Many people aspire to retire early or at least at normal retirement age, but there can be some drawbacks to leaving the workforce before age 67—and not just financial.
According to a new study, continuing to work longer in life is protective against cognitive decline, and those who postpone retirement boast stronger thinking skills than their retired counterparts.
The beneficial effect is related to a slowed rate of cognitive decline rather than a boost in cognitive function, according to the recent study by researchers from The Max Planck Society for the Advancement of Science in Germany, who analyzed data from the U.S. Health and Retirement Study on more than 20,000 Americans ages 55 to 75 who participated in the labor market at some point between 1996 and 2014.
“Participating in the labor market until the age of 67 slows cognitive decline and is protective against cognitive impairment, such as that caused by Alzheimer’s,” the researchers said in a July 29 statement. “This protective effect appears to hold regardless of gender and educational or occupational attainment.
The findings were recently published in the journal SSM Population Health.
Researchers note there are modifiable life-course predictors of cognitive function. With population aging there is a growing concern about increasing prevalence in Alzheimer’s disease. As there is no cure for Alzheimer’s, it is important to understand the influences on cognitive function over one’s life span, paying particular attention to modifiable risk factors.
More than six million Americans are living with Alzheimer’s, and Alzheimer’s and dementia deaths have increased 16% during the COVID-19 pandemic, according to the Alzheimer’s Association. One in three seniors dies with Alzheimer’s or another dementia, and it kills more than breast cancer and prostate cancer combined.
“In this study, we approach retirement and cognitive function from the perspective that they both come near the end of a long path of life,” said lead researcher Angelo Lorenti. It begins with one’s social origins in ethnicity, gender, and early-life social and economic status, goes on with educational and occupational attainment and health behaviors, and goes all the way up to more proximate factors such as partnership status and mental and physical health. All these kinds of factors accumulate and interact over a lifetime to affect both cognitive function and age at retirement.
Health consequences of postponing retirement
In many countries governments have enacted policies to increase the statutory retirement age. That is why it is relevant to understand if retiring at older ages may have health consequences, particularly on cognitive function.
“We investigated how demographic change interacts with social and labor market dynamics,” Lorenti added. “Our study suggests that there may be a fortuitous unintended consequence of postponed retirement.”
Rising retirement ages
In the U.S., full retirement age (FRA)—the age at which people are eligible to claim 100% of the benefit Social Security calculates from their lifetime earnings record—has already increased from 65 years old to 66 and 2 months and will rise incrementally over the next several years to age 67.
If you turn 62 in 2021, then your full retirement age is 66 and 10 months. Unless the law changes, anyone born in 1960 or later will not reach full retirement age until they are 67.
People who put off claiming Social Security until age 70 receive up to a 32% higher annual payout than if they started receiving benefits at full retirement.
The rise in FRA was mandated by Congress in 1983 as part of a law that strengthened Social Security’s finances. Congress cited improvements in the health of older people and increases in life expectancy as reasons for raising the retirement age.
Raising the age further is one of many possible reforms to Social Security that have come up for debate in Washington.
And don’t forget that the age for required minimum distributions (RMDs) from retirement accounts was raised by the 2019 SECURE Act from age 70½ to 72, and part of the proposed “SECURE 2.0” retirement legislation package seeks to up the RMD age to 75 by 2032.
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
