Retire at Age 70? Young People May Have to Under Proposed Plans
Friday 09 July 2010
by: David Lightman | McClatchy Newspapers | Report
Washington - Young Americans might not get full Social Security retirement benefits until they reach age 70 if some trial balloons that prominent lawmakers of both parties are floating become law.
No one who's slated to receive benefits in the next decade or two is likely to be affected, but there's a gentle, growing and unusually bipartisan push to raise the retirement age for full Social Security benefits for people born in the 1960s and after.
The suggestions are being taken seriously after decades when they were politically impossible because officials — and, increasingly, their constituents — are confronting the inescapable challenge of the nation's enormous debt.
Social Security was created in 1935 with a retirement age of 65, but since then life expectancy at that age has increased by about six years, according to the National Center for Health Statistics.
Today the full Social Security benefit retirement age is 66 for people born from 1943 to 1954. It then increases by two months for each birth year (66 years and two months for those born in 1955, 66 and four months for those born in 1956 and so forth), until those born in 1960 or later get full benefits at age 67.
Raising the age eventually to 70 could prove to be politically acceptable because it wouldn't have an immediate social impact, but it would demonstrate that politicians are resolute enough to mend one of the government's most popular social programs and to tackle the national debt.
If they did, they'd have substantial academic backing.
"For awhile, there's been a consensus among economists that raising the retirement age makes a lot of sense," said Richard Johnson, a senior fellow and the director of the Retirement Policy Program at the Urban Institute, a Washington research group.
Still, there are potential downsides.
"There are some incredible ramifications to raising the age," said Barbara Kennelly, the president of the National Committee to Preserve Social Security and Medicare. "Not everyone can work until they're 70."
Despite such concerns, the trial balloons are firmly anchored.
Last month, House Majority Leader Steny Hoyer, D-Md., launched his in a major address to a Washington budget conference.
"We're lying to ourselves and our children if we say we can maintain our current levels of entitlement spending, defense spending and taxation without bankrupting our country," he said.
"We could and should consider a higher retirement age or one pegged to life span, more progressive Social Security and Medicare benefits, and a stronger safety net for the Americans who need it most."
Soon after, House of Representatives Republican leader John Boehner of Ohio told the Pittsburgh Tribune-Review that the age "eventually" could be raised to 70.
"Raising the retirement age — going out 20 years and not affecting anyone close to retirement, and eventually getting the retirement age to 70 — is a step that needs to be taken," he said.
"I think it's time we have an adult conversation about the problems facing this country," Boehner added later to Fox News. "Clearly, when it comes to Social Security, there's a problem. We made promises our kids and grandkids can't afford."
House Speaker Nancy Pelosi, D-Calif., wouldn't rule out the option.
Hoyer "made a very important statement about putting everything on the table," she said, "subjecting everything to scrutiny when it comes time to figuring out how we lower the deficit in a very transformational way."
Here's why it's being considered: The federal government faces a historic fiscal crisis. The nonpartisan Congressional Budget Office projects that publicly held debt could reach 62 percent of the gross domestic product by the end of this year, the highest since the Korean War year of 1952. By 2020, the CBO warns, the debt could hit nearly 90 percent of the GDP. History shows that when a nation's debt gets that high, it can cripple the economy.
Last week the CBO issued a report suggesting that some adjustments must be made to Social Security's financing. It projected that under the current rules, the system won't be able to pay scheduled benefits starting in 2039.
However, the CBO also found that raising the full retirement age to 68 starting with workers born after 1966, or to 70 for workers born after 1978, and raising it gradually before that wouldn't significantly improve the system's financial outlook.
The CBO said that raising the age to 68 would reduce Social Security spending by only 3 percent, or 0.2 percent of the GDP, in 2040. A retirement age of 70 would save 6 percent, or 0.4 percent of the GDP.
The lawmakers stress that raising the full-retirement age should be only one of a series of Social Security changes.
Their views represent a subtle but important shift. Traditionally, Social Security was considered "the third rail" of politics — touch it and you die — because people cherished their benefits so much.
