Early retirement and the financial assets of individuals with back problems

Abstract

This paper quantifies the relationship between early retirement due to back problems and wealth, and contributes to a more complete picture of the full costs associated with back problems. The output data set of the microsimulation model Health&WealthMOD was analysed. Health&WealthMOD was specifically designed to measure the economic impacts of ill health on Australian workers aged 45-64 years. People aged 45-64 years who are out of the labour force due to back problems have significantly less chance of having any accumulated wealth. While almost all individuals who are in full-time employment with no chronic health condition have some wealth accumulated, a significantly smaller proportion (89%) of those who have retired early due to back problems do. Of those who have retired early due to back problems who do have some wealth, on average the total value of this wealth is 87% less (95% CI: -90 to -84%) than the total value of wealth accumulated by those who have remained in full-time employment with no health condition controlling for age, sex and education. The financial burden placed on those retiring early due to back problems is likely to cause financial stress in the future, as not only have retired individuals lost an income stream from paid employment, but they also have little or no wealth to draw upon. Preventing early retirement due to back problems will increase the time individuals will have to amass savings to finance their retirement and to protect against financial shocks.

Domains of Chronic Low Back Pain and Assessing Treatment Effectiveness: A Clinical Perspective

“…Accommodating work‐related outcomes may be important at both an individual and economic level, since the majority of the costs of LBP come from indirect sources, such as work absenteeism and early retirement . Previous work absenteeism due to LBP has been linked to a 31% less chance of functional recovery in those with CLBP, which may be associated with early retirement from low back issues . Early retirement due to LBP may lead to lower net wealth than counterparts who do not retire early, causing greater financial stress later in life .…”

“…92 Early retirement due to LBP may lead to lower net wealth than counterparts who do not retire early, causing greater financial stress later in life. 92 Reducing work absenteeism may be an important outcome measure to maximize functional work limitations and reduce the financial stress of individuals who become work disabled.…”

Labor Force Participation and the Influence of Having Back Problems on Income Poverty in Australia

“…19 They also have very little accumulated wealth (such as their own home, savings, shares, superannuation, and investment properties) to fall back on-around Aus $130,000 which includes the value of the home they live in (if they are homeowners). 17 Many families may use accumulated wealth, by selling properties and cashing in superannuation, to fi nance everyday expenses in the absence of a stable and suffi cient income. 46 Individuals who are out of the labor force due to chronic back problems may have neither a viable income stream nor a large stock of wealth, leaving them reliant upon government support payments.…”

Multiple Chronic Health Conditions and Their Link with Labour Force Participation and Economic Status

“…The model contains detailed information, at the individual level, of health (including the type of conditions and number of conditions), labour force participation, and economic status. It has been successfully used in the past to document the economic impacts of various individual health conditions[16–23]. Health&WealthMOD was built upon individual record data from the 2003 Survey of Disability, Ageing and Carers (SDAC), a nationally representative survey of health and disability conducted by the Australian Bureau of Statistics[24], and STINMOD, a microsimulation model of income tax and government support payments[25,26], which is maintained and developed for the Australian Government by the National Centre for Social and Economic Modelling, University of Canberra.…”