How Important Is Medicare Eligibility in the Timing of Retirement?

Norma B. CoeMashfiqur R. Khan Matthew S. Rutledge

IB#13-7

The brief’s key findings are:

  • Although Social Security’s “Full Retirement Age” has moved to 66, 65 remains a popular age to withdraw from the labor force.
  • One reason might be the availability of Medicare at 65, particularly for workers who have employer coverage while working but not after they retire.
  • The analysis, which relates retirement patterns to health coverage, suggests that Medicare explains about 30 percent of the continued spike in age-65 retirements.
  • And, as anticipated, those who would lose employer coverage if they retired before 65 appear to be the most affected by Medicare eligibility.