The Philadelphia Inquirer writes on Wharton Prof. Olivia Mitchell’s idea to encourage longer work lives by paying retirees a lump sum Social Security bonus check. Under current law, anyone who delays claiming Social Security benefits past age 62 receives a higher benefit, of about 7% per year they choose to delay. Under Mitchell’s proposal, workers who delayed retirement could instead opt to receive their extra lifetime benefits as a one-time, lump sum payment. If people prefer lump sums to income streams – and there is reason to believe that they do – then this approach could encourage longer work lives.
This idea is getting a lot of publicity, so read all about it here.
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1 comment:
Andrew, I don't think the author understands the concept of adverse selection. What she is proposing is shifting the gaming point from people who outlive life expectancy to people who do not make life expectancy.
That is just a bad idea that will in the end create a bigger problem rather than a fix anything.
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