The Changing Causes and Consequences of Not Working Before Age 62

Barbara A. Butrica Nadia S. Karamcheva

WP#2012-3

Abstract

This study uses the Health and Retirement Study to deepen our understanding of the characteristics of nonworking adults ages 51 to 61 and how they support themselves before qualifying for Social Security benefits.

The results show that nonworking adults ages 51 to 61 are a heterogeneous group. A large share is poor, with low incomes and limited wealth. But a sizeable share has low incomes and abundant wealth. These individuals are income poor but asset rich. More than for singles, this phenomenon characterizes nonworking married adults. In general, we find that nonworking married adults are significantly better off than their unmarried counterparts. Many nonworking married adults have working spouses. On average, married adults without earnings have twice the per person income and more than ten times the per person assets of single adults without earnings. Additionally, married adults without earnings are 20-30 percentage points less likely to be poor than single adults without earnings…