Determinants of retirement timing expectations in the United States and Australia: a cross-national comparison of the effects of health and retirement benefit policies on retirement timing decisions

Data from the U.S. Health and Retirement Study (N = 2,589) and the Australian Household Income and Labour Dynamics survey (N = 1,760) were used to compare the macro-level policy frameworks on individual retirement timing expectations for pre-baby boomers (61+ years) and early baby boomers (45 to 60 years). Australian workers reported younger expected age of retirement compared to the U.S. sample. Reporting poor health was more strongly associated with younger expected retirement age in the United States than in Australia. Cohort and gender differences in the United States were found for the effect of private health insurance on younger expected age at retirement. Our results draw attention to how cross-national comparisons can inform us on the effects of policies on retirement expectations among older workers.     

Predicting End‐of‐Career Transitions for Baby Boomers Nearing Retirement Age

Retirement has traditionally been conceptualized as a point‐in‐time decision to physically and psychologically withdraw from the workforce on reaching a certain age. However, the expectations of older workers demonstrate a new retirement paradigm, with many more retirement trajectories. The purpose of this study was to examine actual career decisions being made by older workers and to understand sociodemographic factors that might differentiate their career trajectories. Data from the Health and Retirement Study (Juster & Suzman, 1995 ) were analyzed using multinomial logistic regression to compare 4 retirement trajectories (i.e., no retirement, full retirement, bridge employment, and encore career). Gender, age, education, marital status, health, and wealth differentially predicted the odds of pursuing each of the 4 retirement decisions. Career practitioners may use these results to help baby boomers make retirement decisions and provide them with appropriate education, guidance, and resources. Additional research is needed to examine other factors salient to each of the retirement trajectories.     

Australian Baby Boomers Face Retirement During the Global Financial Crisis

This paper examines the impact in Australia of the global financial crisis on the baby boom cohort approaching later life. Data from national focus groups of people aged 50 to 64 years (N?=?73), conducted in late 2008, found widespread but variable concern and uncertainty concerning work and retirement plans and experiences. A national survey (N?=?1,009) of those aged 50 to 64 years in mid-2009 reported lower levels of financial satisfaction compared with other life domains; many planned to postpone retirement. Findings are interpreted in the context of policies and markets that differed significantly from those in the United States, notwithstanding the global nature of the financial crisis.     

Social Security in Italy

The United States is confronting two simultaneous demographic shifts with profound implications for public policy: population aging and increasing diversity. These changes are accelerating during a dramatic economic downturn, placing entitlement reform prominently on the national policy agenda. Using decennial census data from 2000, this paper examines the nexus of these trends by examining characteristics of Latino baby boomers. In the census data, Latinos constituted 10% of the 80 million boomers; roughly one-third of Latino boomers (37%) were born in the United States or abroad to a U.S. parent; 6% were born in a U.S. territory; 21% were naturalized citizens; and 36% were noncitizens. Compared to non-Latinos, Latino baby boomers had lower levels of education, home ownership, and investment income and higher rates of material hardship and poverty; however, there was considerable variation based on citizenship status. A better understanding of Latino baby boomers will help policy makers anticipate the retirement needs of baby boomers as the United States prepares for the aging of a racially and ethnically diverse population.     

A Comparison of Early Retirement Pensions in the United States and Russia

Abstract

Early retirement pensions for particular occupations free national policy to establish the social security early retirement age at a later age that is more appropriate for the population as a whole. This paper focuses on early retirement pensions in the United States and the Russian Federation. While comparing early retirement pensions generally, the paper provides a more detailed discussion of the pensions for musicians. While this is an unconventional group to choose for the study of pensions, study of their pensions yields insights into the principles underlying retirement age policy in the two countries.     

The Selection of Partial or Full Retirement by Older Workers

The study investigated whether older workers chose partial or full retirement instead of full-time work. Partial or full retirement status was modeled as a combination of self-reported retirement status and change in number of hours worked. The results of multinomial logistic regression using data from the first and fifth waves of the Health and Retirement Study collected in 1992 and 2000 showed that age and gender had similar effects on the likelihood of partial and full retirement. Full retirement was also influenced by investment assets, pensions, employee health insurance, and poor health. The likelihood of partial retirement was also influenced by self-employment, chronic health conditions, and education. Workers who seek partial retirement need working conditions that allow them to make this choice.     

