Does Work Pay at Older Ages?

Research Report

Does Work Pay at Older Ages?


Encouraging work at older ages is a critical policy goal for an aging society, but many features of the current system of benefits and taxes provide strong work disincentives. The implicit tax rate on work increases rapidly at older ages, approaching 50 percent for some workers by age 70. In addition, by age 65 people can typically receive nearly as much in retirement as they can by working. If older Americans could overcome these barriers and delay retirement, they could substantially improve their economic well-being at older ages. For example, many people could increase their annual consumption at older ages by more than 25 percent by simply retiring at age 67 instead of age 62.

Cross-Center Initiative

Cross-Center Initiative: 
To reuse content from Urban Institute, visit, search for the publications, choose from a list of licenses, and complete the transaction.