Brief Health Care Costs, Taxes, and the Retirement Decision
Conceptual Issues and Illustrative Simulations
Rudolph G. Penner, Richard W. Johnson
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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.
Research Areas Aging and retirement
Tags Economic well-being Pensions Medicare and private health insurance Health insurance Retirement policy
Policy Centers Income and Benefits Policy Center