Early Retirement Window Painless?
Professor David Demko, PhD
AgeVenture News Service
Many workers contemplate "early retirement". Some actually follow through. To what do we attribute the difference between those who DO NOT retire early and those who DO? Those who choose to jump through the early retirement window seem to be those who are presented with an early retirement option. Think about it. "Option" is an empowering word. It implies freedom of choice. Could be that an optional transition, in this case from work to retirement, is less emotionally painful then a later, forced retirement based on ill-health or unsatisfactory job performance. New research findings appear to agree with that line to thinking.
About 15 percent of Americans age 51-61 who were working
in 1992 had received an early retirement offer from their employer by the year 2000, according to a University of Michigan study. Those receiving an offer were 12 percent less likely to be employed in 2000 than those who did not receive such an offer, according to Charles Brown, an economist with the U-M Institute for Social Research (ISR) and the National Bureau of Economic Research (NBER).
Brown says, “... eight years worth of early-out offers have reduced the 2000 employment rate of this age group by about two percent.” This illustrates that such "early-out" windows of opportunity may be an important factor in understanding recent changes in employment by older workers.
His analysis is based on data from the U-M Health and Retirement Study, which surveys a nationally representative sample of more than 20,000 Americans over the age of 50 every two years, with funding from the National Institute on Aging.
Information on the prevalence and impact of early-retirement windows is not generally available in national household surveys, Brown notes, with most of what’s known to date coming from case studies of individual employers and client surveys conducted by compensation consultants.
The new findings from the U-M Health and Retirement Study provide the first national data on trends in early retirement options. The study also follows workers in order to gain further insights. For example, do those who "early retire" from one workplace turn around and go to work elsewhere? Or, do these early-out workers retire altogether after accepting the early retirement option from their employer? The University of Michigan's new retirement study should soon offer some answers.
See related articles in the AgeVenture Headline archives.
Will Boomers Retire Retirement?
Retirement Doesn't Work
Pension Penchant Rallies Retiree Readiness
Gap Between Retirement Planning and Action
Pre-retirees Say Not Working Isn't Working
Read more articles on Aging and Retirement in America.
AgeVenture Lifestyles Feature Columns.
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