Baby boomers in retirement: what are their prospects?

This Issue Brief examines the baby boomers' retirement income prospects by analyzing trends in the elderly's income and pension participation among workers; examining saving behavior and critically evaluating studies of the adequacy of the boomers' saving; and looking at tenure trends, lump-sum distribution preservation, and changes in Social Security benefits. Since the mid 1970s, the real median income of individuals aged 65 and over has increased 18 percent. Sources of income have shifted, with employment-based pensions increasing and earnings and asset income decreasing as a proportion of income. The boomers' prospects are partly dependent on participation in employment-based retirement plans. After decreases in the sponsorship rates, participation rates, and vesting rates of workers during the 1980s, all three percentages increased during the early 1990s. Data do not support the perception that the U.S. work force is becoming increasingly mobile. Tenure levels for prime age workers in the 1980s and beginning of the 1990s were higher than those of previous decades. Still, in response to competitive pressures, employers may not offer the security of paternalistic benefit packages as in the past. Various studies have reached different conclusions regarding the adequacy of the boomers' financial preparation for retirement. Evidence indicates that boomers, in general, will enjoy a retirement standard of living exceeding that of their parents. It is less clear whether they will maintain a standard of living in retirement comparable to that of their working years. To the extent they are willing to tap housing wealth, they would appear at this early stage to be in good shape. Federal fiscal policy decisions will impact boomers by affecting their disposable income today, and thus their ability to save, as well as the benefits they will receive in retirement through Social Security and Medicare. The boomers are 17 to 35 years away from age 65. Given heterogeneity of the boomers, research is needed to identify what specific groups within the generation are at risk and the magnitude of that risk. Groups that would now appear to be at risk to some degree include non-homeowners, the less educated, the single, and the youngest boomers.     

Are Baby Boomers Richer Than Their Parents? Intergenerational Patterns of Wealth Ownership in the United States

This study compares wealth ownership and mobility patterns among baby boomers and their parents to explore whether the baby boomers have fared as well during their working years and whether they will be as secure in retirement as their parents. Cohort comparisons using survey data indicate that baby boomers had accumulated more wealth as young adults than their parents had at a similar age. Estimates from a simulation model reveal that baby boomers had more wealth than their actual same‐sex parents at every stage of the life course. The simulation model also reveals that baby boomers were considerably more likely than their actual same‐sex parents to experience upward wealth mobility at each point in the life course. These results suggest that speculations that baby boomers may be the first generation to do worse than their parents are misleading.     

I Do … Want to Save: Marriage and Retirement Savings in Young Households

Increased policy and academic attention has been placed on promoting retirement savings early in the life course. This study investigates the extent to which retirement savings behavior among young persons, a population for which retirement savings is important but typically low, differs by marital status. We draw national survey data on young adult households (ages 22–35; N = 3,894) from the U.S. Federal Reserve Board's Survey of Consumer Finances (SCF). Results reveal considerable differences by marital status. Controlling for important characteristics, young adults who were married were more likely than all other groups (including cohabitors) to perceive retirement as an important savings goal and to have an individual retirement account. Married persons were more likely than their single counterparts to participate in a defined contribution pension plan. Single women fared particularly poorly on retirement savings outcomes. A range of possible theoretical links between marriage and retirement savings at young adulthood are discussed.     

Retirement Intentions of Same-Sex Couples

Summary

Retirement intentions of same-sex and opposite-sex couples were investigated. Data were drawn from the Cornell Couples and Careers Study. The sample consists of 32 women in same-sex relationships, 7 men in same-sex relationships, 30 men and women in cohabiting relationships, and 30 married men and women. Participants' responses to such questions as age expected to retire, age they began retirement planning, degree of financial planning for retirement, degree of preparation for housing and healthcare, and plans for post-retirement work and volunteering were analyzed. Female same-sex couples self-rate on financial planning for retirement to a significantly lower degree than married couples. The implications for post-retirement well-being and the need for financial planning are discussed.     

