Retiring in debt? An update on the 2007 near-retiree cohort

This research note uses 2007 Survey of Consumer Finances (SCF) data to update the authors' work reported in a prior article, which used earlier data to assess debt levels among households approaching retirement in 1995 and 2004. The authors assess whether there have been changes in the debt holdings of near-retirees in 2007, a point in time reflecting the start of the recent financial and economic crisis. Results show that debt levels of near-retirees were modestly higher in 2007 than in 2004, overall and across several subgroups. The results reinforce a general finding of the original article that current near-retirees, primarily baby boomers, are approaching retirement with more debt compared with their counterparts in the mid-1990s. Because the 2007 SCF data captures only the beginning of the current recession, the authors expect future trends to differ from the results presented here.     

LONGEVITY‐RELATED OPTIONS FOR SOCIAL SECURITY: A MICROSIMULATION APPROACH TO RETIREMENT AGE AND MORTALITY ADJUSTMENTS

We consider the distributional implications of Social Security policy changes in the context of increases in life expectancy and differential mortality. Using a robust microsimulation model, we examine how several options for raising the retirement age, including a scenario that applies a mortality adjustment in combination with such policies, affect different types of individuals and households. Policy changes are simulated for Social Security beneficiaries in 2030 using the Modeling Income in the Near Term (MINT) microsimulation model. The analysis shows that increasing either the age at which individuals receive their full retirement benefit alone or the early eligibility and full retirement ages together result in across‐the‐board reductions in benefit levels. The policies are projected to result in slightly higher poverty, but the expected rise is sharper among groups known to experience higher rates of mortality, as well as many disadvantaged groups. Analysis of a hypothetical adjustment to offset the historical impacts of differential mortality by lifetime earnings on lifetime benefit receipt, when combined with these retirement age increases, shows varied results. While some groups of individuals experience sharper reductions in median monthly benefits, the adjustment has an offsetting and protective effect for the benefits of disadvantaged groups when combined with options that would raise the retirement age. This combined package of policies, as well as simulations that incorporate a behavioral adjustment in benefit claiming ages, result in an increase of less than one percentage point in the average poverty rate.     

A profile of social security child beneficiaries and their families: sociodemographic and economic characteristics

Using a rich dataset that links the Census Bureau's Survey of Income and Program Participation calendar-year 2004 file with Social Security benefit records, this article provides a portrait of the sociodemographic and economic characteristics of Social Security child beneficiaries. We find that the incidence ofbenefit receipt in the child population differs substantially across individual and family-level characteristics. Average benefit amounts also vary across subgroups and benefit types. The findings provide a better understanding of the importance of Social Security to families with beneficiary children. Social Security is a major source of family income for many child beneficiaries, particularly among those with low income or family heads with lower education and labor earnings.