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Impact of Tax on Optimal Retirement Age

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Most Social Security recipients do not currently pay federal or state income takes on their benefits. Suppose the government proposes to tax these benefits at the same rate as other types of income. What is the impact of the proposed tax on the optimal retirement age?

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The solution discusses the impact of tax on optimal retirement age.

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Because taxation of benefits will essentially reduce them, many people may choose to work longer. This would increase the optimal retirement age. Because the amount of benefits increase the longer a person can delay retirement, they may need the additional ...

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