Report: Incentives Work; How to Keep Boomers on the Payrolls and Off Social Security

Thanks to Talking Retirement, we came across "Fed: Bonuses for Late Retirement Work".

Markets have an interesting way of solving problems and markets are driven by incentives. A problem that many (all?) western economies are facing is what to do about their aging populations. In the United States, 78 million baby boomers are about to start hitting the traditional retirement years. This is a double whammy. The economy loses a very skilled and possibly high earning individual who at the same time starts pulling down government benefits. A lot has been written about what to do with this and not surprisingly someone decided to see what happens if one applies incentives to the desired behavior.

To no economist's surprise, if workers are incentivized to work more years, many will.

"The results imply that policy initiatives can increase the share of older Americans who work, and more generally that older Americans respond to program incentives," Fed Economist Jonathan Pingle.

The article points out that this isn't a panacea for the underfunded Social Security but keeping productive workers in the workforce is a very positive step in that direction.