Who Did Retire Early, and Who Did Not?: The Comparison Study between the Early Retirees and the Older Workers

Background and Purpose

In the situation the Great Recession had a harmful impact on older workers as forcing them out from the labor market, the early retirement can be a risk factor for both the individuals’ retirement life and the government's burden of Social Security budget. The early retirement restricted workers’ enough contribution to the retirement plans. However, few studies have examined the early retired population with a comparative perspective to the working-longer group than the early retirement group after the Great Recession. The study is to examine the differences between the early retirement group and the working-longer group with the following research questions: 1) What are the characteristics of the early retirees and the non-early retirees, and 2) What factors predict early retirement?

Methods

This study used data from the RAND HRS longitudinal data 2008-2014. The sample consisted of respondents between the ages of 50 and 65 years that included from the early retirement to the full retirement (N=3,113). The early retirement group defined as those who retired between 2008 and 2014 in their ages of 50 and 65 years. The age of the non-early retirement group was restricted between 62 and 65 which age between the early retirement and the full retirement. A multivariate logistic regression model was conducted to determine whether socio-demographic, health, wealth, income, social and health programs, and employment history variables were associated with the subjective early-retirement.

Results

The sample of early retirees was 60% female, 63% White, 85% Non-Hispanic, 66% couple household, and mean age of 61 (N=1,691). The non-early retirees were 57% female, 70% White, 83% Non-Hispanic, 69% couple household, and mean age of 64 (N=1,422). The analysis found that Hispanics were more likely to work longer than non-Hispanics (OR = 1.51, p<.05). Compared to the excellent subjective health group, the fair health group was less likely to work (OR = 0.65, p<.05), as was the poor health group (OR = .033, p<.01). Compared to the 1^st quintile wealth group, the upper quintile wealth groups were less likely to work (OR = 0.38-0.54, p<.01). The respondent under the poverty threshold is less likely to work (OR = 0.70, p<.05). The group receiving Social Security or pension is less likely to work (OR = 0.37 & 0.15, p<.01). The respondents with health insurance covered by federal government program were 0.2 times less likely to work while respondents with health insurance covered by a current or previous employer were 3 times more likely to work (p<.01).

Conclusions and Implication

The findings indicated that the respondents’ subjective early-retirement was associated with different characteristics based on individuals, and they also may have diverse needs related to retirement. The result has implications that; 1) there is needed a preventive perspective approach for the people with low life-earning and poor health status to provide appropriate retirement plans for preventing life crisis due to retirement, 2) for the working-longer people, they need proper programs and policies to achieve the longevity of their career.