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Involuntary retirement, U.S. social security program participation and the Great Recession

PFM, Vol. 14 No. 3, (2014)

Involuntary retirement covers economic and health related dislocations. Over 1992-2011, three-in-ten retirees in the Health and Retirement Study (HRS) report an involuntary retirement. Roughly half of these involuntary retirements are health-related. Following the Great Recession, involuntary retirement in the U.S. grew much faster than voluntary retirement. I find that while the population receiving Social Security retirement benefits grew 6% slower than average, the population receiving no public retirement or disability benefits grew 79% faster than average and the population reporting health-related involuntary retirement grew 270% faster than average. While incomes are found to have fallen for all retiree groups, those reporting health-related involuntary retirements are found to have retirement income declines of 38% and the lowest pre-retirement incomes of any measured group. These findings suggest patterns of vulnerability that have important implications for proposals seeking to reform the U.S. Social Security Program.

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