In developing a mental model of how long they might live it is likely that individuals take into account their own age-related actuarial probabilities of life expectancy, but also consider other autobiographical details including factors such as their parents' longevity and their own lifestyles and health. Interestingly, although a relatively new concept for research, there is evidence that self-estimates of life expectancy are reasonably accurate (Fry and Debats, 2006, Kotter-Gruhn et al., 2010 and Siegel et al., 2003). Furthermore, an early study by Hamermesh (1985) illustrated that while self-estimates of life expectancy were similar to actuarial estimates, the distribution of self-estimates had greater variance, which suggests that personal factors are having an influence on people's understanding of their own life expectancy.
Estimating longevity is important both for individuals in planning the timing of their transition to retirement and for society where estimates of life expectancy inform pension and aged care policy and practice. Indeed, actuarial life expectancy estimates and survival probabilities have become core tools for economists and financial planners who use them as a guide for determining how people should best allocate and invest their retirement savings (Hurd & McGarry, 2002). However, actuarial estimates are based on population mortality rates so do not capture the range of individual differences likely to affect one's life expectancy. We suggest that people draw on their autobiographical analysis of these differences to formulate a self-estimated or subjective life expectancy (SLE) and argue that this should also be considered in the context of understanding mature-aged workers' transition to retirement.
As a measure of future time, SLE fits within the nomological net of the concepts of future time perspective (FTP) and time remaining, as described in socioemotional selectivity theory, a life-span theory of motivation (Carstensen, 2006, Carstensen et al., 2003 and Carstensen et al., 1999). Carstensen and colleagues suggest that as people age their perspective of remaining lifetime changes from being expansive to limited. Awareness of time remaining influences one's choice of goals, so that motivation changes as time horizons contract. When time is perceived to be limited more value is placed on emotional goals and meaningful social interactions and less value on knowledge-relevant goals. Goals focused on acquiring knowledge and information are thought to prepare one for future possibilities (Charles & Carstensen, 2009).
Rather than quantifying remaining time, empirical tests of socioemotional selectivity theory have used chronological age and terminal illness as proxies for limited remaining time or used a scale measuring the construct “future time perspective”, which contains items such as “My future seems infinite to me” (Carstensen & Lang, 1996). We suggest that SLE offers a clearer measure of time remaining that may better distinguish among those of similar chronological age. This is particularly important when comparing a more age-homogeneous group such as late-career workers or retirees. At their stage of life, time remaining may start to become more important than time since birth (Carstensen, 2006).
Future time perspective has been operationalised in what appears to be a multidimensional construct, which includes the perception of time remaining as well as one's focus on opportunities and limitations in the future (Cate & John, 2007). Those with a strong focus on opportunities are positive about the future, believing there are many possibilities to pursue in the remainder of their lives, while those with a strong focus on limitations concentrate on perceived impediments and restrictions in the future (Cate & John, 2007). Recent empirical tests of the theory within the context of work have shown that occupational FTP predicts job performance (Zacher, Heusner, Schmitz, Zwierzanska, & Frese, 2010), moderates the relationship between work/family conflict and organisational commitment (Treadway, Duke, Perrewe, Breland, & Goodman, 2011), and moderates the relations between contract fulfilment and employee obligations of older workers (Bal, Jansen, et al., 2010).
1.2. SLE and retirement transition, post retirement work and retirement planning
In a cross-sectional study Hesketh and Griffin (2007) provided initial evidence that SLE was a stronger predictor of intended retirement age than current income, anticipated retirement income, or self-reported health. Those who expected to live longer also planned to retire later. A more recent study by van Solinge and Henkens (2010) supported this finding, showing that SLE was a significant predictor of intended retirement age, even after controlling for important demographic factors such as gender, age, income, education, health, marital status, and family longevity.
