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

Social Security Bulletin, Vol. 72, No. 1, pp. 37-58, 2012

22 Pages Posted: 6 Feb 2012 Last revised: 25 Apr 2015

Barbara A. Butrica

The Urban Institute

Karen E. Smith

Urban Institute

Howard Iams

U.S. Social Security Administration

Date Written: February 1, 2012

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 postretirement incomes are not expected to rise as much as preretirement incomes, baby boomers and GenXers are less likely to have enough postretirement income to maintain their preretirement standard of living compared with current retirees.

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

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

Suggested Citation

Butrica, Barbara A. and Smith, Karen E. and Iams, Howard, This is Not Your Parents’ Retirement: Comparing Retirement Income Across Generations (February 1, 2012). Social Security Bulletin, Vol. 72, No. 1, pp. 37-58, 2012. Available at SSRN: https://ssrn.com/abstract=1997415

Barbara A. Butrica (Contact Author)

The Urban Institute ( email )

2100 M Street, N.W.
Washington, DC 20037
United States

Karen E. Smith

Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

Howard Iams

U.S. Social Security Administration ( email )

Washington, DC 20254
United States

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