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Effect of lowering replacement rate

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How can lowering replacement rates or increasing the retirement age affect the Social Security tax rate?

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Solution Summary

Effects of lowering replacement rate or increasing retirement age on Social Security tax rate. Definition of terms and references included.

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First let's define the terms involved. The replacement rate is the ratio of benefits relative to pre-retirement earnings. So for example, if you made $80,000 before you retired and social security benefits are $20,000 a year, your replacement rate is 25%. The retirement age is the age at which you can retire with full ...

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