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A new approach to raising Social Security’s earliest eligibility age

Author

Listed:
  • Kelly Haverstick
  • Margarita Sapozhnikov
  • Robert K. Triest
  • Natalia Zhivan

Abstract

While 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 who 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 work lives—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. Therefore, 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.

Suggested Citation

  • 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 08-4, Federal Reserve Bank of Boston.
  • Handle: RePEc:fip:fedbpp:08-4
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    File URL: http://www.bostonfed.org/economic/ppdp/2008/ppdp0804.htm
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    References listed on IDEAS

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    1. repec:crr:issbrf:ib2007-7-3 is not listed on IDEAS
    2. 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, pages 441-463.
    3. 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 wp2006-17, Center for Retirement Research, revised Sep 2006.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. 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 aca13fdc8ba2439486551946d, Mathematica Policy Research.
    2. Geoffrey T. Sanzenbacher & Jorge D. Ramos-Mercado, 2016. "Calculating Expected Social Security Benefits by Race, Education, and Claiming Age," Working Papers, Center for Retirement Research at Boston College wp2016-14, Center for Retirement Research.
    3. Natalia Zhivan & Steven A. Sass & Margarita Sapozhnikov & Kelly Haverstick, 2008. "An "Elastic" Earliest Eligibility Age for Social Security," Issues in Brief ib2008-8-2, Center for Retirement Research, revised Feb 2008.
    4. repec:mpr:mprres:6248 is not listed on IDEAS

    More about this item

    Keywords

    Social security ; Retirement income;

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