People are now living much longer relative to the time when the Social Security Act was signed into law. In addition, health issues such as chronic illness have now moved to the forefront of medical and social science research. The HRS is a cooperative effort by the University of Michigan and funded by the National Institute on Aging that has tracked approximately 27,000 people since 1992. David Weir, co-principal investigator (PI) of the study from the University of Michigan explained the rationale for the HRS. What was needed, he said, “was a different kind of data set that would allow us to understand the decisions, the choices, and the behaviors that people make in response to policy so that we could better understand aging and better understand how the population would be likely to respond…” The goal of the study is to follow people over time, enabling scientists to discover how decisions made by retirees and the soon-to-be-retired play out in the context of family, career, overall health, and socioeconomic condition. The study is a multidisciplinary effort among social scientists, medical experts, and public health professionals.

Weir estimated that based upon HRS data, there will be only two workers per retiree in the year 2030, when the entire baby boomer generation is retired. This will lead to severe strains on the Federal system of support for the elderly. He pointed out that even as this generation dies out, the problem will remain due to the resulting changes in the fiscal balances of several programs, such as Social Security and Medicare. These programs, according to Weir’s analysis, will respectively be at deficits of 6 percent and 12 percent of taxable payroll by 2080.

For this reason, the HRS is adding “early boomers” to its pool of respondents in 2004 – those who were born between 1948 and 1953.  They join earlier cohorts of 50 to 60 year olds and 70 to 90 year olds when first interviewed in 1992. The “Children of the Depression” were added in 1998 and the study will be joined by a group of “mid-boomer” respondents in 2010.

The Age of Retirement Increases, Perhaps Permanently

Robert Willis, a professor of economics at the University of Michigan and another co-PI of the HRS, discussed how this generation of baby boomers is reversing many past trends. For example, there has been a strong shift toward higher educational attainment – over 60 percent of the boomers have a college education.

One of the most noteworthy trends for the future of public policy, Willis suggested, is the tendency toward later retirement.  According to Willis, the downward shift in labor force participation by the elderly that had begun in 1950 had started to slow and reverse itself by 1985.  The HRS study shows that by age 69, eighty-two percent of people are retired from their main job, with significant spikes in retirement entry at ages 62 and 65. The HRS was unique in its analysis of expected retirement age and actual retirement age. Participants were asked what the probability is that they will be working past the age of 62. According to Willis, “researchers have found that, on average, these subjective expectations tend to be fairly accurate, and indeed, a number of researchers have found a strong relationship between measures of expected retirement and actual retirement using HRS data.”

According to the HRS results for people of all education levels, there is a marked increase in the contingent of those expecting to work past the age of 65. If the correlation between expected retirement age and actual retirement age is as strong as researchers observed, then it looks as if the upward trend in labor force participation may be here to stay for the foreseeable future.

Michael Hurd, the senior economist and director of the RAND Center for the Study of Aging, showed that single retirees lose their savings more rapidly than couples (who generally have significantly more wealth accumulated). The average household income is $20,000 by the age of 85. However, couples continue to accumulate wealth, while dissaving among singles accelerates to four percent a year at age 85.

Hurd also suggested that baby boomers will not be able to rely on their inheritance to carry them through retirement. He contends that the data demonstrate that parents’ bequests to the boomers are not nearly as high as the popular press has previously indicated. While the mean bequest amount is approximately $47,000, the median is drastically lower, at $7,700. This is indicative of a skewed wealth distribution. 

Family and Aging: Men Better Off Than Women

Linda Waite, from the University of Chicago and co-director of the Alfred P. Sloan Center on Parents, Children & Work and the Center on Aging in Chicago, discussed the importance of family for older Americans. She found that women, especially unmarried or divorced women, are particularly disadvantaged in their retirement years. In addition to the effects of quickly diminishing wealth that Hurd pointed out, older women are more likely to be poor and have failing health than their married cohorts.

Waite found that because of the disparity in average life expectancies for men and women, men are more likely to live with their wives until they die. In contrast, from the ages of 75-84, only 38 percent of women are still married and unwidowed. This situation is additionally magnified for older African American women. Another significant finding relates to older women’s perception of their own health. According to Waite, “older married women are much more likely to rate their health as very good or excellent…and unmarried women are much more likely than married women to rate their health as fair or poor.”

In addition, unmarried or divorced women find it difficult to receive Social Security benefits in their old age. As Waite explained, “Social Security was originally set up to provide support for widows and orphans, so women who are married and have never worked have access to Social Security as the wife of a covered worker…So spouses and widows of covered workers get more, and divorced women and never married women are especially disadvantaged.” The baby boomer generation’s situation is compounded by the fact that 30 percent of them are separated or divorced at the same age that only 18 percent of the “war babies” generation were.

Kenneth Langa, a professor of internal medicine at the University of Michigan, also underscored the need for family care in an aging population, especially in light of the fact that approximately 10 percent of adults aged 65 and over and 50 percent of those 85 and over suffers from dementia or Alzheimer’s disease. Langa pointed out that “with the large growth in the number of older individuals in the coming decades, the number of Alzheimer’s cases is expected to triple over the next 50 years from about 4.5 million cases today to about 13.2 million in 2050.” This, as someone in the audience noted, assumes no significant medical breakthroughs, such as a vaccine.

Patients with dementia may require over 40 hours per week of care and approximately $17,000 per year, on average, most of which is provided through the patient’s family, Langa said. Moreover, the disparities between women and men continue to be pronounced. Older disabled women are far more likely to have unmet care needs than men. According to Langa’s analysis, 28 percent of older disabled women are married versus 74 percent of men, and 45 percent of older disabled women were living alone in contrast to only 17 percent of men. The poverty rates for older disabled women are also far higher than those for men, with 24 percent living in the lowest wealth quartile in comparison to only 11 percent of men living in the same quartile. However, this care disparity between women and men persists even when the women are married.

Langa remained optimistic that the risk factors for dementia across socio-economic and demographic groups would be more discernable as the Aging, Demographics, and Memory Study (ADAMS) evolves until its 2005 completion. In addition, results from this study will show the distribution of dementia patients who are receiving new medications and their benefits as well as the effects of Medicare policy changes: “The HRS and ADAMS will allow researchers to examine trends in the substitution between publicly funded care, such as home care, and

nursing home care, and the informal care provided by families…”

An edited transcript of the session will be available in the near future. If you would like a copy, please write to cossa@cossa.org.