Most people look forward to retirement, and for good reason, according to a pair of researchers in Clemson University’s College of Business.

Devon Gorry, research, economics, retirement

Devon Gorry
Image Credit: Clemson University Relations

Research by Devon and Aspen Gorry, assistant professors of economics in the John E. Walker Department of Economics, found strong evidence that retirees experience immediate and long-lasting happiness when their working years come to an end. Retirement also has a positive impact on health, according to the husband and wife research team, but the effects aren’t immediate and may not be experienced for four or more years after retirement.

“The research looked at the short and long term and found that even years later, people report being happier in retirement than they were before,” Devon Gorry said. “Yes, individuals may vary, but overall we found strong evidence that retirees, on average, find immediate happiness that is lasting.”

Research data was tapped from the Health and Retirement Study (HRS), sponsored by the National Institute on Aging and the Social Security Administration. HRS is a large data set compiled by surveys every other year from Americans over the age of 50 on a variety of topics related to their lives. Data used in the retirement research, conducted by the Gorrys and Sita Slavov, a professor of public policy at George Mason University, sampled more than 10,000 people who had retired and reported working for the last 20 years.

Aspen Gorry said the Health and Retirement Study data is obtained from surveys that ask a variety of questions about retirees’ former employment, earnings, assets, health conditions and more. “For instance, respondents are asked to agree or disagree, on a scale of one to seven, about their physical and mental health conditions, or whether their lives are close to ideal, and if they could live life over, would they change absolutely nothing.”

Aspen Gorry, economics, research, retirement

Aspen Gorry
Image Credit: Clemson University Relations

Because factors such as Social Security and Medicare eligibility often drive retirement decisions, the study involved predominantly people retiring in the ranges of 62 and 65 years of age.

“Unlike happiness, improvements in health are realized over time. Because health typically changes slowly over time, the improvements aren’t noticed sometimes until four years after retirement, Aspen Gorry said. “A number of mechanisms could trigger the health improvements over time. For example, people may exercise more, or they’re sitting less and another could be the absence of stress that came from their workplace.”

Devon Gorry said the study’s findings, soon to be published in Health Economics and currently a working paper with the National Bureau of Economic Research, should be of interest to anyone making a retirement decision, and to Washington policymakers considering raising the age for Social Security eligibility.

“Knowing that overall, most people report being happier and healthier in retirement is one piece of information someone can use in making the decision,” she said. “And for lawmakers looking at increasing the age for Social Security eligibility, they need to look at the unanticipated effects it might have.”

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