Key Findings Details
Behavioral Effects of Social Security Policies on Benefit Claiming, Retirement and Saving
Alan L. Gustman and Thomas L. Steinmeier
- We use a retirement model that includes Social Security benefit claiming as an outcome to determine the effects of proposed changes to Social Security.
- Increasing the early entitlement age to 64 increases full-time employment at ages 62 and 63 by approximately 12 percentage points. The spike in retirement from full-time work, which presently occurs at age 62, would be shifted to age 64 by this change.
- Increasing the normal retirement age to 67 for those who had an age 65 normal retirement age increases full-time work by substantially less than the increases caused by raising the early entitlement age.
- Eliminating the payroll tax after the normal retirement age reduces full-time work by between 0.5 and 1 percent between age 60 and age 64 and increases full-time work by between 1 and 2 percent at age 65 and thereafter.