TY  - JOUR
AU  - Bronshtein, Gila
AU  - Scott, Jason
AU  - Shoven, John B
AU  - Slavov, Sita N
TI  - The Power of Working Longer
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 24226
PY  - 2018
Y2  - January 2018
DO  - 10.3386/w24226
UR  - http://www.nber.org/papers/w24226
L1  - http://www.nber.org/papers/w24226.pdf
N1  - Author contact info:
Gila Bronshtein
Cornerstone Research
E-Mail: gilaw@stanford.edu

Jason Scott
J S Consulting
57 Fairview Plz
Los Gatos, CA 95030
E-Mail: jscott457@yahoo.com

John B. Shoven
Department of Economics
Stanford University
Landau Economics Building
579 Jane Stanford Way
Stanford, CA 94305
Tel: 650/723-3273
E-Mail: shoven@stanford.edu

Sita Slavov
Schar School of Policy and Government
George Mason University
3351 Fairfax Drive, MS 3B1
Arlington, VA 22201
Tel: 703/993-3171
E-Mail: sslavov@gmu.edu
M1  - published as Gila Bronshtein, Jason Scott, John B. Shoven, Sita Nataraj Slavov. "The Power of Working Longer," in Robert L. Clark and Joseph P. Newhouse, organizers, "Incentives and Limitations of Employment Policies on Retirement Transitions" Cambridge University Press, Journal of Pension Economics and Finance, vol. 18, special issue 4 (2019)

M2  - featured in NBER digest on 2018-04-30
AB  - This paper compares the relative strengths of working longer vs. saving more in terms of increasing a household’s affordable, sustainable standard of living in retirement. Both stylized households and actual households from the Health and Retirement Study are examined. We assume that workers commence Social Security benefits when they retire. The basic result is that delaying retirement by 3-6 months has the same impact on the retirement standard of living as saving an additional one-percentage point of labor earnings for 30 years. The relative power of saving more is even lower if the decision to increase saving is made later in the work life. For instance, increasing retirement saving by one percentage point ten years before retirement has the same impact on the sustainable retirement standard of living as working a single month longer. The calculations of the relative power of working longer and saving more are done for a wide range of realized rates of returns on saving, for households with different income levels, and for singles as well as married couples. The results are quite invariant to these circumstances.
ER  -