Study: Half of Those 51-54 Will Lose Jobs Involuntarily

Chris Gaetano
Published Date:
Jan 8, 2019

While there is much discourse surrounding when someone should retire, a recent study by the Urban Institute has found that, often, it's really not up to employees, but rather to their employers, who force the issue. 

"Our results show that slightly more than one-half of adults in their early 50s who are working full time, full year with a long-term employer subsequently experienced an employer-related involuntary job separation," said the report. 

The report used data from the Health and Retirement Study, a longitudinal study of older Americans, to derive a sample of of 2,086 respondents aged 51-54. It defined "employer-related involuntary job separations" as actions akin to layoffs and business closings, departures driven by job dissatisfaction over poor or dangerous work conditions or work hours, and unexpected retirements. A retirement is considered unexpected if the worker reports leaving a job to retire but, in previous studies, had indicated a desire to continue working for at least two years after the observed retirement. It excluded any separations due to poor health, caregiving responsibilities and other personal matters. 

Among the respondents, 56 percent of men and 57 percent of women experienced an employer-related involuntary job separation that had serious financial consequences. Only 10 percent of these involuntarily separated workers ever earned as much as they did afterwards. Median household income among these people fell by 42 percent following the incident. This was found to have long-term effects, as median household income at age 65 was 14 percent lower for workers who experienced an involuntary separation than for those who did not. 

When it comes to forced retirement specifically, the study found a steady rise over the years. The report said that the total share of new retirees reporting that they were forced to retire either fully or partially grew from 33 percent in 1998 to 55 percent in 2014. 

"These disruptions can have long-lasting economic consequences,"  said the report. "Working longer generally improves future retirement security; it allows people to earn more and save more, raises future Social Security retirement benefits, and reduces the time that retirement savings must last. ... By contrast, older adults who lose their jobs in the run-up to retirement must often tap their retirement savings earlier than expected and collect early Social Security retirement benefits that permanently reduce their monthly payments."

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