Explore the Costs and Benefits of Social Security Reforms
Policy Reforms

Changes to the Social Security benefit (PIA) formula by adjusting the replacement rates for different income brackets (based on AIME):

• P1.1 to P1.9 increase the first bracket replacement rate (applied to low earnings) from 0.91 to 0.99, in increments of 1 percentage point (pp).
  The first bracket replacement rate is fixed at 0.99 in P2 and P3 reforms.
  
  

• P2.0 to P2.9 increase the second bracket replacement rate (applied to middle earnings) from 0.32 to 0.352, in increments of 0.32 pp (representing 1% increases relative to the baseline value of 0.32).
  The second bracket replacement rate is fixed at 0.352 in P3 reform.
  
  

• P3.0 to P3.9 increase the third bracket replacement rate (applied to high earnings) from 0.15 to 0.165, in increments of 0.15 pp (1% increases relative to the baseline value of 0.15).

Level reforms L0-9 increase all PIA bracket proportionally by 1% at a time.

Increase the Normal Retirement Age (NRA) from 65 to 66, 67, and 68.

Increase the Delayed Retirement Credit (DRC) from 8% to 10%, in 0.5 pp steps.

Increase both the early claiming penalty and delayed retirement credit symmetrically from ±7% to ±15%, in 1 pp increments.

• Part A Expansion: Increases coverage by 20 pp for individuals aged 65 and older.
  
  

• Part B Expansion: Increases coverage by 20 pp for nonparticipants aged 65 and older.

Reduce marginal income tax rates after age 62 by 1 to 5%.

Increase the net return on savings by 0.2, 0.4, and 0.8 pp