Should the Retirement Age Be Raised?

Social Security’s retirement age should not be increased for anyone on the verge of retirement, but there’s a good case for doing so over coming decades, as the Baby Boomers retire and the population ages.

In 1950, the average retiree claimed Social Security benefits at age 68.5 and lived to around 76. Today, a typical retiree claims benefits at 63 and will live an additional two decades. Americans today live almost one-third of their adult lives in retirement, supported by an increasing tax burden on their kids and grandkids. This isn’t simply unfair to future generations. It is also a waste of human talent.

Are there some people who can’t work longer? Of course. And for them, early retirement or disability benefits remain an option. But it would be strange in today’s service economy if Americans, who work mostly in offices, could not work as long as prior generations who toiled in mines, mills and farms.

Indeed, our longer lives are also healthier lives. According to the National Center for Health Statistics, among individuals ages 65-74 the share describing themselves as in fair or poor health dropped from 25.1 percent in 1983 to 18.5 percent in 2007. Overall, 75 percent of individuals over 65 report being in good, very good or excellent health.

It’s easy to scare people--for instance, President Obama’s Commission on Fiscal Responsibility and Reform would increase the retirement age to 69. But this would apply only to people who haven’t even been born yet and at retirement would live on average to age 88--almost 10 years longer than they did when Social Security started in the 1930s.

It is true that life expectancies have risen faster for high earners than for low-income Americans. This is why almost every reform plan that raises the retirement age also makes Social Security more progressive, by boosting benefits for low earners while trimming them for the rich.

One option is to let the retirement age rise to 67 as scheduled, then increase it in future years as life spans rise. If life expectancies increase quickly, then the retirement age will follow; if life spans stay constant, the retirement age won’t need to increase further. By itself, this would fix nearly one-quarter of Social Security’s deficit.

Mathematically, we can’t fix the entire entitlement deficit by raising taxes. And Medicare is far more likely to require tax increases than Social Security. So it only makes sense to reduce costs where we can. Increasing the retirement age is a reasonable response to longer lives.

Andrew Biggs is a resident scholar at AEI.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Andrew G.
Biggs

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 20
    MON
  • 21
    TUE
  • 22
    WED
  • 23
    THU
  • 24
    FRI
Monday, October 20, 2014 | 2:00 p.m. – 3:30 p.m.
Warfare beneath the waves: The undersea domain in Asia

We welcome you to join us for a panel discussion of the undersea military competition occurring in Asia and what it means for the United States and its allies.

Tuesday, October 21, 2014 | 8:30 a.m. – 10:00 a.m.
AEI Election Watch 2014: What will happen and why it matters

AEI’s Election Watch is back! Please join us for two sessions of the longest-running election program in Washington, DC. 

Wednesday, October 22, 2014 | 1:00 p.m. – 2:30 p.m.
What now for the Common Core?

We welcome you to join us at AEI for a discussion of what’s next for the Common Core.

Event Registration is Closed
Thursday, October 23, 2014 | 10:00 a.m. – 11:00 a.m.
Brazil’s presidential election: Real challenges, real choices

Please join AEI for a discussion examining each candidate’s platform and prospects for victory and the impact that a possible shift toward free-market policies in Brazil might have on South America as a whole.

Event Registration is Closed
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.