Concepts and Measures of Earnings Replacement During Retirement
This paper compares the well-being of the Retirement History Survey of the elderly with their own previous levels of income and economic welfare. Traditional replacement rates are calculated, although a number of shortcomings of such measures are discussed. Modifications are made by examining career average rather than peak earnings, by adjusting for the fact that the incomes of the elderly are taxed more lightly, that the elderly do not have dependent children, and that Social Security income in retirement is a safer source ofincome than earnings earlier in life. The fully adjusted total income measures are at least as high for almost all classes of households in the survey as their career average pre-retirement earnings.
|Date of creation:||Jun 1984|
|Date of revision:|
|Publication status:||published as Bodie, Z., J.B. Shoven and D.A. Wise (eds.) Issues in Pension Economics. Chicago: University of Chicago Press, 1987.|
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- Kotlikoff, Laurence J & Spivak, Avia & Summers, Lawrence H, 1982.
"The Adequacy of Savings,"
American Economic Review,
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- Michael D. Hurd & John B. Shoven, 1983.
"The Economic Status of the Elderly,"
in: Financial Aspects of the United States Pension System, pages 359-398
National Bureau of Economic Research, Inc.
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