Center for Retirement Research
Center for Retirement Research Working Papers
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TITLE:
Does Work Pay at Older Ages?
AUTHOR(S):
Barbara A. Butrica
Richard W. Johnson
Karen E. Smith
Eugene Steuerle
DOCUMENT TYPE: Article
- Download the Document (PDF format - 259 K) - November 2004
- Related Files: wp_exec_2004-30.pdf (14 kB)
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Executive summary
ABSTRACT:
Encouraging work at older ages is a critical policy goal for an aging society, but many features of the current system of benefits and taxes provide strong work disincentives. The implicit tax rate on work increases rapidly at older ages, approaching 50 percent for some workers by age 70. In addition, by age 65 people can typically receive nearly as much in retirement as they can by working. If older Americans could overcome these barriers and delay retirement, they could substantially improve their economic well-being at older ages. For example, many people could increase their annual consumption at older ages by more than 25 percent by simply retiring at age 67 instead of age 62.