The tenets of socioemotional selectivity theory can be used to explain why SLE is likely to be relevant to retirement decision-making. Firstly, low SLE is hypothesised to result in a focus on limited opportunities, low interest in knowledge goals, and a high preference for socialising with close social contacts. Someone with this focus is more likely to want to retire from paid work at an earlier age to allow time to engage in meaningful non-work activities such as spending more time with family and friends. In contrast, those who expect to live longer may feel that they have time to engage in both work and non-work activities. They probably see death as a far off event, relative to others of the same age, and therefore are not yet at the stage to consider changing life priorities and retirement. Secondly, because those who have high SLE are likely to be contemplating a long retirement period with lots of opportunities for activity, they may also need to be engaged in paid work for longer in order to adequately fund their retirement (von Bonsdorff, Shultz, Leskinen, & Tansky, 2009). Thirdly, Lockenhoff and Carstensen (2007) contend that the change in goal focus from information gathering to emotional well-being has implications for decision-making, especially when decisions require attention to unpleasant or high levels of factual information. Retirement decisions have become increasingly complex with a shift to individual responsibility for timing and finance (Shultz & Wang, 2011) at a time of high uncertainty and instability of financial markets. According to socioemotional selectivity theory, late career workers with a short SLE might therefore avoid the effort of considering negative information about the financial risks of retiring early, preferring to focus on positives such as time for leisure and family activity.
The current study builds on earlier research using retirement intentions (Hesketh and Griffin, 2007 and van Solinge and Henkens, 2010) by investigating the hypothesis that high SLE will be related to intended retirement age and to actual retirement across time, controlling for chronological age and other known predictors.
Unlike previous generations, retirement for today's late career worker has become a more fluid process and it is not uncommon for people to return to the paid workforce after they have formally exited into retirement (Griffin and Hesketh, 2008 and Jones and McIntosh, 2010). Recent conceptualisations of retirement include the notion of a transition phase that involves moving in and out of labour force participation as people adjust psychologically and financially in a process towards “full retirement” ( Shultz & Wang, 2011). Engagement in post-retirement work or bridge employment during this transition phase has positive implications for organisations seeking to maintain talent and corporate knowledge, and apart from the obvious financial gains, it also has physical and mental health benefits for the individual ( Zhan, Wang, Liu, & Shultz, 2009).
For the same reasons hypothesised to keep those with higher SLE from retiring early, it is possible that SLE is a factor that influences an already-retired person to return to paid work/bridge employment. A growing body of research has found that those who leave retirement to re-enter the workforce have more positive attitudes to their pre-retirement work, are more highly educated, are in better health, and are more likely to be male (Davis, 2003, Griffin and Hesketh, 2008 and Wang et al., 2008). Until now the relationship of post-retirement work with SLE has never been examined, but we hypothesise that those with high SLE will be more likely to return to work.
In addition to investigating the longitudinal effect of SLE on retirement age and decisions to retire or re-enter the workforce, we propose that it will also be related to the extent that a late-career worker engages in retirement preparation. Not surprisingly, when financial planners advise pre-retirees about investing and accumulating retirement funds, one factor they consider is expected longevity to calculate how many years their clients' retirement finances need to last. Considerable attention has been given to actuarial estimates of life expectancy by economists and those managing pension schemes because of its obvious links to funding retirement ( Bloom et al., 2003 and Hurd and McGarry, 2002). In comparison, the effect of subjective life expectancy on retirement preparation has not been examined, and yet it has the potential to significantly influence pre-retirees' motivation to save for retirement, and to shape their rationale for decisions about investing retirement finances and planning for long term needs in retirement housing and activities ( Hamermesh, 1985).
As previously explained, socioemotional selectivity theory suggests that those with an expansive sense of time remaining are more likely to focus on their future opportunities in life. For example, belief of longer remaining time is related to making preparatory goals, which are focused on gathering information, experiencing novelty, and on expanding one's breadth of knowledge (Carstensen, 2006). Zimbardo and Boyd (1999) also argued that the way people perceive the future appears to be of great importance to their current behaviour and planning. Although retirement preparation has not been investigated in relation to SLE, there has been some attention given to other time-related measures, with evidence (Hershey and Mowen, 2000, Jacobs-Lawson and Hershey, 2005 and Petkoska and Earl, 2009) that those who focus on the future engage in more retirement preparation. In the same way, we hypothesise that those with high SLE will also plan more because of the need to cope financially and otherwise with a longer retirement.
In summary, controlling for relevant demographic variables and work attitudes, we predict that at Time 2, those with higher SLE assessed a year earlier at Time 1 will: 1) have an older intended retirement age; 2) be less likely to have actually retired; 3) be more likely to have returned to work after having retired; and 4) be engaging in more retirement preparation.
