This suggests that some respondents report expected retirement ages based on health status without considering economic ability to retire. This says something about preferences for retirement as well as the reliability of expectations of retirement as proxies. In that early study, sample sizes were small among those reaching their expected retirement ages by wave 2. We will follow respondents over time using the first four waves of the HRS and re-examine the role of health and economic factors on the realizations of retirement plans. Using a nested multinomial logit model we can model retirement conditional on plans.
Retirement plans can change for two reasons.
It could be due to changes in some of the important factors determining retirement. Or it could be that full information was not utilized in planning for retirement. We pay particular attention to the impact of health shocks on retirement plans. However, health shocks can also postpone retirement if the demand for health care services increases, particularly if health insurance is tied to work. In this sense we incorporate some dynamics into the model by looking at changes in health over time and their impact on meeting retirement expectations.