Does Socioeconomic Status Lead People to Retire Too Soon?


The brief’s key findings are:

  • The ability to stay on the job long enough for a secure retirement may vary by socioeconomic status (SES).
  • Using education for SES, the analysis calculates a retirement gap – the difference between how long households plan to work and how long they need to work.
  • Not surprisingly, retirement gaps are both more common and larger among households in the bottom education quartile compared to those in higher quartiles.
  • Even after controlling for demographic/financial characteristics and pre-retirement shocks, the bottom-quartile households still have much larger gaps.
  • Thus, premature retirement by low-SES households is a big problem.  However, relatively poor health and job prospects may make it harder for them to work longer.

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