The Financial Vulnerability of Former Disability Beneficiaries in Retirement

By their early 60s, one in four workers has experienced the onset of a work-limiting health
condition (Johnson et al. 2007), and nearly four in five adults in this age group have experienced
the onset of a chronic health condition (Smith 2003). Older workers who develop significant
medical conditions or impairments face declines in earnings, income, and consumption and an
increase in poverty (Schimmel and Stapleton 2012; Meyer and Mok 2014). In addition to these
effects, leaving the labor force during peak earning years may have a lasting impact on financial
security after retirement. In this brief, we consider the post-retirement financial well-being of
workers based on whether they received Social Security Disability Insurance (DI). We compare
their experiences to other workers who did not receive DI but claimed Old Age and Survivors’
Insurance (OASI) program.