It’s looking as though the push to increase the Social Security Retirement Age to 70 is gaining some traction. With all the other news items of late, this initiative has drawn scant attention. However, for anyone following the solvency (or lack thereof) of the Social Security system, it’s been evident for decades now that something needs to be done. It’s not like one day, poof!, the fund will be empty. But over the next several years, various pre-emptive efforts are going to be needed to maintain the fund, else it becomes just another unfunded liability for the US, which is already Trillions of dollars in debt.
Social Security History
Back in 1935 when Social Security was formed, the retirement age was set at 65 years old, meaning Americans could start receiving their full benefits at that age. Note however, that at that time, the life expectancy for an American was dramatically lower. This is key because the much higher life expectancy we enjoy today could never have been envisioned when the fund was formed. Currently, there’s a slightly complicated formula for determining full benefits depending on the year you were born such that full benefits accrue between the ages of 65-67.
Social Security Retirement Age Increasing to 70
Now, politicians on both sides of the aisle are pursuing an increase to age 70 for younger Americans. Take heed, Americans set to retire in the next few years, even next 2 decades perhaps would be unlikely to be affected. First off, they would not have ample time to plan and adjust to this change in retirement expectations (so they say), and of course, they comprise a significant voting block, so it would be politically unpopular to do so. However, it would be much more palatable to increase the retirement age for 20 and 30-somethings, right? First off, most people in that demographic either don’t even think about Social Security at all, or the cynics say they’ll never see a dime of it anyway. So, to guarantee that there will be a benefit at age 70 beats nothing at all to the younger crowd. As such, it’s entirely plausible this initiative would pass muster with constituents in order to keep the fund solvent. This could actually be considered one of the US Austerity measures that we’ll inevitably be forced to swallow in the coming years much like what the EU has already committed to.
Fairness Considerations
While younger people may balk at an increase, the truth is, we ARE living longer. And this fund wasn’t really meant to be a “retirement nest egg” but an emergency fund for the elderly who perhaps grew ill, didn’t have pensions and retirement funds, etc and who can just count on an inheritance? For the well-off or those who work well into their 60’s, considering the paltry payout to begin with, it probably shouldn’t be viewed as a sea change in retirement standard of living for a young American who plays their cards right during a lifetime. Granted, we’ve payed into the system for so many years and our parents’ generation will receive more generous benefits than we will, but this is reality. America is spending more than we’re making and our burn rate is such that it is clearly unsustainable. Perhaps it’s not fair, but given 20-30 years notice, perhaps it’s more fair than the tax hikes and redistribution of wealth that’s happening all within the first two years of the current administration. If we’re looking to curtail further tax hikes at the federal level (state tax hikes are inevitable virtually everywhere), something’s gotta give. The CBO projects that by 2020, our debt to GDP ratio will hit an astounding 90% of GDP which is detrimental to everything from our interest rates (with mortgage rates currently at an all-time low) to a collapse of the US Dollar as the world’s reserve currency to our standard of living. While I’m not a huge fan of shifting out benefits to those paying in now, I view it as something that pretty much “has to” and ultimately, will, happen.
What are Your Thoughts on Social Security?
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Social Security has to be tweaked or it will run out of money. Raising the full retirement age for those who will retire 20 or 30 years from now is a reasonable start, but certainly not enough of a change to keep SS solvent. I currently draw Social Security, but I advise my children (all four in their thirties) to live like there will be no SS benefit for them. Better safe than sorry.
Social security was proposed for retirement benefits and that alone. The open back doors that have been initiated for other programs is what is depleting the money. Stop allowing the government to get their hands on the so called special programs is the answer. We need to get rid of the politicians and get some Americans in the office. Our government has sold us out.
Sure, screw anyone who’s less than 35 years old. Why not? That’s how modern America works, right?
Raise the retirement age for 20 somethings, but not everyone else. Prop up the price of houses so when 20 somethings go to buy their first house they have to give twice the fair market value of the house to the older person their buying it off of. Tax the high-tech income of 20 somethings in order to prop up dying old companies like GM, filled with white-haired Americans. Require 20 somethings, who will likely will go 5 or 10 years without seeing a doctor, to purchase health insurance so that older people’s health-care premiums will go down. Get rid of apprentice and corporate training programs and just require young people to take out massive, life-debilitating loans in order to get the training required to work in 90% of American careers. Increase the loans we give to 20 somethings in order to get educated so that we can raise tuition rates in order to pay older professors higher salaries. Make up all kinds of licensing schemes for established professions making entry into new fields more difficult for people who are starting out, never mind the people already in the profession today never had to jump through such hoops. Require bachelors degrees for professions that have never historically required them so that we can give some more old professors some easy, high-paying jobs. Get rid of pension benefits for new employees. And let’s rack up the national debt, why not? It’s the 35 and under crowd who are going to have to pay it back, the 45+ plus people will be fine. Oh! And how DARE you suggest tweaking social security or medicare in order to make the national budget realistic, those old geezers EARNED those entitlements! Oh, and let’s make special tax credits for poor elderly people, but forget the poor 19 year old, he can fend for himself even though he hasn’t had a lifetime to prepare like the 65+ year old has.
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