That changed only once, in 1983, when a bipartisan Social Security commission's recommendations led to increases in payroll taxes and a gradual rise in the retirement age, putting the system on a path to solvency for decades.
In the years since, however, proposals for more changes have gone nowhere, but the debt threat is forcing another look.
A bipartisan national commission is weighing strategies to reduce the national debt, and the Washington buzz is that everything — even former untouchables such as higher taxes and cuts in Medicare and Social Security benefits _will be considered.
This week the International Monetary Fund urged the U.S. to cut future Social Security benefits, among other painful steps that it said were necessary to avoid unsustainable debt and an increased risk of global economic instability.
"If we could address Social Security reform," said Peter Peterson, the founder and chairman of a foundation that works for federal debt reduction, "it would provide a much-needed confidence builder with our valued foreign lenders ... so they don't lose faith that we can manage our own fiscal affairs."
Raising the retirement age for full eligibility would have two benefits, Gordon Mermin and Eugene Steuerle argued in a 2006 Urban Institute paper.
"In addition to helping Social Security," they wrote, "working longer would also improve individuals' own retirement finances by generating more retirement wealth and reducing the number of years their wealth needs to fund."
Raising it also could cause social hardship, however.
Maggie Mahar, a New York-based health researcher at the Century Foundation, argued that raising the retirement age would hurt the poor and manual laborers.
"We all know that the poor die sooner. Poverty is stressful," she said.
Mermin and Steuerle say it's not that simple.
Low-income workers, they said, are more likely to have disabilities and get government benefits. In addition, they said, while raising the retirement age could increase poverty rates, "combining the change with a minimum benefit could mitigate the impact on vulnerable groups."
Mahar countered, saying, "It's not that easy to get disability."
At least, she and others said, the debate has begun, and lawmakers are listening.
On The Web
Social Security retirement calculator
Treasury Department Q&A on debt
Peter Peterson remarks on the deficit
Congressional Budget Office long-term budget outlook
1983 Social Security commission recommendations
Official history of Social Security
National Committee to Preserve Social Security and Medicare website
Congressional Budget Office study on Social Security options
All republished content that appears on Truthout has been obtained by permission or license.



Comments
This forum is moderated by software. Please allow up to 15 minutes for your comments to go live and avoid posting the same comment multiple times.
How are we suggesting that
Sun, 07/11/2010 - 08:46 — Anonymous (not verified)How are we suggesting that the current system is still going to be around in 2039? Are you serious? By the time the ramifications of peak oil hit (10-15 years at best?), the whole big government paradigm will be shattered, and will have morphed into something entirely different.
Well, you know, We the
Sun, 07/11/2010 - 09:31 — Vic Anderson (not verified)Well, you know, We the People CAN Rule OUT Hoyer, Pelosi AND Boehner, first! They're retirement age is This YEAR!! Take NO Incumbents!!!
I've been willing to have my
Sun, 07/11/2010 - 10:08 — cabdriver (not verified)I've been willing to have my SS eligibility raised to 70 for years. I'm 54 now.
I simply think that it's a fair thing to do, to index Social Security benefits to increases in productive longevity. 65 used to be really old. Not so much, any more. Not if someone takes care of themselves.
I still want Medicare eligibility to be age 65. If not lower.
However, my support for raising the age of eligibility for Social Security is contingent on seeing a concomitant rise in tax rates on the top tier of American earners. All of the sacrifice can't come from my end of the economic scale.
Mostly, what I want to see is a solvent government. Social Security at 65 is going to be cold comfort is the country falls apart in the meantime.
I ran some numbers on the budgets of the George W. Bush years the other day:
the total amount of his budgets over 8 years was $20.4 trillion dollars.
the total amount added to the National Debt in additional debt: $4.9 trillion.
In other words, Bush put 24% of his budgets on the tab, for someone else to pick up.
That's a deficit financing rate worse than the most debt-strapped states of the Union. And Bush, the first MBA president, did that to the entire country.
