Projections of Economic Well-Being for Social Security Beneficiaries in 2022 and 2062

Abstract

This article assesses the prospects for retirement security among Social Security beneficiaries in 2022 and 2062. In absolute terms, beneficiaries in 2062 will be better off than those in 2022, at least assuming Social Security benefits scheduled under current law. Those beneficiaries will have greater incomes and more financial wealth (in constant 2004 dollars), as well as lower poverty rates. Relative measures of well-being, however, suggest a decline in well-being between 2022 and 2062. More beneficiaries will have low incomes relative to their peers, income replacement rates (retirement income relative to career earnings) will decline, and financial wealth will grow more slowly than wages. Projected improvements over time would lessen, and declines would be exacerbated, if Social Security benefits are reduced according to what is payable under current-law taxes.

Keywords: Social Security and Public Pensions, Demographic Trends and Forecasts, Economics of the Elderly, Public Policy, Retirement

JEL Classification: H55, J11, J14, J18, J26