Skip to main content

Main menu

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JOR
    • Editorial Board
    • Published Ahead of Print (PAP)
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

User menu

  • Sample our Content
  • Request a Demo
  • Log in

Search

  • ADVANCED SEARCH: Discover more content by journal, author or time frame
The Journal of Retirement
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Sample our Content
  • Request a Demo
  • Log in
The Journal of Retirement

The Journal of Retirement

ADVANCED SEARCH: Discover more content by journal, author or time frame

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JOR
    • Editorial Board
    • Published Ahead of Print (PAP)
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

Measuring and Communicating Social Security Earnings Replacement Rates

Andrew G. Biggs, Gaobo Pang and Sylvester J. Schieber
The Journal of Retirement Spring 2015, 2 (4) 69-85; DOI: https://doi.org/10.3905/jor.2015.2.4.069
Andrew G. Biggs
is resident scholar at the American Enterprise Institute in Washington, D.C.
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • For correspondence: andrew.biggs@aei.org
Gaobo Pang
is senior economist at Towers Watson in Washington, D.C.
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • For correspondence: gaobo.pang@towerswatson.com
Sylvester J. Schieber
is former chairman of the Social Security Advisory Board, retired from Towers Watson, and is currently an independent consultant in New Market, MD.
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • For correspondence: syl.schieber@gmail.com
  • Article
  • Info & Metrics
  • PDF (Subscribers Only)
Loading

Click to login and read the full article.

Don’t have access? Click here to request a demo 

Alternatively, Call a member of the team to discuss membership options
US and Overseas: +1 646-931-9045
UK: 0207 139 1600

Abstract

Financial advisors commonly use earnings replacement rates to assist workers in their retirement planning. Policymakers and analysts use them to gauge the adequacy of Social Security benefits and other retirement income in allowing retirees to maintain preretirement living standards. In recent years, the Social Security trustees have regularly published replacement rates that have been widely interpreted as the extent to which Social Security benefits replace earnings of workers at various points in the lifetime earnings distribution. However, the trustees’ replacement rates are calculated differently than those generally used for retirement planning purposes, possibly leading to confusion among policymakers and others regarding how much of workers’ earnings are replaced by Social Security and how much those workers need to save on their own for retirement. Financial planners calculate replacement rates by comparing an individual’s retirement income to that same individual’s preretirement earnings, generally earnings in the years immediately preceding retirement. The Social Security Administration, by contrast, effectively calculates replacement rates by comparing retiree incomes to the incomes of contemporaneous workers. This latter measure is often used in other countries but differs both qualitatively and quantitatively from the more common replacement-rate calculations used for financial planning purposes. We find that replacement rates calculated on a financial planning basis are generally higher than those published by the Social Security trustees and that Social Security benefits generally replace somewhat more of individual workers’ earnings than the trustees’ rates suggest.

TOPICS: Retirement, social security

  • © 2015 Pageant Media Ltd
View Full Text

Don’t have access? Click here to request a demo

Alternatively, Call a member of the team to discuss membership options

US and Overseas: +1 646-931-9045

UK: 0207 139 1600

Log in using your username and password

Forgot your user name or password?
PreviousNext
Back to top

Explore our content to discover more relevant research

  • By topic
  • Across journals
  • From the experts
  • Monthly highlights
  • Special collections

In this issue

The Journal of Retirement: 2 (4)
The Journal of Retirement
Vol. 2, Issue 4
Spring 2015
  • Table of Contents
  • Index by author
Print
Download PDF
Article Alerts
Sign In to Email Alerts with your Email Address
Email Article

Thank you for your interest in spreading the word on The Journal of Retirement.

NOTE: We only request your email address so that the person you are recommending the page to knows that you wanted them to see it, and that it is not junk mail. We do not capture any email address.

Enter multiple addresses on separate lines or separate them with commas.
Measuring and Communicating Social Security Earnings Replacement Rates
(Your Name) has sent you a message from The Journal of Retirement
(Your Name) thought you would like to see the The Journal of Retirement web site.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
Citation Tools
Measuring and Communicating Social Security Earnings Replacement Rates
Andrew G. Biggs, Gaobo Pang, Sylvester J. Schieber
The Journal of Retirement Apr 2015, 2 (4) 69-85; DOI: 10.3905/jor.2015.2.4.069

Citation Manager Formats

  • BibTeX
  • Bookends
  • EasyBib
  • EndNote (tagged)
  • EndNote 8 (xml)
  • Medlars
  • Mendeley
  • Papers
  • RefWorks Tagged
  • Ref Manager
  • RIS
  • Zotero
Save To My Folders
Share
Measuring and Communicating Social Security Earnings Replacement Rates
Andrew G. Biggs, Gaobo Pang, Sylvester J. Schieber
The Journal of Retirement Apr 2015, 2 (4) 69-85; DOI: 10.3905/jor.2015.2.4.069
del.icio.us logo Digg logo Reddit logo Twitter logo Facebook logo Google logo LinkedIn logo Mendeley logo
Tweet Widget Facebook Like LinkedIn logo

Jump to section

  • Article
    • Abstract
    • CONCEPTUAL ISSUES
    • DEVELOPMENT OF CURRENT SSA OACT REPLACEMENT RATE CALCULATIONS
    • MOVING FROM CONCEPT TO MEASUREMENT
    • CONCLUSIONS
    • ENDNOTES
    • REFERENCES
  • Info & Metrics
  • PDF (Subscribers Only)
  • PDF (Subscribers Only)

Similar Articles

Cited By...

  • How Hard Should We Push the Poor to Save for Retirement?
  • The Life Cycle Model, Replacement Rates, and Retirement Income Adequacy
  • Mandated Retirement Systems and Implied Benefits and Costs for Workers from Various Generations in Selected Countries
  • Mean-Variance Analysis in Post-Retirement Planning
  • Google Scholar
LONDON
One London Wall, London, EC2Y 5EA
United Kingdom
+44 207 139 1600
 
NEW YORK
41 Madison Avenue, New York, NY 10010
USA
+1 646 931 9045
pm-research@pageantmedia.com
 

Stay Connected

  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

MORE FROM PMR

  • Home
  • Awards
  • Investment Guides
  • Videos
  • About PMR

INFORMATION FOR

  • Academics
  • Agents
  • Authors
  • Content Usage Terms

GET INVOLVED

  • Advertise
  • Publish
  • Article Licensing
  • Contact Us
  • Subscribe Now
  • Log In
  • Update your profile
  • Give us your feedback

© 2022 Pageant Media Ltd | All Rights Reserved | ISSN: 2326-6899 | E-ISSN: 2326-6902

  • Site Map
  • Terms & Conditions
  • Cookies
  • Privacy Policy