Monday, August 02, 2010

Urban Institute Research on Generational Shift in Retirement Patterns

According to research published by the Urban Institute, older adults in the United States are now working longer and taking more complex routes out of the labor force. The study examines how retirement behavior changed over the past 30 years by comparing labor force exits by older workers in three different five-year cohorts--those born from 1913 to 1917 (part of the G.I. Generation), 1933 to 1937 (part of the Silent Generation), and 1943 to 1947 (the early years of the Baby Boom Generation).

In "Work and Retirement Patterns for the G.I. Generation, Silent Generation, and Early Boomers: Thirty Years of Change", co-authored by Richard W. Johnson, Barbara Butrica, and Corina Mommaerts, it is reported that more than 40% of men born 1943 to 1947 did not retire by age 65, compared with only 20% of those born 1933 to 1937. In addition, Men and women born 1933 to 1937 were much more likely than those born 20 years earlier to move to part-time work at older ages and return to work after retiring instead of following the traditional route of retiring only once directly from full-time employment.
Sixty-two is now the most common retirement age by far. More than one-fifth of men born 1943 to 47 working at age 61 retired at age 62. While average retirement ages have been creeping up recently and labor force participation rates have surged after age 62, the share of adults retired by age 62 had not fallen much, especially among men. In light of the financial benefits of working longer and overall improvements in employment prospects at older ages, it is surprising that participation rates have not increased more among men in their late fifties and early sixties. As policymakers debate the wisdom of increasing Social Security's early entitlement age, understanding why so many worker continue to retire by age 62 is a crucial research challenge.
Source: Urban Institute Press Release (August 2, 2010)

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