Changes in life expectancy (for some, but not all) may say a higher full retirement age under Social Security is justified, but it can’t be sold to the voters and any group that proposes it is simply shortsighted and stupid.
There are many ways to put Social Security on a solid financial path with modest changes over time. Why would politicians propose something they know is a hot button?
House Republicans last week proposed increasing the full retirement age (FRA) to collect Social Security to 69, in a controversial move that may come back to bite conservatives as Democrats look to gear up for the 2024 election.
The Republican Study Committee (RSC), which includes 176 out of the 222 Republican members in the House of Representatives, making it the largest group of House conservatives, proposed the change as part of a budget package that it says would limit $16.3 trillion in spending and $5.1 trillion in taxes in the next seven years.
This isn’t the first time the RSC has attempted to raise retirement ages for seniors. In 2022, the group made a proposal to raise the retirement age for Medicare from its current 65. While the proposal has since been dropped, the current blueprint includes a “premium support” plan that would support privatization of Medicare programs.
While the current FRA is 66, it gradually increases each month until it reaches age 67. The RSC proposal would include a slower change at four months a year, eventually reaching age 69 for those who turn 62 in 2033. The earliest full retirement age would remain at 62 but would include the lowest benefits.
401k specialistmag.com
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The more I see that Congress is going to do nothing to fix SS, I think that is the right thing to do. Since we know no one paid for their SS benefits, a 20% cut seems about right. The higher paid SS retiree will see a bigger dollar loss. But we can all live with the cut. Lower
Paid SS retiree with no other income can apply for welfare benefits.
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The idea of raising the FRA has been proposed more than once by different groups and isn’t apparently considered stupid by most who have suggested it. The idea of “modest change” by raising taxes will prove to be unpopular as well. All proposals to date have the effect of reducing benefits to the next generations whether by increasing FRA or raising the payroll tax.
The program faces more beneficiaries per worker and all attempts to keep it solvent are going to hurt.
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Actually, modest changes in taxes, possibly skewed a bit to employers, taxing pretax cafeteria benefits, applying the COLA differently to higher income beneficiaries. If all this is done over time, it won’t even be noticed. The problem is that raising FRA to reflect life expectancy changes does not affect all groups equally.
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I say leave the age at 67. I know that I would not have been able to stay in the job that I retired from at age 55 working until age 67. I would have been medical disqualified not to mention being out on disability twice during that time. I would have had to find a lower paying job to span those 12 years if I really need social security to retire on. I was lucky that I did not. Some people can sit at a desk for that long while other union trades destroy their bodies in exchange to make a living. Some just will not be able to physically work that long.
Another issue I have is the actuarial tables are changing. A male born in 1962 is expected to live until age 75.2. A male born in 1987 is expected to live until age 78.3. A male born today is only expected to live to age 73.5, the shortest life span. Now I realize that social security is not designed to give you decades of income, but what happens when people do not reach their retirement age? Will everybody start taking their money at age 62?
The tax side should be fixed first. Benefits have expanded and COLAs were added that were never really funded.
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“Among men born in 1960, those in the top income quintile could expect to live 12.7 years longer at age 50 than men in the bottom income quintile. “
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