Migration of Retirement‐Age Blacks to Nonmetropolitan Areas in the 1990s

Older blacks migrated to nonmetropolitan (nonmetro) communities in the 1990s to a degree not true of the past. Some of the nonmetro counties that attracted them are well‐known retirement areas also favored by other retirees, mostly whites. Two‐thirds of black retirement counties, however, are areas in the Old South that are not attracting other retirees at a substantial rate, if at all. Although the data indicate significant rates of retirement‐age blacks migrating to 85 nonmetro counties, most migration by older blacks is to metro destinations.     

‘Under the wife's feet’: renegotiating gender divisions in early retirement

There has rightly been much recent sociological concern with the effects of recession and the restructuring of the economy on family relationships. One important aspect of recent economic changes has been the pressure on older people to leave the workforce before the age of conventional retirement. Male early retirement has been a significant factor in accounting for the dramatic fall in the economic participation rates of older male workers over the last decade. Yet early retirement has been a relatively neglected topic in social scientific literature. Studies of unemployed and redundant males have tended to suggest that there is little renegotiating of the domestic division of labour within the home due to the ways in which traditional notions of masculine identity are called upon to protect the position of the unemployed male. This paper reports findings relating to these issues from a study of men from West Yorkshire who had taken early retirement from the local chemical industry. These findings suggest considerably more renegotiation than studies of unemployed and redundant males but neither the amount or type of such renegotiation seemed to be related to either marital disharmony or quality of life in retirement.     

GENDER-COHORT SUCCESSION AND RETIREMENT AMONG OLDER MEN AND WOMEN, 1951 TO 1984

Long-term trends in occupational change and retirement policy have influenced the relative labor force participation and retirement patterns of subgroups of the older population. Structural changes in the economy have had a large impact on older men and women, pushing the former out of the labor force while pulling the latter in. Meanwhile, the expansion of pension programs for the aged has generally increased the early retirement of men under age 65. Time-series analyses of these trends between 1951 and 1984 point to the specific influences of these factors on gender-cohorts.     

Expenditure patterns of older Americans, 2001-2009

PRE- AND POSTRETIREMENT EXPENSES: Before retirement, people pay FICA taxes, incur work-related expenses, and set aside money for retirement. But after retirement, most people have different financial obligations, and, as a result, retirees may still be able to maintain their level of preretirement well-being with very different income levels. Studying income, expenditures, and wealth-holding patterns together provides a more complete idea of how people are doing in terms of being able to afford retirement than arbitrary estimates such as income replacement ratios. UNIQUE DATA: This Issue Brief examines the expenditure patterns of the older section of the population. It uses data from the Consumption and Activities Mail Survey (CAMS), a supplement to the Health and Retirement Study (HRS), conducted by the Institute for Social Research at the University of Michigan, contains detailed expenditure data on 32 categories, and follows the same group of individuals over eight years In addition, the income and wealth data available in the HRS are used to establish the financial standing of older households. DECLINING EXPENSES: Household expenses steadily decline with age. With the age 65 expenditure as a benchmark, household expenditure falls by 19 percent by age 75, 34 percent by age 85, and 52 percent by age 95. HOME EXPENSES: Home and home-related expenses remain the single largest spending category for older Americans. On average, those over age 50 spend around 40-45 percent of their budget on home and home-related items. RISING HEALTH CARE EXPENSES: Health-related expenses are the second-largest component in the budget of older Americans. It is the only component which steadily increases with age. Health care expenses capture around 10 percent of the budget for those between 50-64, but increase to about 20 percent for those age 85 and over. DEMOGRAPHIC GROUPS: Singles, blacks, and high school dropouts do not have a sound financial standing in retirement. Their expenditures exceed their income and they hold very little financial wealth. The bottom income quartile, which includes mostly these demographic groups, has the weakest financial standing in retirement. LONG-TERM CARE and PRIVATE HEALTH INSURANCE: Long-term care and some form of private health insurance coverage have a significant effect on increased spending by older households.     