Age Discrimination and Early Retirement Policies:

As public policy issues, mandatory retirement and age discrimination are approached differently in Canada and the United States. The legal frameworks, enforcement procedures, and judicial decisions are distinct in the two jurisdictions. The United States, unlike Canada, has specific legislation to protect the rights of older workers, and has a centralized enforcement system. The differences between the two countries are accounted for by the greater emphasis on individual rights in he United States and on communitariamsm in Canada. The different policy choices of each society highlight the tensions inherent in North American labor markets. The United States seems to be in a better position to shift toward a labor-management policy which encourages older workers to remain in the workforce.     

Working Hours Flexibility and Timing of Retirement: Findings from Europe

This study investigates how flexibility in working hours affects retirement timing. It tests the assumption that decreasing weekly working hours delays retirement and extends working life. Using data from four waves of the Survey of Health, Ageing and Retirement in Europe (SHARE) and of the English Longitudinal Study of Ageing (ELSA), we analyze whether a shift from full-time to part-time work delays retirement. Results show that older workers who reduce their working hours retire earlier than those who stay in full-time employment. The effect is stronger in Central and Eastern Europe than in Scandinavian countries. No interaction effects for gender and work strain are found. We conclude that part-time work at the end of the career, as a means to extend working life, should be reevaluated.     

Career Pathways into Retirement in the UK: Linking Older Women's Pasts to the Present

Understanding of how women's experiences in retirement are shaped by their pre‐retirement lives is limited. In this paper we utilize an innovative mix of measures to examine the link between career histories and expectations and experiences of retirement. Analysis of timeline data capturing the long working lives of a sample of older women identifies five different pathways into retirement. We explore these trajectories in detail to determine how they are shaped and their links to different outcomes in later life. The analysis shows how different career histories unfold and how they shape expectations and experiences of retirement. Long, professional career pathways leave women feeling enabled in retirement, women following more fragmented pathways are more constrained, and some trajectories, including pathways involving transitions into professional careers in later life, can leave older women financially and emotionally vulnerable in older age.     

The retirement system in transition: the 2007 Retirement Confidence Survey

WORKERS SLOW TO SEE OR ADAPT TO A CHANGING U.S. RETIREMENT SYSTEM: The 17th annual wave of the Retirement Confidence Survey (RCS) suggests that American workers may be slow to recognize how the U.S. retirement system is changing, and those who are aware of these changes may not be adapting to them in ways that are likely to secure them a comfortable retirement. HALF OF WORKERS LESS CONFIDENT ABOUT PENSION BENEFITS: The RCS finds pension-plan changes by employers have left nearly half of workers less confident about the benefits they will receive from a traditional pension plan, but that those experiencing a decline in retirement benefits often fail to react constructively. Moreover, although Americans will rely increasingly on 401(k) retirement savings plans and other personal savings and investments to fund their retirement security, data suggest that many may not follow professional investment advice when it is offered to them. MANY WORKERS COUNTING ON BENEFITS THAT WON'T BE THERE: Many workers are counting on employer-provided benefits in retirement that are increasingly unavailable. Only 41 percent of workers indicate they or their spouse currently have a defined benefit pension plan, yet 62 percent say they are expecting to receive income from such a plan in retirement. Likewise, workers are as likely to expect as retirees are to receive retiree health insurance through an employer, even though the number of employers offering this benefit to future retirees is declining. MANY WORKERS UNLIKELY TO HEED INVESTMENT ADVICE EVEN IF THEY GET IT: More than half of workers indicate they would be likely to take advantage of professional investment advice offered by companies that manage employer-sponsored retirement plans. However, two-thirds of these workers say they would probably implement only some of the recommendations they receive and 1 in 10 think they would implement none of them. AMERICANS OVERESTIMATE LONG-TERM CARE COVERAGE: One-quarter of workers and more than one-third of retirees report they have long-term care insurance (separate from health insurance, Medicare, and Medicaid) to help pay for care they might need in a nursing home, assisted living facility, or at home. But only 10 percent of Americans age 65 and older are estimated to have had private long-term care insurance in 2002, suggesting that many are counting on coverage they do not actually have. MOST SAVINGS LEVELS ARE MODEST: Almost half of workers saving for retirement report total savings and investments (not including the value of their primary residence or any defined benefit plans) of less than $25,000. The majority of workers who have not put money aside for retirement have little in savings at all: Seven in 10 of these workers say their assets total less than $10,000. CONTINUED IGNORANCE ABOUT SOCIAL SECURITY COVERAGE: Despite the longstanding increase in the eligibility age for Social Security, only a small minority of workers are aware of the age at which they can receive full retirement benefits from Social Security without a reduction for early retirement.     

