Source: Fortune.com
Summary
Research suggests that Gen X workers who retire early, often before the age of 65, face not only financial risks but also cognitive decline. A study by the National Bureau of Economic Research found that leaving employment led to cognitive decline among Americans aged 51-75, while consistent employment caused greater sustained cognition. The study’s coauthor, David Neumark, emphasizes the need to keep Gen X in the workforce to mitigate the negative economic consequences of early retirement. Cognitive decline can be expensive, with estimated costs to the US economy of $781 billion in 2025.
Our Reading
The numbers tell one story. Gen X workers are retiring early, with about 35% of workers over 55 unemployed for more than 24 weeks. The retirement age for men has gotten younger, with half of retirees choosing to stop working. But new research suggests that early retirement comes with a steep cognitive price.
The strategy enters a familiar phase. Companies and policymakers are faced with the challenge of keeping older workers in the workforce longer. Accommodating flexible hours or phased retirement programs could be a solution. Awareness of the downsides of staying out of a job, including increased likelihood of cognitive decline, could be a motivating factor for individuals weighing early retirement.
David Neumark’s urgency is clear: “We should really think about the potential consequences of a really large-scale decline in employment.”
The announcement sounds familiar. Economic consequences of early retirement may begin with how an aging population could weigh on social benefits.
One original observation: Early retirement is not just a personal choice, but also a public health issue.
Author: Evan Null