Individual and institutional push and pull factors as predictors of retirement timing in Europe: A multilevel analysis

The number of retired people in Europe has increased significantly in recent decades. It remains unclear, however, whether individuals are more likely to be pulled toward retirement by their expectations about life after retirement than they are to be pushed out of the labour market due to poor health or dislike of one's job. The fact that retirement timing differs rather considerably between European countries suggests that not only micro, but also macro push (i.e. labour market constraints) and pull (i.e. economic incentives) factors influence retirement decisions. This duality heightens the need to determine the influence of micro-level and macro-level push and pull indicators on the retirement timing of older workers (50 +) in Europe. Results are obtained performing multilevel event history analysis using longitudinal micro data from the first (2004/05) and second (2006/07) waves of the Survey of Health, Ageing and Retirement in Europe and macro data derived from the Organisation for Economic Cooperation and Development (OECD) and Eurostat. The results indicate that at the individual level, older workers are pushed out due to health problems as well as being attracted towards retirement to spend time with their grandchildren. At the institutional level, financial incentives such as a high implicit tax on continued work and high expenditures on early exit schemes make retirement attractive, whereas the institutional push context is of lesser importance.     

Working Longer May Be Good Public Policy,But It Is Not Necessarily Good for Older People

Older people are facing a changed set of expectations regarding work and retirement. Until quite recently early retirement was being encouraged. Today's older workers, however, are contemplating longer working lives amid policy concerns about the costs of social welfare associated with an aging population. While working longer is, almost universally, being promoted as a social and individual good this article argues that this policy shift is unlikely to change the situation of many older workers who would have needed to continue working anyway. It also argues that the emphasis on prolonged employment undervalues engagement in activities beyond employment. As well, it argues that the emphasis on prolonging employment neglects to account for the attendant risks for many of continuing to work or having to seek work and the potential health- and well-being-enhancing effects of retirement.     

Increasing older persons' employment in Finland: in search of a new strategy.

Using Finland as a case study, it is argued that early retirement will probably no longer be used on a large scale to reduce older-worker labor-force participation and unemployment among older workers. Instead, new strategies are needed to enhance the ability of older workers to remain productive and in the labor force, and to facilitate the reintegration of unemployed older persons back into working life. Both tasks require massive pioneering efforts. Reducing unemployment rates among older workers, particularly, requires completely new kinds of labor-market measures.     

Older Workers: The ‘Unavoidable Obligation’ of Extending Our Working Lives?

Older workers are becoming an increasing topic of research interest and policy concern as the populations of Europe, the United States and many other countries age. Some commentators argue that living longer means that there will be an ‘unavoidable obligation’ to work for longer as well. This article considers the reasons for concern about an ageing workforce. It then looks at the different literatures, which seek to research and understand the position of older workers. It provides a snapshot of the work that those over 50 years of age in the UK currently do and poses the question of whether we want to work for longer or whether a culture of early retirement prevails. It concludes by arguing for a more fine grained understanding of the composition of the older worker cohort, differentiated by class, gender and race and for more research on flexible work, gradual retirement and managing health at work.     

Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society

As neoliberal ideology and policies gained a foothold in the early 1980s, the social safety net for older Americans contracted. Responsibility for the risks associated with aging, namely retirement income and healthcare costs, was increasingly transferred from the state to the individual. Using data from the Consumer Bankruptcy Project, we report that since 1991, there has been more than a twofold increase in the rate at which older Americans (age 65 and over) file for consumer bankruptcy and an almost fivefold increase in the percentage of older persons in the U.S. bankruptcy system. This magnitude of growth is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. Respondents report that inadequate income and unmanageable healthcare costs are the chief reasons for their bankruptcies. Our findings suggest that neoliberal policies that offload healthcare costs and retirement savings onto older Americans may facilitate their bankruptcy filings.     

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.     

Aging With Rising Risk: Have Older Households Experienced Faster-Growing Risk Exposure Than Younger Ones Since the 1990s?

Financial markets have been characterized by boom and bust cycles since the 1980s, while the responsibility for managing retirement wealth has increasingly shifted onto individual households at the same time. Policy makers and experts have expressed concern over rising risk exposure among older householders, who appear to be increasingly exposed to the growing financial risks just as they near retirement. We consider household data from the Federal Reserve’s Survey of Consumer Finances from 1989 to 2010 to analyze the correlation between age and risk exposure. We test whether older householders’ risk exposure has indeed grown over time, whether it has increased more than that of younger householders, whether changes in the demographic composition of older householders have contributed to older households’ rising risk exposure, and the degree to which increases in risk exposure can be traced to a growing concentration of household assets held in stocks and housing and to rising householder indebtedness. Our results indicate that risk exposure has grown more for older householders than for younger ones, that demographic changes among older householders have contributed to additional increases in older householders’ risk exposure, and that the growth of older householders’ risk exposure is driven more by rising risky asset concentration and less by greater indebtedness.     

