Survey responses indicate that the majority of working-aged New Zealanders would prefer to make a gradual transition from work to retirement, rather than move abruptly from full-time work to non-employment. This study describes the employment patterns and transitions of people who were aged in their 60s and moved from employment to inactivity during the 1999–2007 period, using longitudinal data from the Linked Employer-Employee Dataset.
Four different types of transition to retirement were defined and the relative frequency of each explored. We find that phased transitions, involving either part-time work or a number of transitions in and out of employment before the final exit, were far more common than discrete transitions from full-time work to non-employment. Men were more likely than women to take a traditional path from work to retirement. Although there were some significant variations in the frequency of different work-to-retirement paths across major industries, phased transitions were more prevalent than traditional transitions in all major industries.
International evidence shows that phased retirements are also common in other countries with similar labour markets. The literature suggests that many older adults retire gradually, but some are constrained in their labour supply choices and are unable to achieve the flexible transitions to retirement they would prefer.