, while 5% lost their jobs. Almost one-third of retirees leave work because they reach pension age or become eligible to access their superannuation. 

Fifty per cent of respondents said “enjoyment” was their key purpose in retirement, followed by “keeping well” (22%). 

The study strongly suggests that confidence to proactively retire was enhanced by some sort of guaranteed regular lifetime income in retirement, such as an annuity.  

The respondents said a stable income for life allows them to focus on what truly makes them happy. 

Catapult Wealth director Tony Catt told The Australian guaranteed income products had struggled to attract many retirees because Australia “was blessed” with other strong sources of income such as share dividends and property rents, even though they were not guaranteed. 

Age pension payments are government-guaranteed income “but that’s a break-glass-in-case-of-emergency fallback”, Mr Catt said. 

“With the cost of living now, it’s not a good thing to aim only for that,” he said. 

Related reading: Challenger, The Australian