View Research by Author - Howard Iams

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This article examines how retirement income is likely to change for boomers and persons born in generation X compared with current retirees. We use the MINT model to project retirement income, poverty rates, and replacement rates for current and future retirees at age 67. We find that retirement incomes will increase over time, and poverty rates will fall. Projected income gains are larger for higher than for lower socioeconomic groups, leading to increased income inequality among future retirees. Boomers and GenXers are less likely to have enough postretirement income to maintain their preretirement standard of living compared with current retirees.

Over the last three decades there has been a steady shift from DB to DC pensions. The Pension Protection Act of 2006 may accelerate this trend. This paper examines the impact of an accelerated freeze on the retirement income of boomers. Simulations suggest that such a scenario would produce more losers than winners and reduce average retirement incomes. Income changes will be substantial among high-income workers, who have the highest DB coverage and pension incomes. Late boomers will experience the largest impacts, as they lose their high DB accrual years and have inadequate time to accumulate DC wealth before retirement.

This analysis assesses the role of Social Security and Supplementary Security Income (SSI) in the economic well-being of baby-boomer retirees and their predecessors. The results suggest that, similar to current retirees, Social Security will account for about two-fifths of projected income for baby-boomer retirees. On average, SSI will contribute almost nothing to total income and will be received by fewer baby-boomer retirees than current retirees. Although baby boomers can expect higher incomes and lower poverty rates at retirement than current retirees have, they can also expect lower replacement rates. The decline in replacement rates is driven, in part, by a decline in Social Security replacement rates.

Using the Social Security Administration's Model of Income in the Near Term (MINT), this paper compares the retirement prospects of baby boomer retirees with previous generations. In absolute terms, measured by per capita income and poverty rates, baby boomers are projected to be better off than current retirees. In relative terms, however, many baby boomers will be worse off than current retirees. First, the relative ranking of important subgroups is expected to change over time. Second, baby boomers are less likely than current retirees to have enough post-retirement income to maintain their pre-retirement living standards. These findings hold up to various definitions of family income and replacement rates.

This paper presents alternative measures of actual and projected net benefits (benefits minus payroll taxes) from the Old and Survivor’s Insurance (OASI) component of Social Security, based on results from a microsimulation model. The simulations take into account marital histories, income, and tax-burden sharing within couples and differences in life expectancy among sub-groups of the population. We find that OASI is becoming more redistributive towards lower income groups over time, even as net benefits decline, mostly because of changing demographics and earnings patterns of the workforce.

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