THE USE OF CENSUS DATA IN ESTIMATING COSTS
The cost of an old-age pension will depend basically upon four factors: (1) the age at which retirement is permitted; (2) the number of persons at or above the retirement age; (3) the percentage of the persons above the retirement age who will elect to retire; and (4) the amount of the pension allowed. The amount of pension allowed and the percentage of persons who will elect to retire are related in that the higher the benefits the greater the inducement to retire.
The table below shows the number of persons reported in the 1940 census at or above five different age levels from 75 and over down to and including 55 and over. The costs of pensions of five different amounts per annum are shown for each age at retirement upon the assumption of 100 per cent retirement.
|75 years or over.||2,643||264||793||1,322||1,850||2,379|
|70 years or over.||5,213||521||1,564||2,607||3,649||4,692|
|65 years or over.||9,019||902||2,706||4,510||6,313||8,117|
|60 years or over.||13,748||1,375||4,124||6,874||9,624||12,373|
|55 years or over.||19,592||1,959||5,878||9,796||13,714||17,633|
From this table it will be noted, that on the assumption of complete retirement a pension of $300 a year would in 1940 have cost 2.7 billion dollars with retirement at 65 years of age, 4.1 billions at age 60, and almost 6.0 billions with age 55. A retirement age of 60 would add roughly 50 per cent to cost as compared with age 65; and one at age 55 would substantially more than double the cost.
In discussing the cost of provision for old age we decided not to go below age 65. This decision meant that in a universal, comprehensive system provision through other benefits would have to be made for persons under 65 who were incapable of self-support, and for widowed, divorced, or separated women whose family responsibilities precluded