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How Raising the Retirement Age Could Help or Hurt Seniors


In this issue of our monthly newsletter, we’re taking a deep dive into an issue that’s been at the forefront of policy debates: raising the retirement age for Social Security. With longer lifespans and an aging population, it’s crucial to consider how changes to the retirement age could impact the well-being of seniors across the nation.

The Challenge Facing Social Security

Social Security remains a fundamental pillar for retirees, often serving as a major or sole source of income after leaving the workforce. However, this vital program is on course to confront a significant funding shortfall, which has led policymakers and experts to explore various solutions, one of which is raising the full retirement age.

Currently, individuals can start receiving reduced Social Security benefits as early as 62, with full benefits kicking in between ages 66 and 67, depending on one’s birth year. Delaying the age for full retirement has been touted as a way to bolster the program’s finances, but what does this mean for current and future seniors?

The Argument for Raising the Retirement Age

Proponents argue that raising the retirement age could help extend the life of the Social Security trust fund, thus preserving benefits for future generations. With people living longer and working well into their late 60s, the idea is that the system could be adjusted to reflect contemporary longevity and work patterns.

Adjusting the retirement age upwards could also encourage older workers to remain in the labor market longer, contributing more to the economy and, by extension, to the Social Security system through payroll taxes.

The Potential Downsides

Opponents of this measure believe that raising the retirement age could disproportionately hurt lower- and middle-income individuals who often have physically demanding jobs, making it challenging to work additional years. There is also a concern that older workers may face age discrimination or health issues that could prevent them from staying employed.

Furthermore, there are disparities in life expectancy that could affect the fairness of such a change. This may mean that those with shorter life expectancies — often from lower-income backgrounds — might not live long enough to recoup much of what they’ve paid into the system, thereby reducing the lifetime benefits they and their families receive.

What About the Younger Generations?

While immediately increasing the retirement age is unlikely to affect younger people, any delay sets a precedence for gradual changes. This approach means that millennials and Gen Z could see retirement ages of 70 or beyond. While this adjustment period gives them time to plan, it is also a clear signal that they might need to prioritize personal retirement savings.

What’s Next?

There’s no simple answer when it comes to adjusting the retirement age. We must weigh the potential economic benefits against the human costs and consider the diversity of situations and lives that Social Security encompasses. Any decision will need to be made carefully and with consideration for both current retirees and the generations that follow.

We encourage you to stay informed and involved in this discussion, as the decisions made today will shape the landscape of American retirement for years to come. What are your thoughts on raising the retirement age?

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