This grant supports the planning of a project led by Richard Johnson and Eugene Steuerle of the Urban Institute to identify, simulate, and evaluate policy reforms that, taken alone, as well as simultaneously, would reduce work disincentives at older ages and more equitably and efficiently provide retirement benefits to older adults. In so doing, this larger project would provide important new information about the likely costs and benefits of reforming Social Security, Medicare, employer-sponsored retirement plans, and tax incentives for retirement saving.
The larger project will use DYNASIM, the Urban Institute’s dynamic microsimulation model, to simulate the likely impact of potential retirement program reforms across a vast array of dimensions, including effects on employment at older ages; on older adults’ household wealth; on annual income; on lifetime Social Security benefits; on income tax payments; and on out-of-pocket spending on medical care. The team will also model the effects of hypothetical reforms on government revenues and outlays. The planning activities funded by this grant will lay the groundwork for the larger project by implementing necessary enhancements to DYNASIM, specifying criteria for evaluating policy reforms, and making the case for the need to reform retirement programs to eliminate work disincentives.