A New Approach to Raising Social Security's Earliest Eligibility Age
AbstractWhile Social Security’s Normal Retirement Age (NRA) is increasing to 67, the Earliest Eligibility Age (EEA) remains at 62. Similar plans to increase the EEA raise concerns that they would create excessive hardship on workers that are worn-out or in bad health. One simple rule to increase the EEA is to tie an increase to the number of quarters of covered earnings. Such a provision would allow those with long worklives — presumably the less educated and lower paid — to quit earlier. We provide evidence that this simple rule would not satisfy the goal of preventing undue hardship on certain workers. Thus, this paper considers an alternative policy that ties an increase in the EEA to individuals’ Average Indexed Monthly Earnings (AIME). We show that allowing workers with low AIME to continue to be eligible to receive benefits at age 62 has promise as a policy to protect workers who have low earnings and are in poor health from hardship associated with an increase in the EEA.
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Bibliographic InfoPaper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number wp2007-19.
Length: 47 pages
Date of creation: Oct 2007
Date of revision: Oct 2007
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Other versions of this item:
- Kelly Haverstick & Margarita Sapozhnikov & Robert K. Triest & Natalia Zhivan, 2008. "A new approach to raising Social Security’s earliest eligibility age," Public Policy Discussion Paper, Federal Reserve Bank of Boston 08-4, Federal Reserve Bank of Boston.
- NEP-AGE-2008-03-25 (Economics of Ageing)
- NEP-ALL-2008-03-25 (All new papers)
- NEP-LAB-2008-03-25 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alan L. Gustman & Thomas L. Steinmeier, 2002.
"The Social Security Early Entitlement Age in a Structural Model of Retirement and Wealth,"
NBER Working Papers
9183, National Bureau of Economic Research, Inc.
- Gustman, Alan L. & Steinmeier, Thomas L., 2005. "The social security early entitlement age in a structural model of retirement and wealth," Journal of Public Economics, Elsevier, Elsevier, vol. 89(2-3), pages 441-463, February.
- Alan L. Gustman & Thomas L. Steinmeier, 2002. "The Social Security Early Entitlement Age in a Structural Model of Retirement and Wealth," Working Papers, University of Michigan, Michigan Retirement Research Center wp029, University of Michigan, Michigan Retirement Research Center.
- Alicia H. Munnell & Steven Sass & Mauricio Soto & Natalia Zhivan, 2006. "Has the Displacement of Older Workers Increased?," Working Papers, Center for Retirement Research at Boston College, Center for Retirement Research wp2006-17, Center for Retirement Research, revised Sep 2006.
- repec:crr:issbrf:ib2007-7-3 is not listed on IDEAS
- Natalia Zhivan & Steven A. Sass & Margarita Sapozhnikov & Kelly Haverstick, 2008. "An "Elastic" Earliest Eligibility Age for Social Security," Issues in Brief, Center for Retirement Research ib2008-8-2, Center for Retirement Research, revised Feb 2008.
- David C. Stapleton, 2009. "Employment Support for the Transition to Retirement: Can a New Program Help Older Workers Continue to Work and Protect Those Who Cannot?," Mathematica Policy Research Reports, Mathematica Policy Research 6248, Mathematica Policy Research.
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