WASHINGTON — U.S. workers born after 1976 who are now 50 may see the first cuts to Social Security benefits if they continue to work long-term after retirement, according to a new report.
The report, released by the Center for Economic and Policy Research, takes a close look at long-term effects of retirement on the nation’s older workforce.
While the country has made great strides in creating more jobs for older workers, some longer-term consequences remain. The report found that retirement could become more difficult if workers have to remain employed during low-paying jobs or if employers cut benefits, a trend common among companies with private pension plans.
To review the report, click here.
Full benefits are the single largest U.S. transfer program and the single largest government entitlement program after Social Security. The average annual benefit is $15,920 for those who are today’s active-duty, disabled and retired workers.
“Social Security has been critical to economic security, boosting the economic wellbeing of older workers and their families for more than 80 years,” said Dean Baker, co-author of the study and co-director of the Center for Economic and Policy Research. “Older workers who anticipate the need to remain in the labor force because of financial struggles during retirement are struggling. Unless Congress acts to make current proposals on restoring Social Security more equitable, the cost of this workforce legacy will remain a drag on future economic growth.”
On the economic side, the report asserts that “Social Security’s retirement insurance program is required to make its payroll tax payments, and as such should be kept whole by taxing earnings over the present value of future payments. This [generational] lens can give an understanding of the implications of this budgetary burden for workers living over the long run, including today’s retirees.”
The report also notes that “work can also lead to disabilities, poor health, and depressed personal well-being, as well as early deaths that can be associated with non-working age. These issues have been raised, but are often not considered in the debate over the solvency of Social Security, and lawmakers do not work to address them.”