Social Security Bulletin, Vol. 63, No. 4
Policies that would reduce or eliminate Social Security benefits for early retirees could have adverse consequences for older workers in poor health. This article documents the health and financial circumstances of beneficiaries aged 62–64. It examines the extent to which poor health limits work among early retirees and assesses the extent to which curtailment of early retirement benefits might lead to increases in the Disability Insurance program rolls.
This article considers two hypothetical scenarios—one in which the Medicare eligibility age is raised to 67 along with the scheduled increase in the normal retirement age, and one in which eligibility for both programs is raised to age 70. It then projects the effects that each of those changes would have on Social Security Disability Insurance participation, Medicare participation, and Medicare expenditures.
Older workers who receive short-term disability benefits to compensate them for medical conditions that limit their ability to work are three times more likely than younger workers to progress to permanent public disability benefits. This article documents the base rates of progression from short-term private to long-term private to permanent public disability benefits among older workers with various medical conditions.
The number of companies offering health benefits to early retirees is declining, although reductions in the percentage of early retirees covered by health insurance have been only slight to date. In general, workers who will be covered by health insurance are more likely than other workers to retire before the age of 65, when they become eligible for Medicare. What effect that will have on claims under the Disability Insurance program is not yet clear.
How much an employer pays for employee benefits varies widely and depends on the age of the workforce and the structure of the benefits package offered. In general, costs increase for older workforces. The factors driving the differences in cost by age are the time value of money, employee pay, and rates of health care use, disability, and death. Case studies show how the benefit package varies by age in a large traditional company, a large financial services company, and a medium-sized retail company. An illustration is also provided for retirement benefits from two sample plans to show how the benefits are earned over time.
This study examines retirement outcomes in the first four waves of the 1992–1998 Health and Retirement Study (HRS). The article compares outcomes under alternative definitions of retirement, describes differences in outcomes among demographic groups, compares retirement dynamics based on self-reported retirement status, and compares retirement flows in the 1990s and the 1970s and between cohorts of the HRS. Among other findings, measured retirement is seen to differ, sometimes substantially, with the definition of retirement used among the various groups analyzed.
Policymakers have long been interested in understanding the adequacy and distribution of Social Security benefits and in predicting the effects of reform on representative workers. This article describes two new methods for estimating the career profile of earnings for representative workers. It then compares the results of those new methods with earnings profiles assumed in traditional distributional analysis of Social Security and shows the implications of the new results for evaluating Social Security reform.
The March 2000 pension reform in Japan focused on the long-term financial sustainability of the country's two-tiered public pension system. This article describes the prereform system, the reform process, the key changes stipulated by the reform, and the projected impact of the reform on future pension costs.