The decline in the generosity of Social Security benefits for workers who recently reached their 60s has been the leading cause of the trend toward delayed retirement of older men, a new national study suggests.Between the periods of 1988-1992 and 2001-2005, there was a 4.7 percentage point increase in the number of men aged 55 to 69 in the workforce.
The new study found that between 25 and 50 percent of that increase can be explained by declining Social Security benefits, said David Blau, co-author of the study and professor of economics at Ohio State University. ...
The study identified two Social Security changes in particular that have led older men to work longer: the increase in the full retirement age beyond age 65, and the financial incentives offered to older workers to delay retirement even beyond the full retirement age.
May 12, 2010
Staying In The Workforce
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2 comments:
The article says more people are working longer due to "declining social security benefits." Then they identified 2 reasons for people working longer.
One is the financial incentive of increased benefits for doing so -- employees can get delayed retirement credits or receive their social security while continuing to work.
The other reason is a reduction in benefits that has more affect now, but had very little impact during the 2001-2005 years included in the study.
Another study on the same web site released 2 days later comes to a different conclusion:
"ScienceDaily (Apr. 7, 2010) — An unprecedented upturn in the number of older Americans who delay retirement is likely to continue and even accelerate over the next two decades, a trend that should help ease the financial challenges facing both Social Security and Medicare, according to a new RAND Corporation study."
"While there have been several changes made to Social Security that encourage people to work longer, researchers say those changes appear to be a secondary force behind the trend observed thus far."
http://www.sciencedaily.com/releases/2010/04/100407121225.htm
This isn't hard to understand. People whose retirement savings and 401k's have been wiped out twice since 1999 or so can't retire. They're broke. So they work. One effect of having a Social Insurance system is to make it possible for older workers to quit work making room for younger workers. It's not happening now as much as it did say 15 years ago.
Ask young people now how easy it is to find jobs and they're likely to say, "What jobs?" followed by, "Gotta go pick up Grandma at Publix. Her shift ends in half an hour." The Rand corporation's findings aren't good news. Deficit Commission, anyone?
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