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Increase in Retirement Age Disproportionately Hurts Workers at the Bottom

The Center for Economic and Policy Research has just released a new report exploring the facts behind recent calls for raising Social Security’s retirement age. [Full disclosure: Dean Baker, CEPR’s co-director, is a member of EOI’s board.] In their own words:

As evidenced in a recent statement from the American Academy of Actuaries, some politicians and policy groups continue to call for an increase in the normal retirement age for Social Security. A new study from the Center for Economic and Policy Research notes that over the last few decades most of the gains from increased life expectancy have gone to those at the top of the income distribution. The report projects that any further increases in the normal retirement age could more than offset potential gains from longer life expectancy in the bottom half of the income distribution.

“An increase in the retirement age to 70 means that many retirees will experience retirements even shorter than those of their grandparents,” said Dean Baker, a co-director of CEPR and an author of the report.

The report, “The Impact of Income Distribution on the Length of Retirement,” examines the expected years of retirement for men in several age cohorts both under current law and assuming an increase in the retirement age to 70. The report also projects length of retirement with and without continued increases in inequality of life expectancy gains between the top and the bottom halves of the income distribution.

“Lower earners are even more dependent on Social Security for their retirement income than other workers,” said David Rosnick, a CEPR economist and co-author of the report. “With large productivity gains over the past decades, these workers should enjoy longer retirements, not shorter ones.”

Read more from the Center for Economic and Policy Research »

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