Transcript Comments: Does Eliminating the Retirement Older Women? By Figinski and Neumark

Comments: Does Eliminating the Retirement
Earnings Test Increase the Poverty Rates of
Older Women? By Figinski and Neumark
 Howard Iams
 Social Security Administration
 RRC 2015 meetings
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This information is the author’s own opinion and does not represent the position of the
Social Security Administration
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Does eliminating the RET contribute to earlier
claiming?
 Research with Administrative data indicates
that earlier claiming occurred (Song& Manchester).
Increased claiming at FRA or older in 2000—25 % at age 65-69 and 3-7% reaching age 65
 Increased claiming at FRA in 2000-2005- 4%
of men, 2 % of women
 Earlier claiming would reduce the RW benefit and
survivor benefits that follow.
 Poverty Effect? Not measured in Admin data
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Findings
 RET Elimination at FRA decreases
claiming ages at FRA and above and
reduces individual and family SS benefits.
 Women have higher income and benefits
just above age 70 but lower at 75-76 (when
more are widowed).
 Old age poverty rates of women and low
income levels increased by RET
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elimination.
Extensions- Widows will be most affected by husband’s
RET elimination. Study effects on women
with husbands born 1935-1945.
 HRS asked net SS benefits. Add estimated
CMS premiums at >=65 to get total SS
benefits.
 Use administrative data for 50 % of sample
with matched data to 2012 survey
respondents.
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Inform with type of SS benefits—survivor
only, dually entitled survivor, worker only
More accurate CMS premiums for total SS $.
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 Benefits are based on lifetime earnings and
marital history
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Retired Worker benefits based on own earnings
Few claim RW benefits after FRA—7% in 2014,
8% in 1999
Lifetime earnings of wives are usually lower
than husband’s lifetime earnings.
MINT projects 2/3 of Gen-X and ¾ of Baby
boomer women will get survivor benefits when
their husbands are dead.
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 Marriage patterns contributes to widows
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Husbands in a first marriage-about three years
older than their wives.
Life expectancy of women about 3-4 years
longer than men at age 65
Results in older women being widowed.
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Eliminate RET and increase incentive for
claiming benefits at an earlier age
reducing widow benefits.
 Widows get husband’s benefit.
 Widow’s limit establishes that the
survivor cannot receive more dollars in
monthly benefit than her deceased
husband received.
 Earlier SS take-up reduces husband’s
benefit and subsequent widow benefit.
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