When to retire is probably the most important – and vexing – decision a worker can make. Myriad factors play into that choice, including health status, financial situation and the availability of health insurance when one does retire. That last factor has taken on more importance ever since full retirement age for Social Security benefits was ratcheted up to 66 from 65, while eligibility for Medicare has held at 65. Until 2003, the eligible age for both programs was 65.
Recently, researchers at the Center for Retirement Research at Boston College studied the impact of Medicare eligibility on when a worker decides to leave the workforce. The paper, "How Important is Medicare Eligibility in the Timing of Retirement?" was authored by Norma B. Coe, Mashfiqur R. Khan and Matthew S. Rutledge.
For those employees nearing retirement at age 64 who qualify for health benefits after they retire – which make up about 44 percent of all workers – Medicare eligibility is unlikely to influence their retirement decision, the researchers asserted. Yet for the remaining 56 percent without retiree health insurance (RHI), Medicare is potentially their only option for health care benefits, rendering the mismatch between Social Security and Medicare eligibility an even more compelling consideration.
Many take route 66
With the age for full Social Security benefits pushed up to 66, the Center for Retirement Research analysts charted a corresponding spike in retirement at that age. That shouldn't come as a tremendous surprise; age 66 remains the standard "reference" retirement age and the traditional retirement age at many employers.