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How Will Higher Taxes Affect the National Retirement Risk Index
Publication Date: December 2010
Publisher(s): Center for Retirement Research at Boston College
Author(s): Alicia H. Munnell; Anthony Webb; Francesca Golub-Sass
Series:
Topic: Economics (Consumers and consumption)
Economics (Economic conditions)
Keywords: savings and consumption
Type: Report
Coverage: United States
Abstract:
The National Retirement Risk Index (NRRI) measures the share of American households ‘at risk’ of being unable to maintain their pre-retirement standard of living in retirement. The calculations are based on the assumption that taxes remain at current levels. But federal government spending as a percentage of GDP is projected to increase rapidly in coming decades. To help bridge the gap between revenue and spending, policymakers could decide to substantially increase the personal income tax, raise Social Security payroll taxes, and establish additional revenue sources such as a value-added tax. This brief explores how such tax increases could affect the percentage of households ‘at risk.’