Working Longer Cannot Solve the Retirement Crisis

Teresa Ghilarducci, Michael Papadopoulos, Bridget Fisher and Anthony Webb ()

No 2021-01, SCEPA policy note series. from Schwartz Center for Economic Policy Analysis (SCEPA), The New School

Abstract: Working longer is often proposed as the solution to the retirement crisis caused by older workers’ lack of retirement assets. Spreadsheet models used by advocates of delaying retirement assume older workers delay claiming Social Security to accrue additional benefits. But in reality, by age 65, most older workers have already claimed Social Security, often to supplement low wages, and working longer does not increase their Social Security benefits. Working longer increases retirement savings significantly less than predicted by spreadsheet models, which don’t reflect older workers’ real experiences in the labor market. Finally, the drastic job loss experienced by older workers in the wake of the Covid-19 crisis reveals the risk older workers face when working longer is the policy substitute for an effective retirement security system.

Keywords: Covid-19; Public health; Social security; Working longer; Workers; Jobs; Unemployment; Risk; Older workers; retirement income; retirement; retirement savings (search for similar items in EconPapers)
JEL-codes: E21 E24 I14 J32 J38 J62 J83 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2021-02
New Economics Papers: this item is included in nep-age and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:epa:cepapn:2021-01

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