Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108AGING IN THE 21S T CENTURY 30 both health and the full range of potential economic influences like Social Security and pensions. Gustman and Steinmeier (2014) address this issue, taking an approach that traces the impact of smoking, obesity, alcohol con- sumption and depression on the onset of chronic health conditions and the consequent evolution of disability. Their approach includes major sources of uncertainty for older workers, such as job loss, loss of health insurance, large medical and nursing home expenditures, uncertainty about the avail- ability of SSDI, life expectancy, and returns on investments. At age 61, 58% of men in good health work full time whereas only 30% of men in poor health and 10% of men in terrible health work full time. The study poses several hypothetical scenarios. In a situation in which everyone has the health status of the average worker, the mean retirement age would increase by about one year. Whereas diabetes has only a minor impact on retirement, smoking has a relatively large effect on work, reducing the average retirement age by four to five months. Interestingly, including detailed modeling of health does not change the role of economic influences on retirement, which are explored in the next section. Program Effects on Work Decisions about working longer are strongly influenced by public and private programs. In the private sector, the shift from employer-sponsored DB to defined contribution (DC) pension plans and rollbacks of retiree health insurance coverage have tended to discourage early retirement. Public policy is more mixed. The abolition of mandatory retirement predated the 1990s turnaround in retirement age, and Social Security began increas- ing the age at which retirees receive full benefits with the birth cohort of 1938, who turned 65 early in the 21st century. Removing the earnings test and increasing the delayed retirement credit may also influence work incentives. Conversely, eligibility for SSDI has expanded, which could encourage earlier retirement. Research using HRS data attempts to assess the influence of these and other policy changes that may influence work. Changes to Social Security The availability of Old Age and Survivors Insurance (OASI) through Social Security has a profound impact on retirement. For eligible workers, the program provides full retirement benefits at age 65 — known as the full retirement age (FRA) — gradually increasing to 67 in coming years. The program also provides for an Early En- titlement Age (EEA) at age 62. Claiming benefits at 62 reduces their amount by 25% compared to claiming at the FRA. A strong incentive to retire later is built in: the full benefit rises by 8% for ev- ery year claiming is delayed between ages 66 and 70. Overall, this means that the benefit amount is 76% more when retiring at age 70 rather than 62. These numbers refer to the average person, however. Claiming early would actually make more sense for a person with a much shorter than average life expectancy. Other factors, like marital status and the interest rate figure in on the relative wisdom of delaying claiming. HRS data are linked at the individual level with benefits information from Social Security. This allows researchers to use the rich information in the HRS to study choices about benefit claiming. One study investigates the predictors of claiming between 1992 and 2008 (Shoven and Slavov 2012). People do not seem to be strategic in their claiming behavior in terms of maximiz- ing their potential benefit. The benefit adjustment from delaying OASI benefit receipt is better than actuarially fair, especially for two-earner households. Similar to results found in Gustman and Steinmeier (2005), 42.6% of people claim benefits just after age 62 with another spike in claiming around age 65. The decision to leave the labor force is the strongest predictor of claiming, whereas higher education is associated with delaying claiming. Glickman and Hermes (2015) find that those who work in physically demanding blue-collar jobs are 55% more likely to claim benefits early. Those with lower expectations of living to age 75 are also more likely to claim early. Gustman and Steinmeier (2015) report on an update of their retirement model that tries to explain actual patterns in Social Security claims data. Time preference, or the value a person plac- es on something at an earlier rather than a later time, helps explain claiming behavior. Those with a low time preference might be likely to delay Increasing the Social Security Early Entitlement Age by two years to 64 would encourage more workers to remain in full-time employment. At age 61, 58% of men in good health work full time whereas only 30% of men in poor health and 10% of men in terrible health work full time.