Health of near-retirees is worsening as retirement age rises

Americans in their late 50s and early 60s who are approaching retirement already have more health issues and limitations than prior generations did when they were that age, according to a recent study in the journal Health Affairs. Meanwhile, the age at which retirees can collect full benefits from Social Security is creeping upward. Americans who are now age 63 will have to wait until age 66 to receive full retirement from Social Security; those who are now age 57 won’t get full benefits until age 67.

“We found that younger cohorts are facing more burdensome health issues even as they have to wait until an older age to retire, so they will have to do so in poorer health,” said study co-author Robert Schoeni, PhD, an economist and demographer at the University of Michigan’s Institute for Healthcare Policy & Innovation, in Ann Arbor, MI.

Almost 20% of Americans age 65 and older are now working, according to the US Bureau of Labor Statistics. That’s the highest rate of seniors holding a job since the early 1960s, before the US enacted Medicare.

For this study, the researchers used two nationally-representative data sets to group older Americans into five cohorts: those born in 1937 or earlier (who could receive their full Social Security benefits at 65), those born during 1938-1942 (who could claim benefits between age 65 and 66), those born from 1943-1954 (who could claim at age 66), those born between 1955 and 1959 (who can claim full benefits between ages 66 and 67), and those born in 1960 and after, who have to wait until age 67 to collect full Social Security benefits.

Then the researchers looked at the prevalence of poor health in the different cohorts using different indicators of morbidity:

• Cognitive functioning: People in younger cohorts, who have to wait longer to receive their full Social Security benefits, tended to have higher rates (11.5%) of poor cognition in their 50s than the older cohort groups had (9.2%) at a similar age.
• Physical functioning: Participants had roughly similar rates of physical functioning—such as being able to climb a flight of stairs without resting, lifting, and carrying 10 pounds, or walking several blocks—across age cohorts.
• Activities of daily living (ADLs): Younger groups with a higher retirement age performed worse at ADLs. When all individuals were evaluated for ADLs at ages 58 to 60, the group born from 1955-1959 had a 12.5% rate of ADL limitation compared with the cohort born from 1938-1942 who had an 8.8% ADL limitation rate.
• Self-rated general health: All participants had been asked at around age 50 to rate their own health. More individuals in the younger cohorts rated their health as “poor” or “fair” at around age 50 than those in the older cohorts.

The researchers also investigated differences between birth cohorts by education level. Findings were dramatic. People with less than 12 years of education had significantly greater ADL and cognitive limitations and worse self-rated health than those who had more than 12 years of education. Even so, rates in all morbidity categories were worse in younger cohorts than in older cohorts across each education level.

“Other research has found similar trends in the health of Americans who are now in the 50s and 60s, but this is the first study to look specifically at … cohorts of Americans by Social Security retirement age, which has specific policy implications,” said the study’s lead author HwaJung Choi, PhD, also an economist and demographer at the U-M Institute for Healthcare Policy & Innovation.

Certain groups, such as the Business Roundtable (an association of CEOs), have challenged the current policy and petitioned to raise the Social Security retirement age even higher.

Initial changes to the Social Security retirement age were made during the Reagan era, when people who are now in their 50s and 60s were only in their 20s and 30s. Demographers expected that Americans at that time were likely to live longer on average than previous generations.

“They were focusing on life expectancy, not morbidity, and implicitly assuming that improvements in mortality would be accompanied by similar improvements in health or morbidity,” Dr. Choi said.

“Now they are retiring and we know what their health is like—and it’s not better,” Dr. Schoeni added. “In fact, some aspects of their health are worse than for the people who came before them.”

He further explained: “As policymakers talk of making the retirement age even later, these findings suggest that to fully understand the benefits and costs of such a policy, we must realize that raising the retirement age may further exacerbate the inequality between cohorts born only a few years apart, because the younger ones may find it more challenging to work beyond age 67.”