Abstract:

This chapter discusses how benefits vary with the age of retirement beyond the earliest eligibility age, including how retiring ahead of the normal retirement age reduces benefits by a certain percentage annually, particularly in the United States. It cites the need for a good and flexible retirement system to accommodate diversity in terms of life expectancy, income levels, and the degree of difficulty in continuing labor. It describes a pattern in the United States called delayed retirement credit (DRC), and actuarial reduction factor (ARF). It also argues that the system should be neutral in its approach to individual retirement decisions, assuming that the system would preserve optimal individual decisions on retirement.

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