Only Top Earners Benefit from Older Retirement
Living longer is the best revenge, a new study concludes, especially if calls for an increase in the retirement age for Social Security are answered. But that’s only true if you’re at the top of the economic heap.
A new study from the Center for Economic and Policy Research (CEPR) shows that over the past few decades, most of the gains from increased life expectancy have gone to those at the top of the income distribution. Any further increases in normal retirement age could more than offset potential gains from living longer if you’re in the bottom half of 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 examined the expected years of retirement in several age groups, both under current law and looking at an increase in retirement age to 70. It also projected 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 pool.
“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, no shorter ones.”
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