Economics of Macro Issues 7th Edition by Roger LeRoy Miller,Daniel Benjamin

Exercise 3

Analyze how each of the following hypothetical policy changes would affect people's decision to retire. Would the change induce people to retire sooner or later? Explain your reasoning.
a. An increase in the age at which one can receive full Social Security benefits (currently age sixty-six to sixty-seven, depending on the year in which a person was born)
b. A decrease in the fraction currently 75 percent) of full benefits that one can receive if retirement occurs at age sixty-two
c. An increase in the Medicare eligibility age from its current level of sixty-five.
d. An increase to 100 percent from its current 85 percent in the maximum fraction of Social Security benefits that is subject to the federal income tax