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Answer Quickly: How Much Do You Think You'll Get from Social Security?

AEI Retirement Policy Outlook, No. 4, June 2009

5 Pages Posted: 15 Jul 2009  

Andrew G. Biggs

American Enterprise Institute

Date Written: June 1, 2009

Abstract

This year, one in four new retirees will discover that their largest retirement income source falls 28 percent or more below their expectations. But that asset is not a recession-battered 401(k) account. It is Social Security. To understand why, answer quickly: How much do you think your Social Security benefit will be? If you do not know, you are in good company. Due to the complexity of Social Security's benefit formula, a worryingly large proportion of Americans have no idea what their Social Security benefit will be until the first check arrives. This 'predictability risk' is just as costly as the market risk associated with 401(k) plans. Simplifying Social Security benefits should be a priority when reform is addressed.

Keywords: social security, social security reform, retirement income

JEL Classification: H55, J26

Suggested Citation

Biggs, Andrew G., Answer Quickly: How Much Do You Think You'll Get from Social Security? (June 1, 2009). AEI Retirement Policy Outlook, No. 4, June 2009. Available at SSRN: https://ssrn.com/abstract=1433355

Andrew G. Biggs (Contact Author)

American Enterprise Institute ( email )

1150 17th Street N.W.
Washington, DC 20036
United States
202-862-5841 (Phone)

HOME PAGE: http://www.aei.org

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