The social security piggy bank is running low, at least according to lawmakers who are looking for ways to shore up the program’s trust funds.
Once again, Congress is contemplating increasing the retirement age. This certainly isn’t the first time the governmental body has used this tactic to keep the books in balance (relatively speaking).
The most recent increase in the full retirement age occurred in 1983, when the age limit was increased from 65 to 67. Data from the Centers for Disease Control and Prevention show that between 1950 and 2016, the average life expectancy of 65 years of age rose by 5 1/2 years. According to experts, this rise puts further stress on an already strained system.
But is it time for another rise in the retirement age?
One argument in favor of raising the retirement age comes from Stephen C. Goss, the Chief Actuary of the Social Security Administration. Goss stated, “Increasing the retirement age to reflect increases in longevity is fair to all generations and is the most potent tool available for restoring Social Security solvency.” As people live longer, the length of time individuals receive Social Security benefits increases. Therefore, by raising the retirement age, money paid to beneficiaries would equal the expected payout which the program initially intended to pay.
On the other hand, it’s not the fault of retirees for living longer, nor that the government hasn’t properly factored in how advances in medicine may impact the program.
Alicia Munnell, the director of the Center for Retirement Research at Boston College, further explains the drawbacks of increasing the retirement age. “The argument against raising the retirement age is that it disproportionately affects lower-wage workers who have less education and are less healthy.” Simply put, raising the retirement age would require these individuals to work longer, which could be challenging due to physical limitations or health issues.
Raising the retirement age is not a new concept, and it has been done in the past. Arguments for increasing the retirement age are often seen by detractors as admission of the government’s lack of foresight. Whereas, those who oppose the increase have been accused of sabotaging Social Security for future generations.
Congress will ultimately decide whether to increase the retirement age once again. Whether you are for or against another change, make sure your voice is heard by contacting your representatives in Congress today.