Thursday, March 31, 2011

Raise Social Security retirement age? Not so fast -- March 31, 2011 column


It sounded like a no-brainer. Social Security is facing insolvency, and Americans are living longer in retirement than expected. Why not raise the Social Security retirement age a couple of years?

The presidential deficit commission chaired by Erskine Bowles and Alan Simpson last year recommended inching up the full retirement age to 69 from 67 by 2075. The so-called gang of six on Capitol Hill, the bipartisan group of senators that’s trying to break the federal budget impasse, may make the recommendation soon as part of a package of longer-term deficit reforms.

To be sure, the retirement age increase is modest and it would happen in the distant future. The workers that would be affected are today’s 5-year-olds.

And yet, raising the Social Security retirement age has become a flash point in the entitlement debate. The idea has encountered heavy resistance from Social Security watchdog groups that say raising the age is a cut in benefits, regardless of when people retire, and that it’s particularly unfair to minorities and low-income workers.

President Obama and Democratic congressional leaders say they won’t go along with any benefit cuts. A “Hands Off Social Security” rally on Capitol Hill this week drew more than 250 protesters. Senate Majority Leader Harry Reid, D-Nev., told them there’s no need to tamper with Social Security at all now. Social Security won’t go broke until 2037.

“Let’s worry about Social Security when it’s a problem,” Reid said. “It’s not a problem now.”

Strengthen Social Security, a coalition of more than 270 consumer groups, says the retirement age change “would be a benefit cut that places the greatest hardship on older Americans who are in physically demanding jobs or are otherwise unable to find or keep employment.”

The Bowles-Simpson commission envisioned a “hardship provision” for workers who physically could not work beyond 62. It’s difficult to imagine, though, how anyone could assure future workers in their mid-60s and older that they’ll be able to hold onto jobs.

Unemployment for workers 55 and older more than doubled during the recent recession, and Labor Department officials say it takes unemployed older workers far longer to find new jobs than younger ones. Complaints of age discrimination in the workplace have soared at the U.S. Equal Employment Opportunity Commission.

Chris Weller of the Center for American Progress, a liberal group, has found that lower-income workers don’t live as long as higher income workers, and minorities don’t live as long as whites.

The government has been fiddling with the retirement age since Social Security sent the first monthly check in 1940. The original retirement age was 65 but a few years later women were allowed to retire early at 62, and then men also got the early retirement option.

The current full retirement age for people born between 1943 and 1954 is 66. People born in 1955 will have to work a couple of month past their 66th birthday to collect full benefits. The retirement age then creeps up until those who were born in 1960 and later must wait until they’re 67 to get a full Social Security check.

Workers who retire early at 62, as most do, receive reduced benefits for life. The National Commission to Preserve Social Security says that when the full retirement age was 65, workers who retired at 62 received 20 percent less than the full amount, and when the retirement age reaches 67, workers who retire at 62 will receive 30 percent less than if they had waited.

The number of years a person could be expected to receive full Social Security benefits has increased -- but perhaps not as much as you might think. Life expectancy for a man who reached 65 in 2010 is only five years more than in 1940, according to the Social Security Administration. Still, Congress and the White House will have to deal eventually with the solvency issue, as the ratio of workers to beneficiaries keeps dropping.

While a hike in the retirement is far from a no brainer, it’s also too soon to count it out.

People strongly oppose cutting Social Security benefits outright, polls show, but they’re split about the retirement age. An NBC News-Wall Street Journal survey in February found 51 percent found raising the retirement age to 69 in 2075 totally or mostly acceptable.

© 2011 Marsha Mercer. All rights reserved.


  1. Now that people are living longer, it seems reasonable to raise the retirement age to 69, however, more and more seniors are finding difficult to keep working after age 60. As Ms. Mercer points out in her interesting and informative column this week, no one can guarantee that seniors will be able to keep their jobs between the ages of 62 and 69. It will be difficult for those who are without work, age 65, and unable to retire. A most unpleasant situation, indeed.

    Ms. Mercer has again identiiied a timely and important issue and treats it in a thoughtful and knowledgeable way. How does she do it week after week? High intelligence and hardwork is the answer. Nice going Ms. Mercer.

  2. We fully endorse the comments of cmcrva3, particularly as they apply to the high quality of Ms. Mercer's work. As usual, Ms. Mercer is right on-the- mark with her analysis, this week. Bravo.