2. The program trustee’s report now uses the Social Security definition without calling it a “replacement rate” (Social Security Administration, 2009b:198-199).

  

3. Taking the perspective of the past, however—and depending on the actual earnings history and benefit calculation—dual-earner couples may have either lowered or raised the whole-couple earnings replacement rate, compared to that for individual workers.

  

4. As said, like Chapter 6 and unlike the rest of the report, this appendix relies on the intermediate economic and other assumptions of the 2009 report of the Social Security Trustees, rather than Congressional Budget Office assumptions. In this way our detailed Social Security illustrations are consistent with the program’s data. A recent comparison of the two is in Congressional Budget Office (2009).

  

5. To estimate these three illustrative options, the rate of real wage inflation was taken at 1.1 percent annually, the long-term rate used by the Social Security trustees for the current intermediate projections.

  

6. For this and other options, the sum for the individual provisions may not equal the option’s total (here, 2.02 percent) because of interaction among the effects of the provisions.

REFERENCES

Biggs, A.G., and Springstead, G.R. (2007). Alternate measures of replacement rates for Social Security benefits and retirement income. Social Security Bulletin, 68(2), 1-19.

Brown, J.R., and Apfel, K.S. (2006). Point/counterpoint: Would private accounts improve Social Security? Journal of Policy Analysis and Management, (Summer), 679-690.

Cogan, J., and Mitchell, O. (2003). Perspectives from on the President’s Commission on Social Security reform. Journal of Economic Perspectives, 17(2), 149-172.

Congressional Budget Office. (2001). Social Security: A Primer. Washington, DC: Congressional Budget Office.

Congressional Budget Office. (2009). CBO’s Long-Term Projections for Social Security: 2009 Update. Washington, DC: Congressional Budget Office.

Furman, J. (2005). Evaluating Alternative Social Security Reform Proposals. Testimony of May 12, 2005, before the House Committee on Ways and Means. Serial No. 109-22. Washington, DC: U.S. Government Printing Office. Available: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_house_hearings&docid=f:24732.pdf [December 2009].

Lusardi, A., and Mitchell, O.S. (2007). Baby boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics, 54(1), 205-224.

Mitchell, O.S., and Phillips, J.W.R. (2006). Social Security replacement rates for alternative earnings benchmarks. Michigan Retirement Research Center Research Paper No. WP 2006-116. Available: http://ssrn.com/abstract=1094839 [December 2009].

Social Security Administration. (2009a). Estimated Financial Effects of the ‘Social Security Solvency Act of 2009—S. 426. Memorandum to Senator Robert Bennett from the Office of the Social Security Actuary, February 12, 2009. Available: http://www.ssa.gov/OACT/solvency/index.html [November 2009].

Social Security Administration. (2009b). The 2009 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds. Washington, DC: U.S. Government Printing Office.

Steuerle, C.E., Spiro, C., and Carasso, A. (2000). Measuring Replacement Rates at Retirement. Series on straight talk on Social Security and retirement policy. Washington, DC: Urban Institute.



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