In developing a mental model of how long they might live it is likely that individuals take into account their own age-related actuarial probabilities of life expectancy, but also consider other autobiographical details including factors such as their parents' longevity and their own lifestyles and health. Interestingly, although a relatively new concept for research, there is evidence that self-estimates of life expectancy are reasonably accurate (Fry and Debats, 2006, Kotter-Gruhn et al., 2010 and Siegel et al., 2003). Furthermore, an early study by Hamermesh (1985) illustrated that while self-estimates of life expectancy were similar to actuarial estimates, the distribution of self-estimates had greater variance, which suggests that personal factors are having an influence on people's understanding of their own life expectancy.
Estimating longevity is important both for individuals in planning the timing of their transition to retirement and for society where estimates of life expectancy inform pension and aged care policy and practice. Indeed, actuarial life expectancy estimates and survival probabilities have become core tools for economists and financial planners who use them as a guide for determining how people should best allocate and invest their retirement savings (Hurd & McGarry, 2002). However, actuarial estimates are based on population mortality rates so do not capture the range of individual differences likely to affect one's life expectancy. We suggest that people draw on their autobiographical analysis of these differences to formulate a self-estimated or subjective life expectancy (SLE) and argue that this should also be considered in the context of understanding mature-aged workers' transition to retirement.
As a measure of future time, SLE fits within the nomological net of the concepts of future time perspective (FTP) and time remaining, as described in socioemotional selectivity theory, a life-span theory of motivation (Carstensen, 2006, Carstensen et al., 2003 and Carstensen et al., 1999). Carstensen and colleagues suggest that as people age their perspective of remaining lifetime changes from being expansive to limited. Awareness of time remaining influences one's choice of goals, so that motivation changes as time horizons contract. When time is perceived to be limited more value is placed on emotional goals and meaningful social interactions and less value on knowledge-relevant goals. Goals focused on acquiring knowledge and information are thought to prepare one for future possibilities (Charles & Carstensen, 2009).
Rather than quantifying remaining time, empirical tests of socioemotional selectivity theory have used chronological age and terminal illness as proxies for limited remaining time or used a scale measuring the construct “future time perspective”, which contains items such as “My future seems infinite to me” (Carstensen & Lang, 1996). We suggest that SLE offers a clearer measure of time remaining that may better distinguish among those of similar chronological age. This is particularly important when comparing a more age-homogeneous group such as late-career workers or retirees. At their stage of life, time remaining may start to become more important than time since birth (Carstensen, 2006).
Future time perspective has been operationalised in what appears to be a multidimensional construct, which includes the perception of time remaining as well as one's focus on opportunities and limitations in the future (Cate & John, 2007). Those with a strong focus on opportunities are positive about the future, believing there are many possibilities to pursue in the remainder of their lives, while those with a strong focus on limitations concentrate on perceived impediments and restrictions in the future (Cate & John, 2007). Recent empirical tests of the theory within the context of work have shown that occupational FTP predicts job performance (Zacher, Heusner, Schmitz, Zwierzanska, & Frese, 2010), moderates the relationship between work/family conflict and organisational commitment (Treadway, Duke, Perrewe, Breland, & Goodman, 2011), and moderates the relations between contract fulfilment and employee obligations of older workers (Bal, Jansen, et al., 2010).
1.2. SLE and retirement transition, post retirement work and retirement planning
In a cross-sectional study Hesketh and Griffin (2007) provided initial evidence that SLE was a stronger predictor of intended retirement age than current income, anticipated retirement income, or self-reported health. Those who expected to live longer also planned to retire later. A more recent study by van Solinge and Henkens (2010) supported this finding, showing that SLE was a significant predictor of intended retirement age, even after controlling for important demographic factors such as gender, age, income, education, health, marital status, and family longevity.