Retirement plan participation and features and standard of living of Americans 55 or older

This Issue Brief is the third in a series of Employee Benefit Research Institute (EBRI) publications based on data collected in 1998 and released in 2002 as the Retirement and Pension Plan Coverage Topical Module of the 1996 Survey of Income and Program Participation (SIPP). This report completes the series by examining the survey's more detailed questions concerning workers' employment-based retirement plans. Specifically, it examines the percentage of workers who are participating in a plan, and also workers' reasons for not participating in a plan when working in a job where a plan is sponsored; the features of, or decisions made concerning salary reduction plans; historical participation in employment-based retirement plans; and a comparison of the standard of living of individuals age 55 or older with their living standard in their early 50s. As of June 1998, 64.3 percent of wage and salary workers age 16 or older worked for an employer or union that sponsored any type of retirement plan (defined contribution or defined benefit) for any of its employees or members (the "sponsorship rate"). Almost 47 percent of these wage and salary workers participated in a plan (the "participation rate"), with 43.2 percent being entitled to a benefit or eligible to receive a lump-sum distribution from a plan if their job terminated at the time of survey (the "vested rate"). The predominant reason for choosing not to participate in a retirement plan was that doing so was unaffordable. The eligible participation rate for salary reduction plans was 81.4 percent. Fifty-six percent of all workers have participated in some type of retirement plan sometime during their work life through 1998. For those ages 51-60, almost 72 percent have ever participated in a plan. The median account balance in salary reduction plans in 1998 was $14,000. In 1998, 12.9 percent of salary reduction plan participants eligible to take a loan had done so, and the average outstanding loan balance was $5,196. Nearly 80 percent of those age 55 or older reported that their standard of living is about the same or better now than it was when they were in their early 50s. The incidence of both pension income and health insurance from a former employer had a significant impact on retirees' ability to maintain their standard of living. In addition, those who spent their entire most recent lump-sum distribution were more likely to have a much worse standard of living in retirement than those who rolled over their entire most recent distribution.     

Increasing Older Persons' Employment in Finland

ABSTRACT

Using Finland as a case study, it is argued that early retirement will probably no longer be used on a large scale to reduce older-worker labor-force participation and unemployment among older workers. Instead, new strategies are needed to enhance the ability of older workers to remain productive and in the labor force, and to facilitate the reintegration of unemployed older persons back into working life. Both tasks require massive pioneering efforts. Reducing unemployment rates among older workers, particularly, requires completely new kinds of labor-market measures.     

Models of accepting an early retirement incentive

The presence of special early retirement incentives has changed the work environment for older workers. It is of interest to know how existing models of the timing of the pension acceptance decision function in an incentive environment. Furthermore, it is of interest to note the similarities or differences between males and females with regard to retirement behaviors. In this study, a basic utility maximization model, an expanded model, and an interactive model are applied to the acceptance of an early retirement pension incentive; probabilities of acceptance range from .18 to .39. Acceptance behavior without the incentive is simulated, with probabilities of acceptance ranging from .11 to .33. Addition of a set of socioeconomic and psychological variables and a vector of interactive variables is found to improve the basic model.The author would like to thank W. Keith Bryant, Olivia Mitchell and several anonymous reviewers for comments on earlier drafts. Any remaining errors are, of course, my own. Acknowledgement is also given to the Cornell University Agricultural Experiment Station for funding assistance.Jeanne M. Hogarth is an associate professor in the Department of Consumer Economics and Housing, Cornell University, Ithaca, NY 14853. Dr. Hogarth received her Ph.D. from The Ohio State University, Department of Family Resource Management and includes retirement decision making, such as the timing of retirement and use of financial resources during retirement, among her current research interests.     

