Research: Rising Health Care Costs Linked to Delayed Retirement

The Urban Institute's Retirement Policy Program has published a research article showing that older workers who expect high health care costs for themselves or their spouses after age 65 retire about later than those who expect low costs--13 months later if the worker is a man, 12 months later if a woman.

As Richard W. Johnson, Rudolph G. Penner, Desmond Toohey, the authors of "Rising Health Care Costs Lead Workers to Delay Retirement" point out, for those receiving health insurance from their employers, continued work reduces the risk of high out-of-pocket health care costs and increases retirement incomes--by raising earnings, boosting Social Security and employer sponsored pension wealth, improving the ability to save, and reducing the years over which retirement wealth must be spread--and therefore makes health care costs more affordable.

Source: Urban Institute Publication Release (May 18, 2008)