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CRR Releases Brief on the Effect of Cost-of-Living on Retirement
On December 6, 2022, the Center for Retirement Research at Boston College (CRR) released its brief, How Does Local Cost-of-Living Affect Retirement? According to the report, U.S. workers in high cost-of-living areas earn more than those with similar skills in low cost-of-living areas. In addition, CRR reported that compensation levels affect Social Security benefits that replace a smaller share of wages for higher compensation workers and do not account for prices in the local labor market.
The analysis also indicated that:
- Households in high-cost areas may save more, work longer or move to a low-cost area when they retire; and
- Social Security replacement rates are lower in high-cost areas, but the gap is relatively modest.
The brief is available here.