Among the more popular ideas for "fixing" Social Security retirement is raising the so-called 'Full Retirement Age" or FRA. Most people think that they can retire at 65 with full Social Security benefits. But, this is not the case for anyone born after 1938. From then on, FRA increases up to 67 if you were born after 1959. Some thinkers believe that increasing FRA past 67 would help Social Security stay solvent. But this is not a universally-held opinion.
Raise The Retirement Age?
You can read both sides of this debate and see which argument makes more sense to you. Michael Hiltzik in the Los Angeles Times is opposed to raising FRA. His argument is that American workers age differently (in terms of mortality, not chronology--which is still the same for everyone) depending on said workers's economic status. The short version of this argument is that poorer people die sooner than rich people. Raising FRA would therefore punish poorer people disproportionately. Oh, yeah? Says Andrew Biggs of the American Enterprise Institute. Biggs thinks that Hiltzik was not nearly nuanced enough in his assessment of the affects of raising FRA. Biggs provides all the usual charts and graphs to support his conclusion that raising FRA would have a negligible affect on the progressivity (read: fairness) of Social Security retirement benefits.
Is 70 the New 67?
Is There A Simple Solution?
So, who is right, or at least more right? There is no simple answer to this question. What I think both men overlook is the effect that early retirement has. Far too many people begin their retirement benefits at age 62. At present, anyone who qualifies for retirement benefits can do this. If you go on early retirement (please don't) what difference does it make what your FRA is? Once you start collecting retirement checks, your FRA is irrelevant. One really radical way to shore up Social Security's finances would be to lower early retirement to a younger age. Actuaries would have to run the numbers, but I think if you let people start their Social Security at 55, for example, but cut their benefits by 60%, Social Security would save money in the long run. I fear a lot of people would gladly make this bargain and retire at 55.
Read The Articles For Yourself
Here are the two articles. Read them and let me know who you think had the better argument.