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Intergenerational Financial Support and Low-income Older Adults’ Retirement Decisions

Year: 2018
Type: article
Abstract: Many low-income older adults who want to retire when they receive Medicaid/Medicare coverage often delay retirement due to low levels of life-time savings. Ties between older parents and adult children may provide an important source of financial support for low-income families. Therefore, the effects of Medicaid/Medicare on low-income older adults’ retirement decisions should be evaluated in an intergenerational framework to consider the connection between public government and private family safety nets upon which individuals and families rely. Using data collected from 58,833 older adults as part of the 2002−2014 Health and Retirement Study (HRS), we investigate whether financial support exchanges between older parents and adult children help or hinder older parents to bridge the gap between retirement needs and available resources to fulfil retirement plans. We address two research questions: 1) What is the impact of older adults’ receipt of financial support from their adult children on low-income parents’ retirement decisions in the context of Medicaid/Medicare coverage? and 2) What is the impact of low-income older adults’ provision of financial support to adult children on older parents’ retirement decisions in the context of Medicaid/Medicare coverage? The estimation results of panel regression with individual fixed-effects indicated that receipt of financial support from adult children moderated the association between Medicaid/Medicare and retirement plans. In contrast, older parents’ provision of financial support to adult children did not moderate this association. These findings indicate that the receipt of financial support from adult children may be an especially important income source for low-income older adults.
DOI: 10.1093/geroni/igy023.617
Language: English
Subfield: Demography
Open Access status: gold
Estimated APC paid: $3,977
OpenAlex ID: W2900171032
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