The importance of retirement age to Social Security and Medicare outweighs its disadvantages. (Photo: WTOP)
The importance of retirement age to Social Security and Medicare outweighs its disadvantages.
The importance of retirement age is also the focus of a contentious debate about how to shore up the shaky finances of the massive entitlement programs.
Republican presidential candidate Nikki Haley recently emphasized raising the retirement age for Americans in their twenties to reform Social Security, arguing that it should correspond to their life expectancy. GOP Rep. Nancy Mace of South Carolina echoed the contentious position on CNN’s “State of the Union.” Neither party specified a new retirement age.
Many believe they can begin collecting their full Social Security benefits at 65, the traditional retirement age for decades. However, as part of its overhaul of the entitlement program in 1983, Congress changed that.
Lawmakers gradually raised the full retirement age, beginning with those who turned 65 in 2003. Americans born in 1960 or later must wait until they reach the age of 67 to receive full benefits.
However, unless Congress acts, neither Social Security nor Medicare can provide their full benefits within the next decade.
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The trustees of Social Security announced last year that the program’s combined retirement and disability trust funds will be depleted in 2035, at which point Social Security will only be able to pay 80% of scheduled benefits.
Meanwhile, Medicare trustees announced last year that the hospital insurance trust fund, Part A, would be depleted by 2028. It will only be able to pay 90% of benefits at that time. The CBO set the year as 2033.
The importance of retirement age has put a strain on the two programs. As the US population ages, fewer workers pay into the programs and support an increasing number of beneficiaries, who are also living longer lives.
Monthly Social Security payments are received by nearly 66 million retired workers, their dependents and survivors, disabled workers, and their dependents. For many retirees, benefits constitute most of their income in their later years.
Furthermore, Medicare covers over 65 million senior citizens and people with disabilities.
Proposals to raise the retirement age typically center on when people should be able to collect their full benefits, though some plans also consider increasing the ages for early retirement and Medicare eligibility.
Proponents argue that because Americans are living longer lives, they should be able to work longer. Opponents say that some workers, particularly those in physically demanding jobs, should be able to retire at a younger age.
Delaying retirement benefits is a contentious issue not only in the United States but also in Europe. The French government currently imposes controversial plans to raise the country’s retirement age from 62 to 64, sparking weeks of protests and strikes.
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