Change in the retirement age in the US – This is the new proposal

Thousands of older Americans have expressed concern about the future of Social Security in recent months, citing new proposals, prospective payment cuts, and even a probable shortfall in funds. According to the latest news, it seems that everything is about to change for retirees, as a new retirement age is likely to be enacted in the United States.

In this case, Rachel Greszler, a senior research fellow at the Roe Institute, wants to introduce a new proposal to raise the full retirement age to 70, which, if enacted, could affect millions of future retirees who will have to wait more years to receive their monthly Social Security benefits. 

According to Roe Institute Senior Research Fellow Rachel Greszler, who wrote an article for the right-leaning Heritage Foundation, raising the retirement age to 70 would help alleviate the Social Security Administration’s (SSA) impending fiscal cliff.

Greszler also proposed raising the normal age for receiving Social Security retirement benefits to 70. According to the Social Security Administration’s 2023 Trustees Report, released earlier this year, Congress must act to ensure the stability of the trust funds that support the nation’s primary retirement, survivor, and disability insurance (RSDI) program, or they will run out of money in 2035.

Raising the retirement age will significantly impact retired workers in the US

The full retirement age (FRA) in the United States, often called the “normal retirement age,” is the age at which you can collect full Social Security benefits. This age varies by birth date and eventually rises as life expectancy increases. Early retirement begins before the full retirement age, with the youngest age being 62 and the full retirement age for those born after 1960 being 67.

According to Greszler’s article for the right-leaning Heritage Foundation, the normal eligibility age for collecting Social Security benefits should be raised to 70 to help address the impending funding cliff currently facing the SSA. 

For this reason, Congress must act to ensure the solvency of the trust funds that support the nation’s largest retirement, survivors, and disability programs; otherwise, they will run out of money in 2035, according to the SSA’s 2023 Trustees Report released earlier this year.

In addition, Greszler recently wrote that to restore Social Security’s purpose, policymakers should gradually raise the traditional retirement age from 67 to 69 or 70, increasing the age by about one or two months a year.

In addition, Greszler argued that the U.S. is seeing a reduction in the SSA’s looming deficit because of longer life expectancies, better health care, and a shift away from physically demanding jobs. In addition to the financial stability of Social Security and the extra money Americans would earn, there are other benefits to older people continuing to work. Younger workers benefit greatly from the knowledge, experience, and mentorship of older workers. In addition, older workers now have more options in the labor market to gradually transition into retirement rather than abruptly end their employment.

Raising the retirement age is not enough to preserve the Social Security system

Greszler noted that extending the retirement age alone is insufficient to meet the 2035 shortfall situation. Inflation adjustments are also required. While raising the Social Security retirement age is critical, it only solves 20–30% of the program’s deficits. A more accurate inflation adjustment might reduce 20–25% of the remaining deficits. According to Stephen Kates, a financial expert for RetireGuide.com, raising the eligibility age for Social Security payments is a backward step toward simplifying and cutting benefits. 

This often means a reduction in monthly income of about 30 percent. If the earliest or full retirement age were raised, future retirees would receive fewer Social Security benefits and a later start date. Finally, according to the Center on Budget and Policy Priorities (CBPP), if policymakers do nothing, raising the Social Security retirement age will reduce payments by about the same amount as is projected to happen in the 2030s.