UM06-02: How Changes in Social Security Affect Retirement Trends
Respondent data collected in the Health and Retirement Study (HRS) suggest that the trend to earlier retirement is reasserting itself among younger HRS men, after having leveled off from its historic decline over the past 15 years. In contrast, data for men over 65 suggest newer cohorts are retiring later. One goal of this project will be to reconcile these contradictory findings. We will do so with a structural retirement model of retirement and saving, which we have shown in recent publications can explain important aspects of retirement outcomes that cannot be explained by reduced form models, e.g., the spike in retirements at age 62. Once this is accomplished, we will use a structural model of retirement and saving to estimate the effects of changing Social Security policies and pensions on retirement trends, both in the past and into the future. The proposed project will allow SSA to better understand underlying retirement trends, how Social Security and its provisions affect the many dimensions of retirement behavior, and what trends to expect in the future as a result of policies currently in place and under consideration.