Research Report Does Work Pay at Older Ages?
Barbara Butrica, Richard W. Johnson, Karen E. Smith, C. Eugene Steuerle
Display Date
Download Report
(222.51 KB)

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.
Research Areas Wealth and financial well-being Aging and retirement Taxes and budgets
Tags Social Security Economic well-being Pensions Wages and nonwage compensation Individual taxes Retirement policy
Policy Centers Income and Benefits Policy Center