Poor health leads to an earlier retirement, and a National Bureau of Economic Research paper documents just how much health matters. In a simulation of the effect of health on retirement based on data from the Health and Retirement Study, the analysis computes the percentage of men aged 54 or older who work full-time, part-time, or not at all by self-reported health status.
The differences are striking. Among men aged 62, the percentage who work full-time is 44 percent for those in good health, 39 percent for those in fair health, 18 percent for those in poor health, and 4 percent for those in terrible health. Conversely, the percentage of men aged 62 who are fully retired rises from 41 percent for those in good health to 46 percent for those in fair health, 68 percent for those in poor health, and 87 percent for those in terrible health.
The study also examines various types of health problems and behaviors to determine their impact on retirement. Smoking, for example, reduces the average age at retirement by four to five months.
Source: National Bureau of Economic Research, The Role of Health in Retirement, NBER Working Paper 19902
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