ABSTRACT
The policies and practices based upon them have produced retirement income commitments and dependency costs that are posing a severe challenge to the nation's economy and political system. The approach of the retirement income advisory groups and policymakers often reflects too much confidence in questionable assumptions. From 1978 to 1981, the Carter administration seriously underestimated the size of the annual cost-of-living adjustments needed for Social Security retirees. Early retirements, greater life expectancy, and the growing demand for regular cost-of-living adjustments have added greatly to the problems of pension financing. The complexities and the uncertain impacts of tax increases have encouraged some analysts of the Social Security system to propose that more emphasis be placed on nontax approaches to slowing the growth of future Social Security commitments. Public pension systems have experienced many of the same problems faced by the Social Security and private pension systems.
