How is Economic Hardship Avoided by Those Retiring Before the Social Security Entitlement Age?

Kevin S. Milligan

NBER Working Paper No. 18051
Issued in May 2012
NBER Program(s):   AG

Governments around the world are reacting to extended lifespans and troubled pension finances by increasing the age of retirement benefit entitlement. One concern that arises is how those who are not working before reaching entitlement age are able to bridge their consumption to the age of entitlement. This paper studies those who retire before the age of full pension entitlement in the United States using data drawn from the Health and Retirement Study. The major finding is that four out of five people who have zero earnings at pre-entitlement ages are able to find a way to lift their incomes over the poverty line. For men, pension and annuity income is important while for women, spousal income helps most to get them over the line. Reaching the early retirement entitlement age at 62 also has a significant impact on poverty avoidance.

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A non-technical summary of this paper is available in the 2012 number 2 issue of the NBER Bulletin on Aging and Health. You can sign up to receive the NBER Bulletin on Aging and Health by email.

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Document Object Identifier (DOI): 10.3386/w18051

"How is hardship avoided by those retiring before the Social Security entitlement age?" Journal of Pension Economics and Finance, forthcoming. citation courtesy of

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