Distributional Effects of Reducing the Social Security Benefit Formula

by Glenn R. Springstead
Policy Brief No. 2010-02 (released November 2010)
Table equivalent for Chart 2. Average percent benefit reduction under the Social Security Advisory Board PIA options and payable benefit levels
Year Three point Five point Upper Payable benefit
2025 -2.2 -3.7 -3.8 0
2026 -2.3 -3.8 -4.2 0
2027 -2.3 -3.9 -4.6 0
2028 -2.4 -4.0 -5.0 0
2029 -2.5 -4.1 -5.3 0
2030 -2.5 -4.2 -5.6 0
2031 -2.6 -4.3 -6.0 0
2032 -2.6 -4.4 -6.4 0
2033 -2.6 -4.4 -6.8 0
2034 -2.7 -4.5 -7.2 0
2035 -2.8 -4.6 -7.7 0
2036 -2.8 -4.7 -8.0 0
2037 -2.8 -4.7 -8.5 -16.9
2038 -2.9 -4.8 -9.0 -23.8
2039 -2.9 -4.8 -9.5 -23.6
2040 -2.9 -4.9 -9.9 -23.3
2041 -2.9 -4.9 -10.4 -23.1
2042 -3.0 -4.9 -10.8 -22.8
2043 -3.0 -4.9 -11.3 -22.6
2044 -3.0 -5.0 -11.8 -22.3
2045 -3.0 -5.0 -12.2 -22.1
2046 -3.0 -5.0 -12.6 -22.0
2047 -3.0 -5.0 -13.0 -21.8
2048 -3.0 -5.1 -13.4 -21.7
2049 -3.0 -5.0 -13.7 -21.6
2050 -3.0 -5.1 -14.1 -21.4
2051 -3.1 -5.1 -14.4 -21.4
2052 -3.0 -5.1 -14.7 -21.3
2053 -3.1 -5.1 -15.0 -21.3
2054 -3.1 -5.1 -15.2 -21.4
2055 -3.1 -5.1 -15.5 -21.4
2056 -3.1 -5.1 -15.7 -21.5
2057 -3.1 -5.1 -15.9 -21.6
2058 -3.1 -5.1 -16.1 -21.7
2059 -3.1 -5.1 -16.2 -21.8
2060 -3.1 -5.1 -16.4 -21.9
2061 -3.1 -5.1 -16.5 -22.0
2062 -3.1 -5.1 -16.6 -22.1
2063 -3.1 -5.1 -16.7 -22.2
2064 -3.1 -5.1 -16.8 -22.4
2065 -3.1 -5.1 -16.9 -22.5
2066 -3.1 -5.1 -17.0 -22.7
2067 -3.1 -5.1 -17.0 -22.8
2068 -3.1 -5.1 -17.1 -23.0
2069 -3.0 -5.1 -17.1 -23.2
2070 -3.1 -5.1 -17.2 -23.3
2071 -3.1 -5.1 -17.2 -23.5
2072 -3.1 -5.1 -17.2 -23.7
2073 -3.1 -5.1 -17.2 -23.9
2074 -3.1 -5.1 -17.3 -24.1
2075 -3.1 -5.1 -17.3 -24.3
2076 -3.1 -5.1 -17.3 -24.5
2077 -3.1 -5.1 -17.3 -24.7
2078 -3.1 -5.1 -17.3 -25.0
2079 -3.1 -5.1 -17.3 -25.2
 
Table equivalent for Chart 3. Percent of beneficiaries affected under PIA options by lifetime wage quintile in 2070 (compared to scheduled benefits)
Option Lifetime wage quintile
Lowest Second lowest Middle Second highest Highest
Three Point 100 100 100 100 100
Five Point 100 100 100 100 100
Upper 74 99 100 100 100
 
Table equivalent for Chart 4. Median percent benefit reduction under primary insurance amount options by lifetime wage quintile in 2070 (compared to scheduled benefits)
Option Lifetime wage quintile
Lowest Second lowest Middle Second highest Highest
Three Point -3.0 -3.0 -3.0 -3.0 -3.0
Five Point -5.0 -5.0 -5.0 -5.0 -5.0
Upper -5.0 -13.5 -17.6 -20.8 -22.8
 
Table equivalent for Chart 5. The number of aged in poverty would increase under each option (compared to scheduled benefits)
Year Option
Three point Five point Upper
2030 131,594 218,272 128,470
2050 195,476 315,164 368,661
2070 75,327 134,845 66,052