One no longer working on Hebridean island (7)
I believe the answer is:
Here is my best explanation:
'one no longer working' is the definition.
(I've seen this before)
'on hebridean island' is the subsidiary indication.
'on' becomes 're' ('on' can be mean 'with reference to').
'hebridean island' becomes 'tiree' (I've seen this before).
(Other definitions for retiree that I've seen before include "Someone no longer working", "One put out to pasture", "Person out of work", "One ceasing to work", "One having completed work", "One stopping work", "One no longer working", "One who has ceased to work", "Pensioner" and "Former American worker".)