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Retirement Risks: Research finds that claiming benefits early increases mortality for men

Friday, October 30, 2020

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If your year-end goals include planning for retirement, you might want to rethink your options for when to start claiming benefits.

About one third of Americans immediately claim Social Security at age 62 when eligibility begins. In the same month men and women start claiming Social Security, overall mortality increases by 1.5 percent.

This is driven by a statistically significant 2 percent increase in male mortality. For women, there is a 1 percent increase in mortality the month they turn 62, but this is not larger than mortality estimates at nearby ages. Importantly, a study by the Purdue University Research Center in Economics (PURCE) finds no overall increase in mortality at age 62 prior to the 1960s, when it was not the Social Security eligibility threshold.

In “The Mortality Effects of Retirement: Evidence from Social Security Eligibility at Age 62,” published in the Journal of Public Economics, Krannert researcher Tim Moore and colleague Maria Fitzpatrick of Cornell University show that declining labor force participation leads to an immediate jump in mortality.

While their findings document only a weak link between change in mortality and Social Security receipt, they find that retirement itself has an immediate, negative effect on an important, objective measure of health: mortality rates.

Social Security beneficiaries are not required to stop working, though most do substantially decrease their employment after claiming the benefit at age 62. For one narrowly defined subgroup — men who retire at age 62 — mortality increases by approximately 20 percent.

“Our research finds a clear link between a widespread retirement incentive — Social Security benefits, the only such incentive available starting at age 62 — and mortality,” Moore says.

Available evidence suggests it is unlikely that changes in health insurance and income can account for the increase in mortality at age 62. To further study the plausibility of retirement leading to higher mortality, Moore examines which causes of death increase when men turn 62, and considers the connection between those and decreased labor force participation.

The causes of death with the clearest increases for men at age 62 are traffic accidents and two lung-related conditions: chronic obstructive pulmonary disease and lung cancer. This is consistent with suggestive evidence that men engage in more unhealthy behaviors once they retire. The mortality increase is largest for unmarried men and men with low education levels.

“There is enormous interest in the effect of retirement on health, especially given the aging of the population and the reforms to retirement policies underway in the U.S. and other developed countries,” Moore says. “Evidence of a rise in mortality once Social Security is available represents an important step forward in understanding the relationship between retirement and health.”

To read or download the entire full paper, visit https://doi.org/10.1016/j.jpubeco.2017.12.001.


About PURCE

The Purdue University Research Center in Economics, or PURCE, is a nonprofit research center that produces and shares data-driven insights into how laws, regulations, and government programs affect the market economy and the well-being of individuals and society.

 

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