Social Security Rates of Return with "Progressive Indexation"

Publication Date: May 2005

Publisher: Center for Economic and Policy Research

Author(s): Dean Baker; David Rosnick

Research Area: Government

Keywords: Retirement benefits; Privatized systems; Wage index

Type: Report

Coverage: United States

Abstract:

This paper calculated rates of return for wage earners corresponding to Social Security Administration's definition of low-, medium-, high- and maximum-earners. It finds that the "progressive indexation" proposal endorsed by President Bush would reduce the rate of returns that most workers would receive from Social Security, even with private accounts.