b'AGING IN THE 21ST CENTURYboth health and the fullAt age 61, 58% of men in good health work fulla person with a much shorter than average life range of potential economictime whereas only 30% of men in poor health andexpectancy. Other factors, like marital status and influences like Social10% of men in terrible health work full time. the interest rate figure in on the relative wisdom Security and pensions.of delaying claiming. HRS data are linked at the Gustman and Steinmeierindividual level with benefits information from (2014) address this issue, taking an approach thatpolicy is more mixed. The abolition of mandatorySocial Security. This allows researchers to use traces the impact of smoking, obesity, alcohol con- retirement predated the 1990s turnaround inthe rich information in the HRS to study choices sumption and depression on the onset of chronicretirement age, and Social Security began increas- about benefit claiming.health conditions and the consequent evolution ofing the age at which retirees receive full benefitsOne study investigates the predictors of disability. Their approach includes major sourceswith the birth cohort of 1938, who turned 65claiming between 1992 and 2008 (Shoven and of uncertainty for older workers, such as job loss,early in the 21 stcentury. Removing the earningsSlavov 2012). People do not seem to be strategic loss of health insurance, large medical and nursingtest and increasing the delayed retirement creditin their claiming behavior in terms of maximiz-home expenditures, uncertainty about the avail- may also influence work incentives. Conversely,ing their potential benefit. The benefit adjustment ability of SSDI, life expectancy, and returns oneligibility for SSDI has expanded, which couldfrom delaying OASI benefit receipt is better investments. At age 61, 58% of men in good healthencourage earlier retirement. Research using HRSthan actuarially fair, especially for two-earner work full time whereas only 30% of men in poordata attempts to assess the influence of these andhouseholds. Similar to results found in Gustman health and 10% of men in terrible health workother policy changes that may influence work.and Steinmeier (2005), 42.6% of people claim full time. The study poses several hypotheticalbenefits just after age 62 with another spike in scenarios. In a situation in which everyone hasChanges to Social Security claiming around age 65. The decision to leave the the health status of the average worker, the meanThe availability of Old Age and Survivorslabor force is the strongest predictor of claiming, retirement age would increase by about one year.Insurance (OASI) through Social Security haswhereas higher education is associated with Whereas diabetes has only a minor impact ona profound impact on retirement. For eligibledelaying claiming. Glickman and Hermes (2015) retirement, smoking has a relatively large effect onworkers, the program provides full retirementfind that those who work in physically demanding work, reducing the average retirement age by fourbenefits at age 65known as the full retirementblue-collar jobs are 55% more likely to claim to five months. Interestingly, including detailedage (FRA)gradually increasing to 67 in comingbenefits early. Those with lower expectations of modeling of health does not change the role ofyears. The program also provides for an Early En- living to age 75 are also more likely to claim early.economic influences on retirement, which aretitlement Age (EEA) at age 62. Claiming benefitsGustman and Steinmeier (2015) report on explored in the next section. at 62 reduces their amount by 25% compared toan update of their retirement model that tries to claiming at the FRA. A strong incentive to retireexplain actual patterns in Social Security claims Program Effects on Work later is built in: the full benefit rises by 8% for ev- data. Time preference, or the value a person plac-Decisions about working longer are stronglyery year claiming is delayed between ages 66 andes on something at an earlier rather than a later influenced by public and private programs. In the70. Overall, this means that the benefit amount istime, helps explain claiming behavior. Those with private sector, the shift from employer-sponsored76% more when retiring at age 70 rather than 62.a low time preference might be likely to delay DB to defined contribution (DC) pension plansThese numbers refer to the average and rollbacks of retiree health insurance coverageperson, however. Claiming earlyIncreasing the Social Security Early Entitlement have tended to discourage early retirement. Publicwould actually make more sense forAge by two years to 64 would encourage more workers to remain in full-time employment.30'