January 4, 2007

Featured Reports:

• • Health Care Costs, Taxes, and the Retirement Decision
  • Why Do Boomers Plan To Work So Long?
  • Working for a Good Retirement
  
  

  Health Care Costs, Taxes, and the Retirement Decision
  Will soaring health costs and high future tax rates lead people to delay retirement? This study assesses potential impacts by comparing retirement incomes under two different scenarios. The high-burden scenario assumes that health costs grow rapidly and tax rates rise nearly enough to balance the federal budget. The alternative assumes that burdens remain at their 2000 levels. Moderate-income couples retiring in 2030 would have to work an additional 2.5 years under the high-burden scenario to receive the same income in the first year of retirement, net of taxes and out-of-pocket health spending, as they would receive under the low-burden scenario.
  (Full Report)

  Why Do Boomers Plan To Work So Long?
  In 2004, workers ages 51 to 56 reported a 33 percent chance of working past age 65--up from 27 percent for workers that age in 1992. Expected full-time work after age 62 increased as well. Lower rates of retiree health insurance offers from employers, higher levels of educational attainment, and lower rates of defined benefit pension coverage accounted for most of the increase. The recent uptick in average retirement ages appears to be the leading edge of a long-term trend. Lengthier careers may promote economic growth, increase government revenue, and improve individual financial security at older ages.
  (Full Report)

  Working for a Good Retirement
  The choice of retirement age is the most important portfolio choice most workers will make. Drawing on the Urban Institute's Dynamic Simulation of Income model (DYNASIM3), this report examines how delaying retirement for nondisabled workers would affect individual retiree benefits, the solvency of the Social Security trust fund, and general revenues. The results suggest that delaying retirement by itself does not generate enough additional revenue to make Social Security solvent by 2045. Benefit cuts or supplementary funding sources will be necessary to achieve solvency. However, the size of the benefit cuts or tax increases could be minimized if individuals worked longer. This additional work also substantially increases worker's retirement well-being.
  (Full Report | Brief Summary))

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