While some 70-yr-olds are
Sun, 07/11/2010 - 10:49 — sharonsj (not verified)While some 70-yr-olds are very capable, a lot of them physically cannot hold a regular job. My friends and I are in our 60s, and we're falling apart now (most likely due to the crap we Americans call food). I doubt the current generation of overweight video gamers will last to 70 anyway.
We need some better suggestions from politicians who enjoy free quality benefits while the rest of us are going to pot.
Anyone can see that the
Sun, 07/11/2010 - 12:17 — cliff (not verified)Anyone can see that the government is in deep financial trouble, but why should fiscal reform begin with a program that is in surplus? This doesn't make sense to me. Fix the CAUSES of the problem!
At present, they need to
Sun, 07/11/2010 - 13:02 — Anonymous (not verified)At present, they need to LOWER the age of eligibility for SS benefits since the middle-aged are being pre-retired in higher-than-ever numbers and discriminated against in the current workforce.
But, what would be even more intelligent, but too beyond the ability of our crop of clowns in Washington, is what they are discussing in Europe: a Guaranteed Minimum Wage, and for all citizens. Which would fundamentally restructure our economy, and, also coupled with opening up an improved and expanded Medicare for all Americans.
This would make any form of welfare or social security and its administration obsolete and unnecessary.
Let's step into the future for a change. Rather than the past.
The right has been after
Sun, 07/11/2010 - 13:09 — Anonymous (not verified)The right has been after social security since the day it was passed in the 30's. How ironic that it took a DEMOCRATIC ADMINISTRATION to try and take it down. How is it that a former "organizer" used his presidential powers to form an appointed commission to look at the deficits we are faced with, and behind the scenes is being managed by the likes of Pete Peterson, a billionaire right wing Republican who has been attacking social security for years.
There is nothing wrong with social security -it has served millions of women, widows, children and disabled people for the last 75 years. We all paid into it during our working lives and it has saved many of us from being homeless, and yes DEAD! When are the American people going to rise up and protect their human rights,the right to a decent life and health care? How about looking at the increasing costs of our imperialistic wars before we start putting our working people on the streets? Social security did not cause the deficits - and all you need to do to secure it is to raise the cap on the rich and let them finally pay their fair share in keeping our country safe and secure and not with weapons of war but with compassion and care.
Retirement age should be
Sun, 07/11/2010 - 13:16 — Anonymous (not verified)Retirement age should be industry-specific. Me, writing/typing or sitting increative marketing conversations at an air cooled agency at 70 is a lot different than if I were standing all day as a clerk, driving dangerous heavy equipment, hammering on construction projects in the sun.
And of course, assumes physical and mental health, altho 40 and 50 and even 20 somethings can have health problems that seriously undermine work quality.
And if we geezers hang on, how do people in the middle get promotions... or college grads find entry jobs?
65 vs 70 may not make a big difference to society... but by holding my generation in employee positions, we may force young people to create entrepreneurial gigs online or in the street.
I could never vote for a
Sun, 07/11/2010 - 13:16 — whaler (not verified)I could never vote for a Republican, but I really couldn't vote for the Democrats anymore, either, and this is one of the reasons why.
To think about the health benefits these representatives get, the retirements, the salaries. Sickening.
The young, of course, have
Sun, 07/11/2010 - 13:22 — Lucy (not verified)The young, of course, have no conception as to what they're plotting for them, since they have no conception of a body doing as it will, even in spite of their best efforts. We age, things start to happen. You don't really fully comprehend until you go through it; or maybe you've had a parent who struggle with health issues related to aging and working or not working at the same time. Or just not finding work because they've crossed that invisible line.
And there's David Plouffe plotting out the reelection of shiny and glossy Barack Obama by appealing to first time voters who they are in the process of screwing.
Our government -- not really ours -- is a disgrace.
Tell them to get out of Afghanistan and to stop wasting money on politicians salaries and benefits.
