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Delayed retirement among Americans may bolster future of Social Security and Medicare, study finds
Date:4/7/2010

An unprecedented upturn in the number of older Americans who delay retirement is likely to continue and even accelerate over the next two decades, a trend that should help ease the financial challenges facing both Social Security and Medicare, according to a new RAND Corporation study.

While government projections suggest the number of older Americans who remain employed is likely to plateau over the coming decade, RAND researchers say a more likely scenario is that the increase in delaying retirement that began in the late 1990s is likely to gain speed.

Because the trend holds broad benefits for the nation, lawmakers may want to consider reforms that would dismantle barriers that discourage some older people from remaining employed and even consider changes that would encourage employers to hire older workers.

"Changes in pensions, longer life expectancy, less disability at older ages and more women in the workforce are all trends that are gaining momentum and are likely to cause more Americans to delay retirement," said Julie Zissimopoulos, study co-author and an economist at RAND, a nonprofit research organization. "Even without new policy changes to encourage the behavior, there are good reasons to conclude that the trend will be propelled forward."

In a report published in the Journal of Economic Perspectives, RAND researchers examine a wide array of evidence that suggests that delayed retirement or partial retirement are likely to increase and discuss the many ways that the tectonic shift in work patterns may benefit the United States.

The nation's population is growing older as Baby Boomers reach retirement age, leaving proportionately fewer people in the workforce to pay taxes and support the social programs that provide a safety net to older Americans. Longer work lives for many Americans will help to ease that imbalance and the financial stress it puts on Social Security and Medicare, according to
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Contact: Warren Robak
robak@rand.org
310-451-6913
RAND Corporation
Source:Eurekalert

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