JTF#14  

Introduction

A potential component of the administration’s Social Security proposal is to shift from “wage indexing” of benefits to “price indexing.” This change sounds modest, but, in fact, would change the nature of the Social Security program. Price indexing would preserve the purchasing power of Social Security benefits, but these benefits would represent an ever-declining percentage of earnings before retirement...

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Alicia H. Munnell is the director of the Center for Retirement Research at Boston College (CRR) and the Peter F. Drucker Professor of Management Sciences at Boston College’s Carroll School of Management. Mauricio Soto is a graduate student in economics at Boston College.