@18:02 - Should read a
Sun, 07/11/2010 - 13:26 — Anonymous (not verified)@18:02 - Should read a Guaranteed Minimum Income, not wage. A key distinction.
When are we going to talk
Sun, 07/11/2010 - 13:35 — Aim (not verified)When are we going to talk about drastically CUTTING the MILITARY BUDGET instead of INCREASING it every year!!! No more cuts to anything until that is cut FIRST!!
Although I haven't studied
Sun, 07/11/2010 - 14:21 — Anonymous (not verified)Although I haven't studied Russian history much, it makes you understand better why they walked into the halls of their government, and said simply, "Gentlemen, the show is over." (Time for ALL of you to leave now, etc.)
First raise the age for
Sun, 07/11/2010 - 14:24 — Anonymous (not verified)First raise the age for Congress to collect their pensions to age 70! This will never happen.
The wealthy have looted the Social Security trust fund, and do not wish to pay higher taxes to repay the bonds. Also, they wish to continue to collect payroll taxes from the working class in order to fund other government programs, such as our wars without end.
Clearly, the top limit for
Sun, 07/11/2010 - 14:40 — Anonymous (not verified)Clearly, the top limit for paying into the Soc Sec fund should have been pegged to the cost of living. But that would have just given the government more money to "borrow" to finance things like war. Still, although the SS fund itself is in great shape, it's under permanent attack, as is every savings account in a spoiled-brat society.
Time to reduce the work week and go to a guarenteed minimum income.
The article states that
Sun, 07/11/2010 - 15:50 — Anonymous (not verified)The article states that Hoyer talked about putting everything on the table. Everything that is except for investigating our Government for stealing and spending the Social Security surplus for decades. Everything except for raising the Social Security tax limit to include those that make over $109,000 a year so that they pay the same percentage in Social Security as everyone who makes less than that. Everything except for lowering the cost of our way overbloated defense budget. Everything except for eliminating earmarks that serve mostly to help get incumbents re-elected. Everything except reigning in the cost of medical care by allowing individuals to import their prescriptions from Canada and other safe foreign countries. Everything except increasing the tax base by finally doing something about illegal immigration with the illegals many times being paid in cash on which no taxes are paid. Yup, everything is on the table as long as it only includes lowering benefits and raising the retirement age for those American workers who are forced to pay into the program all their lives.
Anonymous at 19:21, I have
Sun, 07/11/2010 - 17:07 — Anonymous (not verified)Anonymous at 19:21, I have studied Russian history and that's not exactly how it happened but your point is quite valid.
It is true that all our
Sun, 07/11/2010 - 17:38 — Anonymous (not verified)It is true that all our government spending is not sustainable, but it is not realistic to expect that everyone born after 1960 can work until they are 70. A much more realistic place to cut is the military spending which now accounts for almost 60% of the budget and is increasingly supporting private corporate interests.
Whenever I hear about this
Sun, 07/11/2010 - 17:40 — garbl (not verified)Whenever I hear about this idea for saving Social Security, I can't help but wonder at least these two things (that I'm sure will offend some people): First, I'm not convinced that just because medicine now can keep us alive longer that our lives are all that enjoyable during those extra years. Second, this may sound l...ike age discrimination, but I also am not certain that forcing people (years from now) to keep working until they're 70 will be all that beneficial to the employees, employers and customers.
Two things -- the premise
Sun, 07/11/2010 - 18:31 — Anonymous (not verified)Two things -- the premise that Social Security is "in trouble" is bogus. As presently set up, it is sound until 2040. But "if not", an easy fix is to "raise the cap" at which FICA contributions are levied, presently set at $107,000 -- what's sacrosanct about those people who are earning more, PAYING MORE?
Another issue is -- where will the jobs for all the people forced to work until "age 70" come from? Does it mean that young people will be denied entry in the work force? The notion that longevity implies more work years of WORK is a philosophical question that cries out for a national dialogue, not FIAT.
Either scenario are neo-con fantasies that will be blown to pieces when the media start reporting things as they are, in truth, not as they are told to report, based on fantasy.
