Human resource planning and the older worker: Developing a retirement intentions model

Abstract

Making predictions about the age at which employees will retire has become increasingly difficult over the past ten years. Recent legislation has elevated the minimum age for compulsory retirement from 65 to 70 years and in some cases, has outlawed mandatory retirement based on age entirely (e.g. California). The impact of this legislation on employees' retirement behaviour has not yet been determined as contradictory forces are present which compound the prediction problem. Labour statistics indicate that the average age at retirement continues to decline (Walker and Lazer, 1978) but that this pattern may cease or even reverse itself in light of current inflationary and recessionary economic conditions (Walker and Price, 1976; Chruden and Sherman, 1980). Indeed, assuming the continuation of current demographic trends, the ratio of nonworking dependents to employed persons is projected to rise, increase income transfers to dependent population members (e.g. Social Security), and independently add to the inflation problem as the total demand for goods increases without an increase in the supply (Stagner, 1979; Muchinsky and Morrow, 1980). A recent national poll noted that nearly half (48 per cent) of the employed respondents between 50 and 64 intended to continue working instead of retiring at the usual time (Harris and Associates, 1979). Some retirement experts feel that doubts about the adequacy and viability of the Social Security system are inducing workers to postpone retirement (e.g. Stagner, 1979). The end result of these mixed signals is that human resource planners and pension plan administrators are perplexed by their inability to make projections about future retirement trends (Chruden and Sherman, 1980).