This is Not Your Parents’ Retirement: Comparing Retirement Income Across Generations

Abstract:     
This article examines how retirement income at age 67 is likely to change for baby boomers and persons born in generation X (GenX) compared with current retirees. We use the Social Security Administration’s Modeling Income in the Near Term (MINT) model to project retirement income and assets, poverty rates, and replacement rates for current and future retirees at age 67. We find that, in absolute terms, retirement incomes of future cohorts will increase over time, and poverty rates will fall. However, projected income gains are larger for higher than for lower socioeconomic groups, leading to increased income inequality among future retirees. Finally, because post retirement incomes are not expected to rise as much as pre-retirement incomes, baby boomers and GenXers are less likely to have enough post-retirement income to maintain their pre-retirement standard of living compared with current retirees.

Number of Pages in PDF File: 22

Keywords: Economics of aging, Social Security, pensions, economic well-being

JEL Classification: D31, H55, I3, J14, J26, J32

Accepted Paper Series