The tenets of socioemotional selectivity theory can be used to explain why SLE is likely to be relevant to retirement decision-making. Firstly, low SLE is hypothesised to result in a focus on limited opportunities, low interest in knowledge goals, and a high preference for socialising with close social contacts. Someone with this focus is more likely to want to retire from paid work at an earlier age to allow time to engage in meaningful non-work activities such as spending more time with family and friends. In contrast, those who expect to live longer may feel that they have time to engage in both work and non-work activities. They probably see death as a far off event, relative to others of the same age, and therefore are not yet at the stage to consider changing life priorities and retirement. Secondly, because those who have high SLE are likely to be contemplating a long retirement period with lots of opportunities for activity, they may also need to be engaged in paid work for longer in order to adequately fund their retirement (von Bonsdorff, Shultz, Leskinen, & Tansky, 2009). Thirdly, Lockenhoff and Carstensen (2007) contend that the change in goal focus from information gathering to emotional well-being has implications for decision-making, especially when decisions require attention to unpleasant or high levels of factual information. Retirement decisions have become increasingly complex with a shift to individual responsibility for timing and finance (Shultz & Wang, 2011) at a time of high uncertainty and instability of financial markets. According to socioemotional selectivity theory, late career workers with a short SLE might therefore avoid the effort of considering negative information about the financial risks of retiring early, preferring to focus on positives such as time for leisure and family activity.
The current study builds on earlier research using retirement intentions (Hesketh and Griffin, 2007 and van Solinge and Henkens, 2010) by investigating the hypothesis that high SLE will be related to intended retirement age and to actual retirement across time, controlling for chronological age and other known predictors.
Unlike previous generations, retirement for today's late career worker has become a more fluid process and it is not uncommon for people to return to the paid workforce after they have formally exited into retirement (Griffin and Hesketh, 2008 and Jones and McIntosh, 2010). Recent conceptualisations of retirement include the notion of a transition phase that involves moving in and out of labour force participation as people adjust psychologically and financially in a process towards “full retirement” ( Shultz & Wang, 2011). Engagement in post-retirement work or bridge employment during this transition phase has positive implications for organisations seeking to maintain talent and corporate knowledge, and apart from the obvious financial gains, it also has physical and mental health benefits for the individual ( Zhan, Wang, Liu, & Shultz, 2009).
For the same reasons hypothesised to keep those with higher SLE from retiring early, it is possible that SLE is a factor that influences an already-retired person to return to paid work/bridge employment. A growing body of research has found that those who leave retirement to re-enter the workforce have more positive attitudes to their pre-retirement work, are more highly educated, are in better health, and are more likely to be male (Davis, 2003, Griffin and Hesketh, 2008 and Wang et al., 2008). Until now the relationship of post-retirement work with SLE has never been examined, but we hypothesise that those with high SLE will be more likely to return to work.
In addition to investigating the longitudinal effect of SLE on retirement age and decisions to retire or re-enter the workforce, we propose that it will also be related to the extent that a late-career worker engages in retirement preparation. Not surprisingly, when financial planners advise pre-retirees about investing and accumulating retirement funds, one factor they consider is expected longevity to calculate how many years their clients' retirement finances need to last. Considerable attention has been given to actuarial estimates of life expectancy by economists and those managing pension schemes because of its obvious links to funding retirement ( Bloom et al., 2003 and Hurd and McGarry, 2002). In comparison, the effect of subjective life expectancy on retirement preparation has not been examined, and yet it has the potential to significantly influence pre-retirees' motivation to save for retirement, and to shape their rationale for decisions about investing retirement finances and planning for long term needs in retirement housing and activities ( Hamermesh, 1985).
As previously explained, socioemotional selectivity theory suggests that those with an expansive sense of time remaining are more likely to focus on their future opportunities in life. For example, belief of longer remaining time is related to making preparatory goals, which are focused on gathering information, experiencing novelty, and on expanding one's breadth of knowledge (Carstensen, 2006). Zimbardo and Boyd (1999) also argued that the way people perceive the future appears to be of great importance to their current behaviour and planning. Although retirement preparation has not been investigated in relation to SLE, there has been some attention given to other time-related measures, with evidence (Hershey and Mowen, 2000, Jacobs-Lawson and Hershey, 2005 and Petkoska and Earl, 2009) that those who focus on the future engage in more retirement preparation. In the same way, we hypothesise that those with high SLE will also plan more because of the need to cope financially and otherwise with a longer retirement.
In summary, controlling for relevant demographic variables and work attitudes, we predict that at Time 2, those with higher SLE assessed a year earlier at Time 1 will: 1) have an older intended retirement age; 2) be less likely to have actually retired; 3) be more likely to have returned to work after having retired; and 4) be engaging in more retirement preparation.
