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Why Do Boomers Plan to Work Longer?

¹ Urban Institute, Income and Benefits Policy Center, Washington, DC.
² Department of Economics and School of Public Policy, University of Michigan, Ann Arbor, Michigan.

Address correspondence to Gordon B. T. Mermin, Income and Benefits Policy Center, Urban Institute, 2100 M Street NW, Washington, DC 20037. E-mail: gmermin{at}ui.urban.org

Objectives. Recent changes in retirement trends and patterns have raised questions about the likely retirement behavior of baby boomers, the large cohort born between 1946 and 1964. This study examined recent changes in retirement expectations and the factors that drove them.

Methods. Using data from the Health and Retirement Study, the analysis compared self-reported probabilities of working full time past ages 62 and 65 among workers aged 51 to 56 in 1992 and 2004. The study modeled retirement expectations for both generations and used the estimated regression coefficients to identify the forces that accounted for generational differences.

Results. Between 1992 and 2004, the mean self-reported probability of working full time past age 65 among workers aged 51 to 56 increased from 27% to 33%. Lower rates of retiree health insurance offers from employers, higher levels of educational attainment, and lower rates of defined benefit pension coverage accounted for most of the growth.

Discussion. Given the continued erosion in employer-sponsored retiree health benefits and defined benefit pension plans, boomers will likely remain at work longer than members of the previous generation. Lengthier careers will likely promote economic growth, increase government revenue, and improve individual financial security at older ages.