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Updated 10:00 AM August 14, 2006




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Early retirement: Is it better to spend it at work or at play?

More than one out of every five Americans age 62 and older who expected to retire early is still working, according to a new analysis of the prevalence of unanticipated work in retirement and its consequences for the well-being of older adults.

The analysis, conducted by U-M sociologist Philippa Clarke, was to be presented Aug.13, in Montreal, at the annual meeting of the American Sociological Association.

Clarke, a researcher at the Institute for Social Research (ISR), analyzed longitudinal data from the ISR Health and Retirement Study, funded by the National Institute on Aging, to examine how unfulfilled expectations about early retirement affect life satisfaction.

In all, almost 30 percent of respondents older than 62 still were working for pay, she found. While Clarke emphasized that the analyses were preliminary, she identified three distinct patterns among those who still were working:

• About 37 percent of people, mainly older men, had expected to take early retirement. If they ended up working beyond age 62, their life satisfaction was lower than that of retired peers with similar recent labor force activities, health, and socioeconomic and demographic factors;

• About 59 percent of people, mainly older women, generally had expected to be working after age 62. Their life satisfaction also was lower than peers who had stopped working;

• "The one group that seemed to benefit from later life work were younger and less educated respondents who tended to be ambivalent about the probability of retiring early," notes Clarke. This group comprised only about four percent of the sample. Their life satisfaction was much higher if they stayed at work past age 62.

For the study, Clarke and colleagues analyzed panel data from a representative sample of 1,044 Americans ages 51-61 in 1992, and who were interviewed every two years through 2004.

To assess life-satisfaction, respondents were asked to what extent they agreed with the following statements: "In most ways my life is close to ideal;" "The conditions of my life are excellent;" "I am satisfied with my life;" "So far, I have gotten the important things I want in life" and "If I could live my life again, I would change almost nothing."

"Older workers approaching retirement have faced notable and dramatic changes in the structure of state and corporate pension plans and benefits," Clarke says. With recent and future changes in Medicare and Social Security older workers who long have expected to retire early are being forced to reverse their decisions and work longer than they expected, she says.

"Although these analyses are preliminary, the patterns are quite clear that the move towards a so-called "ownership society" in the U.S. has consequences for the well-being of older workers who may have been operating under a different set of assumptions when planning for their retirement."

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