The role of idiosyncratic deals in shaping retirement preferences of older workers: A psychological needs perspective

Abstract

This study examines how idiosyncratic deals (I-deals) affect older workers’ preferred retirement age. Drawing on basic psychological needs theory, we specifically investigate the role of need satisfaction at work in explaining this relationship. By means of confirmatory factor analysis (CFA) and structural equation modeling (SEM), our hypotheses were tested in a sample of 4234 employees aged 65 years or older in a large public-sector organization in Sweden. The findings suggest that employees with negotiated I-deals concerning schedule flexibility or financial incentives experienced greater need satisfaction and preferred to retire later than those without such deals. Additionally, task and work responsibility deals were shown to directly and positively predict retirement preferences. This study offers new insights into how I-deals could delay the preferred retirement by fulfilling basic psychological needs. It may thereby inform interventions to increase need satisfaction at work and the implementation of policies for recruiting and retaining older workers.