1. Comments: Does Eliminating the Retirement Earnings Test Increase the Poverty Rates of Older Women? By Figinski and Neumark §Howard Iams §Social Security Administration §RRC 2015 meetings §This information is the author’s own opinion and does not represent the position of the Social Security Administration 1

2. 2 Does eliminating the RET contribute to earlier claiming? §Research with Administrative data indicates that earlier claiming occurred (Song& Manchester). l Increased claiming at FRA or older in 2000—2- 5 % at age 65-69 and 3-7% reaching age 65 l Increased claiming at FRA in 2000-2005- 4% of men, 2 % of women §Earlier claiming would reduce the RW benefit and survivor benefits that follow. §Poverty Effect? Not measured in Admin data

3. Findings §RET Elimination at FRA decreases claiming ages at FRA and above and reduces individual and family SS benefits. §Women have higher income and benefits just above age 70 but lower at 75-76 (when more are widowed). §Old age poverty rates of women and low income levels increased by RET elimination. 3

4. Extensions-- § Widows will be most affected by husband’s RET elimination. Study effects on women with husbands born 1935-1945. § HRS asked net SS benefits. Add estimated CMS premiums at >=65 to get total SS benefits. §Use administrative data for 50 % of sample with matched data to 2012 survey respondents. l Inform with type of SS benefits—survivor only, dually entitled survivor, worker only l More accurate CMS premiums for total SS $. 4

5. 5 §Benefits are based on lifetime earnings and marital history l Retired Worker benefits based on own earnings l Few claim RW benefits after FRA—7% in 2014, 8% in 1999 l Lifetime earnings of wives are usually lower than husband’s lifetime earnings. l MINT projects 2/3 of Gen-X and ¾ of Baby boomer women will get survivor benefits when their husbands are dead.

6. §Marriage patterns contributes to widows l Husbands in a first marriage-about three years older than their wives. l Life expectancy of women about 3-4 years longer than men at age 65 l Results in older women being widowed. 6

7. Eliminate RET and increase incentive for claiming benefits at an earlier age reducing widow benefits. §Widows get husband’s benefit. §Widow’s limit establishes that the survivor cannot receive more dollars in monthly benefit than her deceased husband received. §Earlier SS take-up reduces husband’s benefit and subsequent widow benefit. 7