Publications by Austin Nichols for Retirement Policy

There is abundant advice about how much to save, much of which urges individuals to aim to replace 80 percent of their preretirement pretax income. However, those who wait to save for retirement and follow this rule of thumb would save far too much of their gross income, and many would see their annual resources spike upward when they retire. The constant savings rate required to equalize consumption across the preretirement and postretirement years generally is generally much lower than the 80 percent rule.

Unemployed workers participate in various temporary assistance programs. They are also more likely to apply for Disability Insurance (DI) and Supplemental Security Income (SSI), growing programs with large costs. Temporary benefits can both increase and decrease probabilities of re-employment and application for DI/SSI. When controlling for selection bias, we find evidence that increased access to unemployment benefits reduces applications for DI, while increased access to food benefits increases applications for SSI. These results suggest that applications for DI/SSI are sensitive to participation in temporary assistance programs, and that increased access to unemployment is less costly than it may appear.

Immigration is transforming the U.S. labor force with important consequences for Social Security's adequacy and finances. Using longitudinal data from the Survey of Income and Program Participation matched to administrative data on lifetime earnings and benefit receipt, we measure the extent to which nonnatives' lifetime earning patterns, payroll taxes paid, benefits received, and total incomes differ from those for the U.S.-born population. We consider other outcomes important to retirement security, like health status, marital status, and financial wealth. We also compare various immigrant groups with one another. Our findings stress heterogeneity in labor force and Social Security experiences among immigrants.

Over the past several decades, the volatility of family income has increased markedly, and own earnings volatility has remained relatively flat. Volatility may affect retirement wealth, depending on whether volatility affects accrued pension contributions or withdrawals or earnings credited toward future Social Security benefits. This project assesses the effect of the volatility of individual and family earnings on asset accumulation and projected retirement wealth using survey data matched to administrative earnings records.

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