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Objectives: Increasing socioeconomic disparities, including in life expectancy, have important implications for the U.S. Social Security program. This study examined inter- and intracohort trends in Social Security retirement benefits, paying special attention to how lifetime benefit trajectories by socioeconomic circumstance shift across cohorts encompassing current and future retirees., Methods: Using a dynamic microsimulation model based on representative survey data linked to administrative records, we developed a set of cohort-specific projections that estimate monthly and lifetime Social Security retirement benefits for retirees spanning the early baby boom (1945-1954) to Generation X (1965-1974) cohorts., Results: We found a widening socioeconomic gap in projected monthly and lifetime benefits for men and women, especially on a lifetime basis. This divergence is associated with stagnation of benefit levels among lower socioeconomic status groups coupled with upward shifts among higher strata groups. Distributional changes are linked with increasing differential mortality, but other factors also likely play a role such as rising education premiums, growing earnings inequality, and changes in women's work and relationship histories., Discussion: Widening mortality differentials can lead to distributional changes in the U.S. Social Security program. Microsimulation methodology lends insights into how the socioeconomic gap in monthly and lifetime benefit distributions may change among future older Americans in the context of differential mortality and other demographic changes. Moving forward in time, these complex patterns could offset some of the progressivity built into the system., (© The Author(s) 2021. Published by Oxford University Press on behalf of The Gerontological Society of America. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com.)

We consider the distributional implications of Social Security policy changes in the context of increases in life expectancy and differential mortality. Using a robust microsimulation model, we examine how several options for raising the retirement age, including a scenario that applies a mortality adjustment in combination with such policies, affect different types of individuals and households. Policy changes are simulated for Social Security beneficiaries in 2030 using the Modeling Income in the Near Term (MINT) microsimulation model. The analysis shows that increasing either the age at which individuals receive their full retirement benefit alone or the early eligibility and full retirement ages together result in across-the-board reductions in benefit levels. The policies are projected to result in slightly higher poverty, but the expected rise is sharper among groups known to experience higher rates of mortality, as well as many disadvantaged groups. Analysis of a hypothetical adjustment to offset the historical impacts of differential mortality by lifetime earnings on lifetime benefit receipt, when combined with these retirement age increases, shows varied results. While some groups of individuals experience sharper reductions in median monthly benefits, the adjustment has an offsetting and protective effect for the benefits of disadvantaged groups when combined with options that would raise the retirement age. This combined package of policies, as well as simulations that incorporate a behavioral adjustment in benefit claiming ages, result in an increase of less than one percentage point in the average poverty rate.

Purpose: As part of an ongoing effort to analyze the distributional implications of potential policy reforms to the U.S. Social Security system, we consider the widely discussed reform of earnings sharing. Such an approach has been viewed as a way to "update" Social Security's family benefits based on marital status and as a means to make the system more marriage neutral., Design and Methods: We use the Social Security Administration's Modeling Income in the Near Term model to simulate the distributional effects of two earnings sharing alternatives, a basic option and a modified inheritance option, on the projected retiree population in 2030. We focus our analysis on uncovering how different subgroups of women would be affected under the alternative system., Results: Widows and surviving divorced women, particularly those in lower socioeconomic groups, would face some of the steepest benefit decreases. Adding an inheritance provision would mitigate reductions across the board; however, it may not provide as much benefit adequacy to widows as might be expected., Implication: Certain groups of women would fare far better under the current Social Security system than under earnings sharing. Linking benefits with earnings sharing would be particularly problematic for lower income widows and single-earner married couples. Never-married persons are unaffected.

Changes in American family and work patterns over the past decades have prompted various policy proposals for changing the structure of Social Security benefits. In this article, we use the Social Security Administration's Modeling Income in the Near Term (MINT) microsimulation model to project how Social Security benefit amounts would change in response to incorporating earnings sharing into benefit calculations for the population aged 62 or older in 2030 under three hypothetical policy scenarios. The earnings sharing scenarios modeled in the article would reduce benefits for the majority of individuals, although there are important differences among married, divorced, and widowed individuals. Some groups of men and women would experience increases in Social Security benefits, while some would receive reduced benefits in comparison to current law, particularly widowed individuals. Allowing widows to inherit the earnings records of their deceased husbands would improve their outcomes.