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The massive retirement Essay

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Updated: Dec 16th, 2019


The massive retirement and the increasing trend towards earlier retirement have been the most two striking worldwide phenomena. The average age for a person to retire is still declining despite the rising life expectancy (Bound, 2007).

For example, the average retirement age for men in US has declined from 68.5 to 62.6 in the last five decades; and the women age for retirement declined from 67.9 to 62.5 years. The average age retirement was 61 years in Canada and China 51.2 years by 2000 (Gendell, 2001).

Voluntary early retirement is granted to individuals only with the approval of the Office of Personnel Management (OPM); it is under the federal law and agencies. This option is provided by the OPM with the aim of assisting agencies to restructure their work force.

There are laid down requirements for one to qualify for voluntary early retirement. For example, for those employees covered under CSRS, one is required to be at least 50 years with 20 years of federal service, or at any age for those who have attained 25 years of federal service.

The increasing numbers of people retiring at earlier ages are making the health insurance and the social security systems to get worried. Research shows that US social security system is likely to pay out much money in benefits than it collects from payroll taxes by 2018.

In other countries such as China, the security system will not be sustainable unless the mandatory retirement age is increased. Whether the increase in early retirement is socially or individually beneficial, it has an impact on health outcomes (Boldrin, Dolado, Jimeno & Perrachi, 1999).

Reasons for Early Retirement

Researches carried out by various groups point out too much generosity by the social security as the major reason behind early retirement. Studies indicate that these generous benefits have resulted to intensive early retirements. They argue that the benefits and the contributions are high (Chong & Jung, 2009).

Technological progress is another cause identified for early retirement. The introduction of new goods, machines and production methods elude the need for human capital. Technological advances have made it possible for some human labor to be effectively replaced.

Employees who are replaced by technology are relocated to other tasks they may not like and thus they may end up retiring early. Other reasons identified by the researchers include fears by the employers that the elderly employees might develop reduced productivity through their decreased interest with their work and inability to advance their skills.

Others believe that poor relationship with co workers results to early retirement. More so, employees whose services are no longer required by the industry may opt for early retirement.

It has also been shown that those who have lower education backgrounds are more likely to ask for early retirement; researchers have argued that people with lower education backgrounds are reluctant to advance their skills through further learning and thus this lowers their productivity and make them less willing to work (Ahituv & Zeira, 2001).

Various reforms have been undertaken by the pension scheme to reduce the rate of early retirement. These include penalties awarded for every early retirement applied for and awarding of more credits to those who delay in retiring. Other reasons connected to early retirement are wages.

Studies indicate that, the less the salary one earns, the more the likelihood of that person retiring early. However, there is a contrasting effect for those who are partially employed. Existing research has also identified health as a cause for early retirement (Chong & Jung, 2009).

Benefits for Early Retirement

Early retirement is described to be beneficial for economic growth by various researches. Arguably, some of the studies show that it gives rooms for firms to organize their work force through the removal of the least productive employees from the work force by giving them early retirement and replacing them with productive workers.

Productivity is described as one of the major drivers for economic health. The retiring individuals can establish their own businesses from the benefits they get (Sala-I- Martin, 1996).

Early retirement is beneficial because it allows one a permanent leave from work. It is common to find some people regaining their health after retirement; this happens for the case where the working conditions are challenging. Some people become susceptible and weak hence the need for early retirement.

The second benefit of early retirement is the financial benefits an individual gains. In accordance to the old time saying, “time is money”, many young men opt for an early retirement so that they establish their own businesses. This puts them at a position to excel through their efforts and determination.

Early retirement can also be due to other reasons such the need to have ample time with loved ones. This is so especially for incidences where loved ones are sick and need more attention; for example, a spouse with chronic illness or those who are disabled and need special attention. Early retirement also places one at a position to start a new career that he/she might have been cherishing for a long time (Weltman, 2008).

Disadvantage of Early Retirement

Retirement has been shown to have adverse effects on people’s health. This is attributed to the sudden transformation in an individual’s lifestyle such as loss of career identity, lack of social attachment and loss of the sense of value for their role in the society.

While for some, job-related activities might have been the only forms of physical activity that they were active in. However, early retirement can be good for health. Supporting evidence includes the freedom one attains from work stress and thus leaving sufficient time for the individual to participate in other healthy activities (Chong & Jung, 2009).

Individuals’ early retirement means that their benefits are deducted by the social security. The deduction is done at a certain percent for each month before they attain the retirement age. This is done to encourage people to abide to the social security general rule, that is, social security benefits should total the same amount to an individual’s life time benefit. The benefits are paid in smaller amounts.

The major disadvantage is that individuals’ benefits are permanently reduced. This implies that the individuals will be required to manage their expenses well including all aspects of life such as housing expenses, family budget and credit card charges. This implies that they have to change their life styles abruptly (Bratberg et al., 2004).

Schneider (1998) described the current generation as workaholics. This implies that when work is taken away from them, they suffer physical and mental health. More so, many people have the perception of early retirement as a loss of work. This may imply the loss of their role as the bread winner of their families. This might make them suffer a condition referred to as “severe gender strain”.

This can affect most of the family to a point of ending strong marriages. Other effects include the downsizing and the discrimination from the society. This may lead to a reduction of social contacts. Others may not stand the degree of loneliness and isolation (Glicken, 2010).

Research by Zedlewski and Butrica showed that individuals who volunteered or had full-time work had improved health, reduced risk of developing chronic illness and emotional difficulties such as depression than those who retired early. Arguably, those who had earlier retirement had an increased probability of developing illness and developing psychological difficulties (Glicken, 2010).


Early retirement is viewed as a double edged sword. Individuals are encouraged to evaluate their way of living. Therefore, before reaching into a decision of getting an early retirement, it is important for one to think about his or her life without working, the effects on the relationship with other employers and how they intend to spend their free time and lastly, how they intend to live without regular income.

This paper concludes that early retirement is not a better option. More so, having something to do after the retirement benefits individuals and enhances their peace of mind, thus keeping them healthier by engaging them physically and emotionally to their surroundings.

Early retirement, therefore, ought to be given much consideration; all the benefits and losses likely to be incurred should be taken into consideration and if possible advice should be sought from experts in order to avoid committing a big mistake.


Ahituv, A., & Zeira, J. (2001). Technical progress and early recruitment. The Hebrew University of Jerusalem. Web.

Boldrin, M., Donlado, J., Jimeno, J., & Perrachi, F. (1999). The future of pension in Europe. Economic Policy, 29(1), 289-320.

Bound, J., & Waidmann, T. (2007). . Michigan Retirement research Center Research paper; University of Michigan. Web.

Bratberg et al. (2004). Assessing the effects of an early retirement program. Journal of population Economics, 1(1), 1.

Chong, B., & Jung, J. (2009). The cause of early retirement: social security generosity or population aging. Conference 2009 (June 28, 2009). Web.

Gendell, M. (2001). Retirement age declines again in 1990s. Monthly Labor Review, 12(1), 21.

Glicken, M. (2010). Retirement for workaholics: life after work in a downsized economy. New York, NY: ABC-Clio.

Weltman, B. (2008). Guide for tough times: tax and financial solutions to see through. New Jersey, NJ: John Wiley and Sons.

Sala-I- Martin, X. (1996). A positive theory of social security. Journal of Economic Growth, 1(1), 277-304.

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