KELLY HAVERSTICK, Boston College - Center for Retirement Research, Center for Retirement Research at Boston College
Email: Haversti@bc.edu
MARGARITA SAPOZHNIKOV, CRA International
Email: msapozhnikov@crai.com
ROBERT K. TRIEST, Federal Reserve Bank of Boston - Research Department, Boston College
Email: robert.triest@bos.frb.org
NATALIA ZHIVAN, Center for Retirement Research at Boston College
Email: natalia.jivan.1@bc.edu

While Social Security's Normal Retirement Age (NRA) is increasing to 67, the Earliest Eligibility Age (EEA) remains at 62. Similar plans to increase the EEA raise concerns that they would create excessive hardship on workers who are worn-out or in bad health. One simple rule to increase the EEA is to tie an increase to the number of quarters of covered earnings. Such a provision would allow those with long work lives - presumably the less educated and lower paid - to quit earlier. We provide evidence that this simple rule would not satisfy the goal of preventing undue hardship on certain workers. Therefore, this paper considers an alternative policy that ties an increase in the EEA to individuals' Average Indexed Monthly Earnings (AIME). We show that allowing workers with low AIME to continue to be eligible to receive benefits at age 62 has promise as a policy to protect workers who have low earnings and are in poor health from hardship associated with an increase in the EEA.

ANDREW G. BIGGS, American Enterprise Institute
Email: andrew.biggs@aei.org

Most seniors view the Social Security earnings test as a "tax" that reduces their Social Security benefits by fifty cents for each dollar they earn above a modest limit. In fact, the earnings test is not a tax at all: at a person's full retirement age, Social Security increases benefits to account for any lost to the earnings test in earlier years. Over the typical retiree's lifetime, total benefits are almost exactly the same. Most retirees are unaware of this because the Social Security Administration (SSA) and financial advisers fail to inform them of how the earnings test works. Retirees need better information -- and policymakers should consider whether the earnings test makes sense at all.

RICHARD L. KAPLAN, University of Illinois College of Law
Email: RKAPLAN@LAW.UIUC.EDU

When a person should begin taking Social Security retirement benefits is a critical question for planning one's retirement. This article explains the various factors at play in determining the optimum starting point, including: longevity considerations; spousal implications, whether for a previously employed or a previously unemployed spouse; the impact of post-retirement employment; the availability of health insurance prior to Medicare eligibility for the worker and the worker's spouse; alternative sources of retirement income, including distributions from retirement savings plan assets and lifetime liquidation of nonretirement assets (and the pertinent income tax ramifications); and anticipated investment strategies.

ANDREW G. BIGGS, American Enterprise Institute
Email: andrew.biggs@aei.org

While Social Security is projected to begin running deficits within the next decade and become insolvent during the early 2040s, a significant degree of uncertainty accompanies these projections. This uncertainty causes some to argue for delay in addressing projected deficits.

Moreover, some proposed reforms would increase uncertainty regarding future system financing. This paper examines policies to index Social Security taxes or benefits to changes in the ratio of workers to beneficiaries, allowing for auto-correction for changing demographic factors that impact system finances.

CHRISTOPHER R. TAMBORINI, Social Security Administration - Office of Retirement Policy
Email: Chris.Tamborini@ssa.gov

This article focuses on a growing yet understudied subgroup of the elderly in the United States-the never-married. The first section, based on data from the Current Population Survey and a review of the academic literature, examines the current circumstances of never-married retirees, particularly their economic and health well-being. The succeeding section uses the Modeling Income in the Near Term (MINT) model to assess the projected (1) changes in the marital status composition of the future retirement-age population, (2) demographics of future never-married retirees, and (3) economic well-being of never-married retirees. The results highlight important links between marital trends, Social Security, and retirement outcomes and offer insight into some of the characteristics of current and future never-married retirees.

GARY BURTLESS, The Brookings Institution, Retirement Research Center, Boston College
Email: GBURTLESS@BROOK.EDU

In the half century after World War II labor force participation in the population past age 60 fell substantially in nearly all rich countries. Declining participation rates became a matter of major concern when it became clear that population growth rates were slowing and the average age of citizens in most rich countries was rising. A rapidly growing number of aged was living longer but spending a smaller number of years in the paid workforce. This paper examines recent trends in retirement behavior in 21 rich countries. It proposes three straightforward measures of labor force exit, and it estimates labor force exit rates using a variety of labor supply indicators, including the labor force participation rate, the employment rate, average work hours in the population, and average weekly earnings in the population. The results suggest that in recent years exit rates from paid work are declining among older citizens. This pattern is found both for men and women, and it is found in a large majority of countries in the analysis. In many countries labor force participation rates at older ages reached a low point in the 1990s, but since that time participation rates have increased. The rebound in male participation rates has been substantial in several countries. On average across the 21 countries, participation rates among 60-64 year-old men have rebounded over 9 percentage points since a low point in the participation rate was reached, usually in the 1990s. This rise in the participation rate of 60-64 year-old men has offset almost one-quarter of the decline in participation rates that occurred between 1960 and the low point of participation rates.

RAYMOND MICHEL MONTIZAAN, affiliation not provided to SSRN
FRANK COERVERS, University of Maastricht
Email: f.coervers@roa.unimaas.nl
ANDRIES DE GRIP, University of Maastricht - Faculty of Economics & Business Administration, Institute for the Study of Labor (IZA)
Email: A.deGrip@roa.unimaas.nl

Several studies show that employees with firm-specific skills are more likely to be covered by employer-sponsored pension schemes than workers with general skills. Therefore it can be expected that workers with firm-specific skills retire earlier. This paper tests this prediction using US data from the National Longitudinal Survey of Older Men. We find that workers who participated in firm-specific training in their early careers retire earlier than workers with a general training background. This indicates that shared investments in firm-specific training are embedded in implicit contracts that induce early retirement. The results remain robust when controlling for technological change and work commitment.

RUTH HELMAN, Mathew Greenwald & Associates
Email: RUTHHELMAN@GREENWALDRESEARCH.COM
CRAIG COPELAND, Employee Benefit Research Institute (EBRI)
Email: COPELAND@EBRI.ORG
JACK VANDERHEI, Temple University - Risk Management & Insurance & Actuarial Science, Employee Benefit Research Institute (EBRI)
Email: TEMPLE@VANDERHEI.COM
DALLAS L. SALISBURY, Employee Benefit Research Institute (EBRI)
Email: SALISBURY@EBRI.ORG

This paper presents findings from the 2008 Recent Retirees Survey, sponsored by the Employee Benefit Research Institute (EBRI) to better understand the tools and practices that might encourage workers to postpone their retirement and remain longer with their company. It finds that retirees typically retired from employers for one of four reasons: retirement becomes affordable, lack of job satisfaction, a desire for more personal or family time, and/or their own health status. One of the major findings from the survey is that employers have a narrow window of up to two years in which they may be able to intervene to change retiring workers' decisions by offering them incentives to remain with the company. Although no single incentive is likely to motivate a majority of retirees to stay longer with their employer, it appears that employers may be able to assemble a toolkit of alternatives that would be effective in retaining substantial numbers of workers at retirement age. The survey tested a total of 19 possible incentives that might encourage retiring workers to postpone retirement. The most likely incentives to be successful are: (1) feeling truly needed for an assignment; (2) allowing the worker to receive a full pension while working part time; (3) a pay increase; (4) continuing to receive company subsidized health insurance benefits at the same level as full-time workers while working part time; (5) allowing the worker to receive a partial pension while working part time so that total income remains the same; (6) being able to work seasonally or on a contract basis.