Early Retirement is Good for you and the Government Budget too!

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work-retireRaising retirement age can cause unpredictable damages to healthcare systems; damages greater than the problems threatening state pension if the minimum age remains lower. Aspen Gorry, professor of Utah State University elaborates on this topic.
His team recently published a study which gained world-wide recognition saying that people retiring at the age of 60-63 still remain healthy for many years because (in America) they tend to live a happier and more satisfied than ever before: they rarely go to see the doctor and their pharmaceutical consumption is relatively low. However, the situation is the complete opposite among those who retire between the age of 67 and 70. The results of the study – with certain limits – could be relevant in the current public and political debates on retirement age.

Péter Zentai: Nowadays, people in their 70s are in just as good shape as people used to be in their 50s and 60s…  The results of your study are indeed surprising; they are the opposite of the public opinion and political goals that raising retirement age is appropriate.
Aspen Gorry: Our results do not contradict your experiences. We only proved that people are more likely to – in your words – remain in good shape, stay in good health for more years if they retire at the age of 60-63, than if they did it later. Being happier and more satisfied all contributes to this: those who retire earlier can better enjoy life and spend their time in more productive ways in terms of their health and environment.

Are we talking about America only? The results of such study would change significantly by the fact that in other places pension is considerably lower…
The database we used in our study was based on official American statistical data, and it surveyed the state of mind of American retirees only, indeed. The analysis was based on a questionnaire about how satisfied they were with their life, and whether they were feeling well. Currently, we are analysing the data collected from Great Britain. According to the preliminary results, the final conclusion will be rather similar to the study based on the American sample. There are only slight differences between developed countries.
However, our findings regarding the healthcare services could be quite informative to less developed European countries.  America is especially valuable in terms of conducting such researches because the scope of those retiring between the age of 60 and 63 is just as broad as those who do between 67 and 70 or later.
Of course, I would like to emphasise, this study focuses on basically healthy people in the 60-70 age range. Those who had to retire earlier due to serious medical conditions or incapacity were excluded from the study. The members of the studied sample and/or their employers always paid social security contribution, gaining pension rights.

The number of late retirees has increased worldwide: the minimum age has been raised almost everywhere and many people love their jobs; some even get sick if they have to retire. This is why I am surprised by the result of your study.
I know I would keep on doing scientific research after retiring. Not for the money, but because this is my passion. Many people think alike, however, the majority welcomes retirement: they like the idea that only they and nobody else is in charge of their time; that they can set on their own priorities. The lack of everyday labour is absolutely beneficial and raises their spirit. However, as our study shows, in the years of retirement, people tend to start living for previously neglected passions. They start spending more time with the family, on culture, art, and travelling.  Physically they are more active than they were during their working years.

This can be done even after the age of 67 too…
No, not really. You are wrong, and so is every political and financial decision maker who thinks the way you do.
Our study is the first which scientifically proves that retiring earlier, at the age of 60-63, has the benefits almost from the very moment of retiring; their spirit improves and they become happier in general – and this state stable too! Mainly because people now can live healthier than before: more sports, more travelling and freedom. According to our results, retiring at the age of 67 or later has different effects: people tend to become more exhausted both physically and mentally 2-3-4 years before their retirement. Then, in their retirement, they are more likely to require medical treatment, medicine and visit the doctor’s office more often than those the same age who retired at earlier.

Essentially, the study says the minimum retirement age should not be raised. However, this is inevitable – at least in Europe – since the working-age population paying pension-contribution has been decreasing significantly, and the social security system is on the verge of collapse…
It is the same here; in the United States – even though the situation is certainly less severe than in Western Europe or Japan – according to predictions, it is possible that the social security coffer will have been emptied by the year 2034. However, in the other hand, there are problems with the healthcare system too, that are just as severe as in Europe or Japan.
The collateral of this latter system will be gone sooner – according to every professional forecast – than that of the state pension fund.
So everything we have discussed now is absolutely significant additional information for government decision makers, politicians, and budget planners.
Even if it has not been broken down to exact dollars yet, this is the first time that scientific results support that the raised retirement age can quickly cause significant damage to the healthcare system. Presumably, this damage is more substantial than what keeping retirement age low would cause to state pension fund.

Original date of Hungarian publication: October 1, 2015