When to Retire? Personal Values Affect Decision

What is the best age for retirement?

The answer appears to depend not on how much money people have saved or whether they have pensions, but on their attitudes toward work and feelings about remaining self-reliant.

That was the message from sociologist Alex Inkeles of the Hoover Institution, who studied data from a four-country survey conducted by Japan.

Nearly three-quarters of Japanese men and more than half of American men said 65 or older is the best age for retirement, compared with only 25% of the British men and 18% of the French men.

Age 70 or higher was mentioned by 39% of the Japanese and 22% of the Americans, but only 2% of the British and 3% of the French. The majority of British and French selected age 60.

Important for Planning

Inkeles said attitudes about work and retirement are important considerations for businesses and governments, especially as the Baby Boom generation gets older.

“Policy-makers shouldn’t have the idea that it is going to be easy to influence workers either to work longer or to retire earlier,” Inkeles said.

“A lot of people have values to continue working, so it’s important not to write policies that smother that desire.”

Studying data compiled by the Japanese prime minister’s office in 1981, Inkeles found that differences in retirement ages in the four countries surveyed could not be explained by such factors as income, social security pensions, life expectancy, unemployment rates or provisions for early retirement.

“Instead, the differences seem to be explained by preferences, basic values and conceptions about what is good and proper,” Inkeles said in a paper presented at a conference on issues in contemporary retirement sponsored by Hoover and the National Institute on Aging.

“These evidently induce considerably larger proportions of the Japanese and, to a comparable if lesser extent, Americans, to stay on in the labor force after they reach 60.”

The Japanese survey showed that 57% of the men in Japan continued working after 60, compared to 33% in the United States, 13% in the United Kingdom and 8% in France.

Asked where an older person’s income should come from, Japanese and American men said about 60% should be from money saved while working and about 25% should be from social security programs, with the rest from family or other sources.

British workers said 42% should come from savings and 50% from government pensions. French workers said 29% should come from savings and 67% from government pensions.

“Social security programs in different countries look remarkably alike,” Inkeles said. “There’s nothing to indicate that the ideas on retirement are related to the benefits offered in the various programs.”

He said he could not make a judgment on whether socialist trends in Great Britain and France during the last 40 years account for some of the differences between workers in the countries.

“I’d want to look back at attitudes before 1946 to see if there was any change, but unfortunately we don’t have data on that,” he said.

An overwhelming majority of workers in all four countries retire before the formal age of retirement, and that age is continually getting younger, Inkeles said.

“Policy-makers shouldn’t take actions that discount people’s desire to keep working,” he said. “There may be times when more workers are needed or times when it’s desirable to have people retire earlier, but it’s a complex problem and cannot be solved just by placing incentives in the social security system or pension plans.”

Although the Japanese study surveyed only men, Inkeles said other research showed that similar differences of opinion on retirement were held by women in each country.