%0 Report %D 2013 %T How Important Is Medicare Eligibility in the Timing of Retirement? %A Norma B Coe %A Khan, Mashfiqur R. %A Matthew S. Rutledge %K Medicare/Medicaid/Health Insurance %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Eligibility for Medicare at age 65 is widely viewed as an important factor in retirement decisions. However, it has been difficult to quantify the influence of Medicare because eligibility for Medicare came at the same age as Social Security s Full Retirement Age (FRA). The recent rise in the FRA, along with other changes, has decoupled the age-related incentives in the two programs, making it easier to estimate the effect of Medicare eligibility on the timing of retirement. This brief, based on a recent study, provides such estimates of the importance of Medicare on retirement decisions. %I Boston, Center for Retirement Research at Boston College %G eng %4 Medicare/retirement planning/social Security/Public Policy %$ 69314 %0 Report %D 2013 %T Sticky Ages: Why is Age 65 Still a Retirement Peak? %A Norma B Coe %A Khan, Mashfiqur R. %A Matthew S. Rutledge %X When Social Security’s Full Retirement Age (FRA) increased to age 66 for recent retirees, the peak retirement age increased with it. However, a large share of people continue to claim their Social Security benefits at age 65. This paper explores two potential explanations for the “stickiness” of age 65 as a claiming age: Medicare eligibility and workers’ lack of knowledge about their future Social Security benefits. First, we analyze the impact of Medicare eligibility by comparing two groups – one has an FRA of exactly 65; the other, between age 65 and 2 months and age 66. We find that the group with later FRAs who do not have access to retiree health benefits through their employer are more likely to claim Social Security at age 65. We interpret this finding as evidence that Medicare eligibility persuades more people to retire, because they can begin receiving federal health coverage. Individuals without access to retiree health insurance at work are 7.5 percentage points more likely to retire soon after their 65th birthdays and are 5.8 percentage points less likely to delay retirement until the FRA than those with that insurance. This result fits into extensive research showing that access to health insurance is an important component of the retirement decision. On the question of whether misinformation about Social Security benefits may drive individuals to claim at age 65, we find that some individuals are unable to accurately forecast their retirement benefits. However, our analysis suggests that there is no relationship between this confusion and the age 65 peak for claiming Social Security. %B Center for Retirement Research at Boston College Working Paper Series %I Center for Retirement Research at Boston College %C Boston, MA %G eng %U http://crr.bc.edu/working-papers/sticky-ages-why-is-age-65-still-a-retirement-peak/ %0 Report %D 2012 %T Great Recession-Induced Early Claimers: Who Are They? How Much Do They Lose? %A Norma B Coe %A Matthew S. Rutledge %K Recession %K Social Security %X During the Great Recession, more older workers have claimed Social Security benefits early. This paper addresses two important policy questions: Who are these early claimers? How much retirement income have they lost as a result of claiming early? Using the Health and Retirement Study (HRS) we estimate a discrete-time hazard model that makes claiming Social Security benefits a function of age, personal characteristics, and the national unemployment rate. We project that high unemployment rates during the Great Recession led to a 5-percentage-point increase in the probability of claiming early relative to a less severe recession such as the 2001-2003 downturn, and this increase was nearly uniform across socioeconomic groups. Our estimates also suggest that while the Great Recession did impact the claiming decision, it did not cause a dramatic change in benefits. “Great Recession Claimers” – those whom we simulate were likely to claim early during the Great Recession but would not have in a milder downturn – filed for Social Security only 6 months earlier, on average, than they would have in a minor recession. This modest change in timing reduced their monthly Social Security benefit checks by $56, or 4.6 percent of average monthly benefits, and the Social Security replacement rate fell by 1.7 percentage points relative to a more typical recession. The benefit reduction resulted from the combined effect of the actuarial reduction for early claiming and the foregone opportunity to continue working and increase the wage base used for calculating benefits. %B Center for Retirement Research at Boston College Working Papers %I Center for Retirement Research at Boston College %C Boston, MA %G eng %U https://crr.bc.edu/working-papers/great-recession-induced-early-claimers-who-are-they-how-much-do-they-lose/