Demographic and employment shifts: implications for benefits and economic security

This Issue Brief examines factors affecting the population's age distribution and composition, such as mortality rates, fertility rates, and immigration. In addition, it examines factors affecting labor force composition, such as immigration, increased labor force participation of women, and retirement trends, and discusses the potential impact of these changes on publicly financed programs: Medicare, Medicaid, Social Security, and federal employee retirement systems. The discussion also highlights the implications of these population and labor force changes on employers, employees, and retirees. The elderly population--now 31.8 million, representing 12.6 percent of the population--is projected to experience tremendous growth between 2010 and 2030, when the baby boom generation reaches age 65, rising from 39.7 million, or 13.3 percent of the population, to 69.8 million, or 20.2 percent of the population. Growth in the elderly population has implications for retirement and health care systems. Population projections suggest that the traditionally pyramid-shaped work force, with a proportionately greater number of younger workers than older workers, will be replaced with a more even age distribution. Consequently, significant and continued modifications to benefit packages, such as changes in compensation structures in which earnings automatically rise with age, are likely to occur. Women's labor force participation began to accelerate in the mid-1950s, rising 75 percent among women aged 25-44 in 1991, although there is some indication that this growth may be flattening. With women comprising a greater part of the labor force, employers will be encouraged to develop and implement programs to better accommodate their needs. Increased life expectancy, a decreased percentage of entry level workers, changes in Social Security's normal retirement age from 65 to 67, and employer plans to raise the normal age of retirement or provide incentives to delay retirement, could raise the average age of retirement. However, other factors, such as poor health, other sources of retirement income, and individual preferences for retirement, could still dominate the retirement decision. The combination of increased average life expectancy guaranteeing more years of retirement to finance and rising dependency ratios increases the future cost of Social Security financing. Medicare financing is also an important policy issue because the program is projected to experience financial difficulties in the short term, resulting from explosive health care costs. In addition, Medicaid expenditures are consuming increasing amount of shrinking state budget resources--a large portion of which is used to finance nursing home care for a growing elderly population.     

Potential consequences of raising the Social Security eligibility age on low-income older workers

To examine the potential consequences of raising the Social Security retirement age on future cohorts of low-income elders, this study, based on data from the Health and Retirement Study, 1992-1994, identifies factors that may hinder or facilitate continuous employment among older workers born between 1931 and 1941. Specifically, following the analysis of labor-force participation rates and self-reported reasons for non-work, multivariate logistic regression models tested the relationship between individual strengths and constraints, social-structural opportunities and constraints, and economic need variables and the likelihood of work. The findings show that for both men and women, having disabilities was the most significant predictor of non-work. Racial differences, especially in men's labor-force participation rates, appeared to be due in large part to significant racial differences in disability rates. A higher proportion of blacks and Hispanics than whites also reported that they were unemployed. Based on the findings, raising the Social Security eligibility age is likely to result in increased numbers of Disability Insurance (DI) claimants, and the fiscal impact of such an increase needs to be examined. The need to assist unemployed older persons is also discussed.     

Naturally Occurring Retirement Communities

Naturally occurring retirement communities (NORCs) are defined as housing developments that are not planned or designed for older people, but which over time come to house largely older people. NORCs are of interest because they differ from the stereotypical retirement community (RC) and yet are probably the most common form of RC in the U.S. An analysis of NORCs is presented by examining their evolution and comparing them to planned RCs and community-based housing. A supportive neighborhood emerges as the common denominator in each living arrangement.     

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.     

The retirement behavior of workers covered by union and nonunion pension plans

Previous authors have noted that there are significant differences between the provisions of union and nonunion pension plans. I present evidence that sheds light on two hypotheses. The first (Parsons, 1983) posits that union pensions should encourage earlier retirement because productivity falls as workers age, but union rules prohibit firms from lowering wages. The second (Freeman, 1985) argues that union pension plans reflect the preferences of older, more senior workers. I find some support for both hypotheses. I conducted some of the research for this paper as an economist with Unicon Research Corporation. I thank the National Institute on Aging for funding (grant number 5 RO1 AG06133-03). I also thank Fran Horvath, Mark Kennet, Mark Loewenstein, Bob McIntire, Tom Plewes, Bill Wiatrowski, and three anonymous referees for useful comments. All views and opinions expressed herein are the author's and do not necessarily reflect those of the Bureau of Labor Statistics, the National Institute on Aging, or Unicon Research Corporation.     

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.