One's finished working on Hebridean island (7)
I believe the answer is:
Here is my best explanation:
'one's finished working' is the definition.
'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 "One no longer working", "One put out to pasture", "One ceasing to work", "One having completed work", "Pensioner", "Person out of work", "One stopping work", "One who has ceased to work", "Former American worker" and "Someone no longer working".)