Comparing Adequacy Adjustments to Social Security

Brief

Comparing Adequacy Adjustments to Social Security

How Well Do Adequacy Adjustments Target Different Beneficiaries?

Abstract

Over the years, bipartisan recommendations for putting Social Security on a more fiscally sustainable path have used various combinations of revenue increases and benefit reductions. Many have also included reforms that would ensure adequate benefits, known as adequacy adjustments, for those who particularly depend on the income the program provides. Using Urban’s DYNASIM model, this report examines the distributive effects of ten prominent proposals for adequacy adjustments, identifying how each adjustment would affect different groups of people broken down by a) lifetime earnings, (b) poverty status, (c) years of low-wage work, (d) total lifetime work effort, and (e) age. The significance of this analysis is its focus on projecting the distribution of benefits for these ten adequacy adjustments among future Social Security beneficiaries. Instead of the usual focus on the solvency impacts of Social Security reforms, this report informs policymakers on where the benefits of proposed changes will likely go, which can inform debates about how to structure future Social Security changes.

External Link:

https://www.aarp.org/ppi/info-2020/comparing-adequacy-adjustments-to-social-security.html

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