What is retirement?

A study completed in 2008 called What is Retirement? A Review and Assessment of Alternative Concepts and Measures by  Frank T. Denton and Byron G. Spencer looked at this question. I found their answers interesting

Retirement happens to older workers when they withdraw from the workforce. Older means those over the age of 55, or even 60. Whatever else they do those who are younger seldom ‘retire’. The meaning of ‘withdrawal’ is also elastic. At one extreme is a full withdrawal – i.e., no labor force activity and hence no hours of work and no earnings from work. At the other would be a reduction in work effort deemed sufficiently large to qualify – e.g., by some arbitrary amount, at least one-quarter, or one-half, say – but not necessarily all the way to zero.

In Canada Statistics Canada has a ‘standard definition’ of retirement: “retired refers to a person who is aged 55 and older, is not in the labor force, and received 50 percent or more of his or her total income from retirement-like sources

So, retirement is not that easy to define here are some other definitions of retirement that academics have used to study this issue

• An older worker has ceased participation in the Labour Force,
• An older worker has had a reduction in hours worked and/or earnings
• An older worker has hours worked or earnings which are less than a predefined minimum (less than 20 hours a week for example)
• An older individual is in receipt of retirement income that accounts for most of his/her income
• An older worker has left their main employer
• An older worker has had a change of career or employment later in life
• A person self-assesses they are in retirement

They conclude their study by noting that while the concept of retirement is prominent in both popular thinking and academic studies, there is no unique measure that can be attached to it. The problem is that what underlies the concept of retirement is the essentially negative notion of attempting to define what people are not doing – namely, that they are not working. In almost all cases the underlying notion is that working time has been withdrawn from the market economy.

But measures that reflect the absence of market-oriented activities ignore what people are actually doing. The fact is that much nonmarket activity is socially productive even though it is not included in standard measures of national income. One could be not in the labor force (using standard indicators), hence not engaged in market activities and not contributing to the measured national income, but still, be contributing to the well-being of the society.

This might happen through the provision of unpaid contributions of time, or volunteer services. There are many examples of ways in which individuals spend time providing contributions that are recognized as socially valuable but whose worth is not included in conventional measures. The Boomers are redefining what it means to be retired and over time the definition of what it means to be retired will be very different than the idea that a person has “withdrawn from the labor force.”