Retirement & Financial Planning Report

Severe health shocks can cut short working careers with long-term consequences on financial security, according to a study by the Urban Institute.

It said that “each year, on average, 4.2 percent of workers ages 18 to 62 report a new work-limiting health condition or a new major health shock, including heart or lung issues, stroke, cancer, memory loss, or psychiatric problems.”

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It said that two years after such an event, workers were three times more likely to leave the labor force as others, and that even after six years, they were “22 percentage points more likely to leave the labor force and 24 percentage points less likely to work full time.”

“These findings show that further government investment in programs to help intervene soon after a worker has a new serious illness or injury may be effective and beneficial for those who leave the labor force and do not receive public assistance. These efforts to encourage work participation among injured workers should be complemented with a strengthened safety net for those whose condition prevents them from engaging in substantial gainful employment,” it said.

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