FIGURE 6-5 Monthly Social Security benefits for workers who retire at age 65 under current law and under Option 1 (in 2009 dollars).

FIGURE 6-5 Monthly Social Security benefits for workers who retire at age 65 under current law and under Option 1 (in 2009 dollars).

FIGURE 6-6 Social Security benefits as a percentage of past earnings for new retirees at age 65 under current law and under Option 1.

FIGURE 6-6 Social Security benefits as a percentage of past earnings for new retirees at age 65 under current law and under Option 1.

show the option’s effects on monthly benefits, the replacement of individual earnings by benefits, and on payroll taxes paid.)

Although it leads to more years of benefits, early retirement makes a big reduction in monthly benefits, under both current law and this option. For example, under current law, retiring in 2050 at 65 rather than at that year’s age for full benefits of 67 means 15.4 percent less in scheduled monthly benefits. As a result, Option 1’s increase of the retirement age for full benefits markedly contributes to lower monthly benefits. The first triplet of bars in Figure 6-5 represents monthly benefits of illustrative “low earners,” people with average lifetime earnings of $18,919 per year, in 2009 dollars.23 The three bars show that under current law, new retirees categorized as low earners are projected to receive $834 per month in 2010,



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