As Retirement Age Creeps Up, the Health of Those Close to Retirement Is Getting Worse
Ten years from now, Americans born in 1960 will be able to start collecting their full Social Security retirement check, at the age of 67. That's two years later than their parents, because of a change in the federal retirement age enacted in 1983.
But a new study shows that today's preretirement generation already has more health issues and health-related limits on their lives than prior generations did when they were in their late 50s.
The new findings, made by a University of Michigan (U-M) team using data from long-term health studies and funding from the Alfred P. Sloan Foundation, are published in Health Affairs.
The study suggests that today's older workers will face more challenges than their predecessors as they continue to work, seek work, apply for Social Security disability payments, or try to retire on other income over the next decade.
But the researchers also say their findings have implications for any proposals to change the Social Security retirement age, pushing it higher for people now in their 50s and below in order to stretch the federal budget.
"Other research has found similar trends in the health of Americans who are now in the 50s and 60s, but this is the first study to look specifically at groups, or cohorts, of Americans by Social Security retirement age, which has specific policy implications," says HwaJung Choi, PhD, lead author of the new study and an economist and demographer at the U-M Medical School.
"We found that younger cohorts are facing more burdensome health issues, even as they have to wait until an older age to retire, so they will have to do so in poorer health," says Robert Schoeni, PhD, an economist and demographer at the U-M and coauthor of the new paper.
Long-Term Look at Five Birth Cohorts
The new paper used data from the Health and Retirement Study, funded by the National Institute on Aging and based at ISR, and from the National Health Interview Survey run by the Centers for Disease Control and Prevention.
Both studies go back decades, and provide in-depth data from people of different ages—making it possible to see how different age cohorts were doing at different times.
For this study, the researchers grouped older Americans into five birth cohorts: those who could receive their full Social Security benefits at 65 because they were born in 1937 or earlier, those born during 1938–1942 who could claim benefits sometimes during the year they turned 65, those born between 1943 and 1954 who could claim at age 66, those born between 1955 and 1959 who can claim full benefits somewhere between ages 66 and 67, and those born in 1960 to 1962, who are the first group to have to wait until age 67 to collect their full Social Security benefit.
They found the following:
Yesterday, Today, and Tomorrow
"They were focusing on life expectancy, not morbidity, and implicitly assuming that improvements in mortality would be accompanied by similar improvements in health or morbidity," Choi says.
"Now they are retiring and we know what their health is like—and it's not better. In fact, some aspects of their health are worse than for the people who came before them," Schoeni adds. "As policymakers talk of making the retirement age even later, these findings suggest that to fully understand the benefits and costs of such a policy, we must realize that raising the retirement age may further exacerbate the inequality between cohorts born only a few years apart, because the younger ones may find it more challenging to work beyond age 67."
The authors note that among those who rely on Social Security for most or all of their retirement income, education levels tend to be lower, and their preretirement occupations tend to involve more physical demands, making it more difficulty to work to an older age. Applications for Social Security disability benefits may also rise among this group, putting even more demands on the overall Social Security budget.
Health can also make a major difference in individuals' decisions to actually stop working once they reach their Social Security retirement age. Many people want or need to keep working for pay after they start collecting Social Security, and some studies have suggested that working can be beneficial for health. But if their health is poor they may not be able to.
Source: Michigan Medicine - University of Michigan