The growing prevalence of older adults providing informal care while remaining in the workforce presents challenges for retirement decision-making and labour force participation. Guided by Role Theory, which highlights how competing roles shape identity and behaviour, this study examines how caregiving-related and work-related factors influence retirement decisions among older workers in New Zealand. Drawing on longitudinal data from the New Zealand Health, Work and Retirement Study, we examined 502 older workers aged 55 to 68 years who were simultaneously engaged in paid employment and providing informal care to a family member or friend with a long term illness, frailty or disability. After controlling for demographic and health variables, findings revealed that higher caregiving frequency, job stress, and mismatch between preferred and actual employment status predicted retirement at the two-year follow-up. Older workers in involuntary part-time, involuntary full-time, and voluntary part-time roles were substantially more likely to retire than those in voluntary full-time positions. These findings point to the multifaceted nature of retirement decisions for older adults navigating work and caregiving responsibilities. This study shows that flexibility alone is insufficient unless it reflects older workers’ preferred employment status, and that taking initiative to reduce job stress offers a key pathway for organisations to support family caregivers and sustain workforce participation.