Should the Full Retirement Age be Raised to 70?
As lifespans increase and Social Security's finances shrink, some lawmakers have proposed raising the full retirement age to 70 in order to reduce Social Security costs over the near term. While this would help cover payments to the very elderly, it would also widen the financial gap for those claiming early. Despite the potential cost savings, the chances of such a measure making it through Congress are “very slim,” according to one expert.
The original retirement age of 65 was established in 1940, when Social Security first began paying monthly benefits.[0] In 1983, the age for receiving full benefits began to rise, and eventually reached 67. Lawmakers gradually increased the full retirement age, and those born in 1960 or later must wait until they turn 67 to collect their full benefits.
Discussions about increasing the retirement age usually center around when people should be entitled to receive their full benefits, but some plans suggest raising the age for early retirement and the age for eligibility for Medicare.[1] Doing so could wipe out about a third of the Social Security trust fund’s 75-year deficit, according to one expert.[1]
Americans are living longer, so it stands to reason that many will have to plan and save money for a longer retirement than ever.[2] The Social Security Administration recommends that people wait until age 70 to collect benefits, as doing so can result in a larger monthly payment.[1] However, waiting beyond that age will not further increase their monthly payments.[1]
It is predicted that the Social Security Old-Age and Survivors Insurance (OASI) Trust Fund will be depleted by as soon as 2032.[0] In the event that it occurs, Social Security will solely be supported by payroll taxes, yet this will only offer approximately 75% to 80% of existing benefits.[1]
The debate over Social Security and the full retirement age is likely to be a major issue in the 2024 presidential race.[0] For now, it’s important to remember to take care of your health and finances while you’re young, as it’ll be a lot harder to do as you get older.[2]
0. “Social Security: Though Recipients Live Longer, Raising Full Retirement Age Isn't the Simple Solution” Yahoo Life, 13 Mar. 2023, https://www.yahoo.com/lifestyle/social-security-though-recipients-live-111942782.html
1. “Here's why retirement age matters for Social Security and Medicare” CNN, 19 Mar. 2023, https://www.cnn.com/2023/03/19/politics/retirement-age-social-security-medicare/index.html
2. “Does Living Longer Mean Retiring Later?” The Motley Fool, 11 Mar. 2023, https://www.fool.com/the-ascent/buying-stocks/articles/does-living-longer-mean-retiring-later
