Brief Working for a Good Retirement
Barbara Butrica, Karen E. Smith, C. Eugene Steuerle
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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.
Research and Evidence Tax and Income Supports Technology and Data
Expertise Taxes and the Economy Wealth and Financial Well-Being Microsimulation Modeling Aging and Retirement
Research Methods Dynamic Simulation of Income Model 4 (DYNASIM4)
Tags Economic well-being Pensions Wages and nonwage compensation Individual taxes Retirement policy