Social Security, as long as contributions are made by current workers, will be there when those workers retire. Ad infinitum ...
Repeat after me: "The
Sun, 07/11/2010 - 20:03 — Anonymous (not verified)Repeat after me: "The Social Security program is not affecting the deficit!" The program is actuarially separate from the US federal budget, collects its own revenues, and is doing just fine. As many readers above have noted, if elites are that worried about what happens after 2040 (as if!), minor adjustments can be made to fix that.
The vast majority of our *present* deficit is caused by two things: The skyrocketing military budget, and the tax cuts for the rich enacted by Bush. The vast majority of *future* deficits are projected to come from unchecked increases in health care costs, which could have been addressed by a single-payer type system in the US (which was taken off the table early on in the recent health care "reform" by Rahm Emmanuel in a deal to buy off the health care industry).
What we're seeing now is just a another transparent attempt to use the economic crisis to advance the agenda of the rich, this time dismantling the pensions of the "lesser people" as Senator Alan Simpson called us.
Age discrimination is huge
Sun, 07/11/2010 - 20:31 — Anonymous (not verified)Age discrimination is huge right now, yet no one goes after employers. From the time you're in your 40's, unless you're a grey-templed CEO, you are not respected and not hired. So this is a non-starter as long as there is age discrimination.
22:07, Apart from the long
Sun, 07/11/2010 - 21:22 — Anonymous (not verified)22:07, Apart from the long Civil War that followed, that is.
Anonymous @ 19:21
Gee Thanks Baby Boomers. You
Sun, 07/11/2010 - 22:35 — Anonymous (not verified)Gee Thanks Baby Boomers.
You guys sure have left us in a mess!
They need to raise the cap.
Mon, 07/12/2010 - 01:45 — 107k Has Got To GO (not verified)They need to raise the cap. Why should people be allowed to pay NO social security tax after 107k?? It makes no sense at all. They need to be richer? They're more important?? Or they just have more power so the rich live longer and better and the poor die younger. This is such a blatant disregard of equality that it makes me sick. Unfortunately not sick enough to qualify for disability. This is a false issue aimed at protecting the rich once more. What a surprise. I'm getting mightily sick of the disparity in this country. What ever happened to those things called liberty and justice and oh yeah, equality?
to Anonymous 23:31 and 1:03.
Mon, 07/12/2010 - 02:48 — Anonymous (not verified)to Anonymous 23:31 and 1:03. You are correct in saying that Social Security at this point in time does not contribute significantly to the deficit. It is incorrect though that the Social Security system is solvent until 2040. It would be but the Government has "borrowed" the trust fund surplus every year and spent it replacing the cash generated with U.S. treasury notes that are IOU's from the Government, a promise to pay. As of this year the Social Security surpluses are gone and Social Security will take in less money than it pays out. That means that the Government will have to borrow to make up the difference and start paying the fund the money it owes which with all the other deficit spending it cannot afford to do on a sustainable basis. That is why the Government is crying about the need to raise the age of retirement and lower benefits. They stole the money and now can't pay it back.
It should be pointed out the
Mon, 07/12/2010 - 08:51 — Robert Murtha (not verified)It should be pointed out the the effective age for the "full" Social Security check is already 70. The amount of your check is increased for every year you wait after 62 to collect until you turn 70.
I really hope the American
Mon, 07/12/2010 - 10:53 — Chad Salamon (not verified)I really hope the American people see through the "social security is broken" nonsense. Raising the retirement age is nothing but a stab in the back to today's young and middle aged. The whole concept of social security is based on the n0tion of a social contract. We help out today's elderly, so that the youth of the future will help us out when we become elderly. To say to the youth and middle aged of today that you will continue to help out your elderly, but not get the help you gave out in return should be seen as a breach of contract.
