Who Takes Early Social Security Benefits: The Economic and Health Characteristics of Early Beneficiaries

This paper uses the first two waves of the Health and Retirement Survey to examine the economic well-being of individuals who first received social security benefits at age 62 in 1993. We analyze wealth and income measures both before and after the receipt of social security benefits. We compare the average economic well-being of those who took early benefits with those who do not and find that the averages are quite similar. However, there is great diversity within the groups. When we subdivide by health as well as by receipt of employer pension benefits we find that poor health is more closely related to economic well-being than early benefit receipt by persons age 62. Healthy postponers have the greatest economic well-being measured by either income or wealth. They are followed by healthy takers and then nonhealthy postponers. While nonhealthy takers are the worst off, they make up a very small share of the population that takes social security benefits at age 62. This suggests policies to increase the earliest social security retirement age are not likely to lead to dramatic increases in poverty at older ages.

Dataset(s): Health and Retirement Study: U.S., 1992 (first wave) and 1994 (second wave).