The Hidden Risk of Retirement: The Impact of Retirement on Mental Health

Abstract

Early retirement is a popular goal for many Americans but little research has been conducted to investigate the impact of this decision. This paper estimates the effects of retirement on several mental health outcomes using an ordered-probit model. Results suggest that retirement is negatively related to mental health in four of the tested categories: cognitive skills, mental status, memory, and Alzheimer’s symptoms. This implies that early retirement may have hidden costs and that working longer may help to preserve mental health.