Evidence that Self-Regulatory Mode Affects Retirement Savings

We examine how self-regulatory motivations of locomotion (initiation) and assessment (evaluation) are related to retirement wealth in middle-aged and older Americans. We test a hypothesis that high locomotion and some assessment levels predict high wealth levels. We use two national data sets: the 2008 Health and Retirement Study (N?=?6,464) and the 2005 Midlife in the United States (N?=?4,963). We found that a combination of high locomotion and moderate assessment motivation can maximize wealth accumulation. By creating this combination of locomotion and assessment motivations, policy interventions can be more effective in motivating wealth accumulation for retirement, such as a required annual review of retirement savings plans and understandable disclosure of the plans' costs.     

Attitudes About Working Beyond Normal Retirement Age: The Role of Mandatory Retirement

The Dutch government abolished mandatory retirement for national-level civil servants in 2008, but not for employees in other sectors. This study analyzes whether national-level civil servants have different attitudes and plans about working beyond normal retirement age than employees in other sectors. Results show no clear differences between the groups. A national ban on mandatory retirement would presumably not lead to many more older workers continuing to work beyond normal retirement, but would need to be integrated in a much broader policy reform that also addresses employment protection legislation and seniority-based wages.     

Medicare Privatization and the Erosion of Retirement Security

This paper describes initiatives to privatize the Medicare program over the last 10 years and the implications of these initiatives for the future of retirement security. Our analysis focuses on the privatization provisions of the Medicare Modernization Act, which is largely designed to benefit the corporate health care sector without containing costs or significantly reducing the threat of rising health care costs to the economic security of current and future retirees. In fact, as designed, the Medicare Modernization Act is likely to increase the threat to retirement security in the years ahead. We conclude with a series of policy alternatives to the neoliberal agenda for the privatization of Medicare.     

Reported Reasons for Retirement: A Study of Recently Retired Workers

The normal retirement age in the United States is gradually increasing from 65 to 67 (by the year 2027) as provided by the 1983 Amendments to the Social Security Act. One can raise the question, "Who will be the most affected by this change?" This article presents the findings from a study that investigated the relationship between the primary reason given by recently retired workers for their retirement and their economic and demographic backgrounds. A logistic regression analysis was performed using data from the 1982 New Beneficiary Survey concerning involuntary reasons. A major finding was that economically disadvantaged workers tended to retire for involuntary reasons. Therefore, policymakers need to consider the establishment of policies that would protect such workers from the adverse financial impact of the increase in the normal retirement age.     

Bridging the Gap: Anticipated Shortfalls in Future Retirement Income

Determining an appropriate and desirable income replacement rate is one of the keys to developing a successful personal financial plan for retirement. In the present investigation, we examined workers?? expectations of the pre-retirement income they believed would be necessary in order to have a ??good?? retirement relative to the income they anticipated they would receive. Analyses revealed an expected income shortfall, the magnitude of which was positively related to one??s income and age. Sex was also related to the magnitude of the expected shortfall, with women anticipating a larger financial discrepancy than men. Finally, a sex by marital status interaction emerged in which single women were found to have a larger shortfall than single men and married individuals of both sexes. Findings are discussed in terms of the importance of interventions aimed at educating workers to understand the value of selecting a reasonable retirement income replacement rate.     

Income Adequacy and Social Security Differences Between the Foreign‐Born and U.S.‐Born1

This paper projects retirement income and Social Security taxes and benefits among the foreign‐born and U.S.‐born in the United States. Focusing on the Depression and the late baby boom birth cohorts, we find that foreign‐born persons have higher poverty rates than the U.S.‐born, and as a group do not receive higher lifetime net benefits from Social Security than do the U.S.‐born. However, persons from the late baby boom cohort who immigrated after 1969 have higher projected rates of return in Social Security than do U.S.‐born persons of the same birth cohort.