While economists sound alarms about Gen Z unemployment, new research points to a quieter crisis: Gen X workers retiring years before 65—and paying a steep cognitive price for it.
About 35% of workers who have been unemployed for more than 24 weeks are over the age of 55, according to an April 2025 analysis. Over the last 35 years, the retirement age for men in particular has gotten younger, with about half of retirees saying they made the choice to stop working.
For these workers, the financial risks are ample: Few retirees have a pension outside of Social Security, and with Social Security’s average benefit at about $18,000 per year, many will take the benefit before its peak, receiving far less money retiring at 62 than at 70.
But new research suggests it’s not just money early retirees need to worry about, it’s also their health. A working paper published by the National Bureau of Economic Research found that among Americans ages 51 to 75, leaving employment led to cognitive decline, while consistent employment caused greater sustained cognition.
Though research has previously shown a correlation between early retirement and cognitive decline, University of California at Irvine economists sought to prove a causational relationship between the two. The researchers used data from 40,000 participants from the University of Michigan’s Health and Retirement Study (HRS), a longitudinal study that measures, among other variables, cognitive ability over time. They overlaid that data with County Business Patterns data generated by the U.S. Census to look at changes in cognitions following large labor demand shocks, finding “substantial declines” in cognitive scores following periods of meaningful negative employment shifts.
The results of the study are clear to David Neumark, a UC Irvine professor of economics and study coauthor: There’s an urgent reason to keep Gen X in the workforce.
“This would be yet another reason to say, ‘We should really think about the potential consequences of a really large-scale decline in employment,’” Neumark told Fortune. “That’s probably the group for whom this might be more serious.”
The negative economic consequences of early retirement may begin with how an aging population could weigh on social benefits.
“Cognitive decline is really expensive,” Neumark said.
Alzheimer’s disease and other dementias, which often begin with cognitive decline, cost the U.S. economy an estimated $781 billion in 2025, according to an analysis from the University of Southern California. In addition to care costs, that sum includes money from lost earnings from patients and caretakers unable to work. Even the narrower projection from the Alzheimer’s Association sees direct health and long-term-care costs alone hitting $384 billion to $409 billion in 2025–2026, with an additional $413.5 billion in unpaid caregiving paid out in 2025 on top of that.
Treatment is often prolonged, Neumark explained, because cognitive decline is a condition individuals may live with for years, and not one they die from.
Those costs may be on top of an aging population no longer working. A 2016 study predicted annual GDP growth would slow by 1.2% between 2016 and 2026 as a result of a graying population. However, though about one-third of this slowdown was a result of fewer older people in the workforce creating less output, most of the impact of an aging population on GDP was a result of older workers being less productive.
Still, Neumark said, there’s more that can be done to make sure older workers stay in the workforce longer. For example, about 28% of Social Security Disability Insurance (SSDI) recipients attempt to return to work within 10 years of receiving benefits. While some can’t return to work because of permanent disability, others could make more working than on SSDI, Neumark argued. Beyond trade adjustment assistance and retraining efforts already in place, he called for proactive employment policies, such as accommodating flexible hours or phased retirement programs.
Neumark said greater awareness of the downsides of staying out of a job—increased likelihood of cognitive decline and its related diseases—could be a motivating factor for individuals weighing early retirement.
“We have some influence on the margins about both people losing jobs and things we might do to help them find reemployment if they did,” he concluded.
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