Preparing for retirement reforms: Potential consequences for saving, work, and retirement plans
If policymakers fail to act, Social Security benefits, which provide the largest portion of retirement income for many Americans, will be cut by about 25% starting in 2035.
Even with Social Security reform, some combination of a slowdown in benefit growth for retirees and higher taxes on workers likely will occur. This study, conducted by the Urban Institute and sponsored by the TIAA Institute, gauges the potential impact of reforms by quantifying the size and composition of current and projected Social Security beneficiaries with inadequate retirement income. It also examines the extent to which adequacy gaps can be reduced through additional work and saving.
To gauge retirement income levels of Social Security beneficiaries, the authors use the Urban Institute’s Dynamic Simulation of Income Model Version 4, the most sophisticated microsimulation model for retirement behavior available outside of government.
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