The more money you make before retirement, the more you may have to cut back when you do retire, a new study has found.
Because of Social Security benefits, some low-wage earners receive more income when they retire than they did when they were working. By contrast, many high-wage earners see their incomes reduced significantly in retirement, according to a report by the Employee Benefit Research Institute.
"Social Security replaces a higher proportion of low-wage earners’ income," the Washington group said Thursday in a news release. "When spousal benefits are taken into account, the total income after age 65 might exceed the pre-65 labor earnings of single-earning households. That is not generally the case for higher-income workers."
As a result, high-wage earners may have to curtail spending when they retire, when low-wage earners have more to spend. Of course, the high-income earners will still have more money to spend in retirement than low-wage earners.