Life Satisfaction and Retirement in Australia: A Longitudinal Approach

Abstract

This article investigates changes in life satisfaction across the retirement transition. Retirement is an important life course transition, potentially involving major changes to an individual’s economic and social circumstances. This research contributes to a better understanding of the retirement experience in Australian society by identifying variations in life satisfaction following retirement and the individual characteristics associated with these variations. Latent growth mixture models were used to analyze data from the first 11 waves of the Household, Income and Labour Dynamics in Australia survey and included 724 people who made a single transition into retirement. Some retirees maintained high life satisfaction across the retirement transition (40%), others experienced declining levels of life satisfaction from a high level prior to retirement (28%), some experienced increasing life satisfaction from a low level prior to retirement (14%), while another group reported a declining low level of life satisfaction (18%). These results indicate considerable diversity in life satisfaction that is masked by analyses that focus on overall averages. Individuals who experience significant declines in life satisfaction tend to have worse health and lower access to a range of social and economic resources compared to other groups. We conclude that retirement is not a uniform experience and that changes in life satisfaction over the retirement transition are associated with both pre- and post retirement experiences.