Furthermore as other commenter have said, Social Security isn't broken. It's still running a surplus and even after 2039 it will be able to pay out 70-80% of benefits. Also does anyone notice that the year that Social Security is supposed to "go bankrupt" (which really means that it no longer has a surplus but can still pay out most benefits based on current social security taxes) keeps changing? I've read older reports that put the year at around 2017. This sounds like a scam.
Oh that's because it is a scam. Republicans have been trying to take down social security for years. A major part of their plan is to rack up deficits to force a Democratic administration to do the dirty work. If Democrats fall for this they are idiots (I wouldn't be surprised though).
We all need to keep saying until we're blue in the face that our deficit = our military. Until we tackle our wasteful military spending we will not be able to solve our deficit crisis. If we fail to do so we will go the way of the Soviet Union, who used their military to spend their way into insolvency and their collapse.
OK if the Congress feels
Mon, 07/12/2010 - 12:05 — Bloomy (not verified)OK if the Congress feels this way, then I suggest that their retirement benefits also begin at 70. Members of Congress are eligible for a pensionat age 62 if they have completed at least five years of service. Members of Congress and other federal employees were instead covered by a separate pension plan called the Civil Service Retirement System since 1983. Members covered by CSRS Offset
pay 1.8% of the first $97,500 of salary. While we, covered by Social Security for the same amount pay 6.2% and the employer pays 6.2%. This would be unacceptable to Congress but in their infinite wisdom Congress wants middle class citizens to pay and pay. Suggest instead remove the $107,00 ceiling and have the rich also fund SS.
What makes raising the
Mon, 07/12/2010 - 12:55 — Anonymous (not verified)What makes raising the retirement age to 70 so laughable is that there are no jobs! Maybe part of these people's fantasy can be creating some scenarios visualizing the jobs we'll be hired for when we're in our sixties. I don't even get responses to my resume and I'm only in my fifties. Can they get any commitments from businesses that they'll hire 60 somethings? And as someone else pointed out, does that mean young people won't get those jobs? It's ridiculous to talk about a longer life span as normal these days when everything is falling apart. And it's ridiculous to think cutting Social Security will fix our deficit.
First of all, cut military
Mon, 07/12/2010 - 13:17 — Patriot (not verified)First of all, cut military spending by 99 %. That still leaves plenty of money to expand our American empire and steal other countries' natural resources. With the money saved we can repair America and help our own people.
Second, put ALL politicians on minimum wage with NO health insurance or other benefits so they can relate to their constituents. It is called empathy.
Third make the rich pay their share of taxes for a change.
Fourth stop funding millions and millions of dollars to so-called "non-profit" feminist groups whose directors live in million dollar homes and their anti-male vitrol.
18:17, with the exception of
Mon, 07/12/2010 - 20:27 — Anonymous (not verified)18:17, with the exception of #4 (I don't know what you're referencing there), excellent points. I agree with 1-3 completely. It's common sense, and the fact that we don't shows how much our government does not represent the people. I'll also add that we need to open up an improved and expanded Medicare for the country, and institute a guaranteed minimum income (not meaning "wage"), regardless of age. We should abolish the death penalty, legalize, regulate, and tax marijuana like alcohol, release all the people we spend 30-80,000 dollars per year incaracerating if they're not there for violent offenses, institute revolutionary change to campaign financing, and throw more than half of Congress in prison.
It has been my thought for
Tue, 07/13/2010 - 14:50 — John Albertini (not verified)It has been my thought for several years that one way to secure SS & Medicare for future generations was to gradually increase the full retirement benefit age.
This was done in the 1980s to/for my generation. I, born 1954, can't get full benefits until age 66, not 65 as those older than me can.
The younger folks can expect to live longer so they should expect to work at least some of that longer life expectancy before being entitled to benefits.
I do not find that premise unfair, but most reasonable.
I took Social Security at
Tue, 07/20/2010 - 10:37 — Anonymous (not verified)I took Social Security at 62, but not because I wanted to. There was no pension plan at my company, and I would gladly have worked until 70 had I not been forced out by owners who wanted to hire someone younger to do the job cheaper, but from what I've seen, not do it as well.