Friday, August 28, 2015

CRFB: “Are Social Security Benefits Modest?”

It depends on how you measure them. Check out the Committee for a Responsible Federal Budget’s whole discussion here.

For myself, I tend to think a replacement rate (properly measured) is a better measure of relative generosity than absolute dollars, both because it captures retirement income adequacy and because it implicitly looks at tax rates, which are also a percentage of earnings. For instance, when we compare pension taxes we tend to look at rates rather than absolute dollars. All that said, these are issues that don’t get nearly enough attention – and I’m glad the Committee for a Responsible Federal Budget is adding that.

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