The retirement landscape in the United States may soon be revamped. With the mounting financial problems the Social Security Administration is facing, a proposal has emerged to change the minimum retirement age from 62 to 70. A conservative think tank has put forth the idea as a hedge against the presumed threat to the Social Security Administration; one estimate has the organization in the red by 2035, with a fiscal deficit.
With this proposal, 62 will still be an option, while lower benefits will be supplied by Social Security until people reach the so-called full retirement age (FRA). Raising FRA to 70 would be the new standard. The Roe Institute, a conservative think tank related to the Heritage Foundation, has argued in support of the measure in the interest of stability.
The rationale behind the proposal to increase the retirement age in America
Another argument often put forward by the advocates of reform is that Americans live longer and healthier lives-aided, in a manner, compared to other generations. Roe Institute suggests that this longevity facilitates work for many who are beyond their 60s, provided their jobs are not physically demanding.
The proposal recommends an incremental increase: adding one or two months each year to the minimum age until 70. Other analysts recommend adjusting the inflation rates used to calculate monthly payments, which could reduce the shortfall in Social Security by as much as 20 to 25 percent.
Criticism of the retirement reform: Who is affected most by the change?
While these proposals are a subject of excitement, they are heavily criticized by others. Basically, those working in more physical activities or earning lower wages would find it nearly impossible to work up until 70. Furthermore, this reform might impact particularly young retirees, whose benefits would be severely slashed, according to certain analysts.
Critics argue that the mix of differing life expectancies among different segments of the population makes this measure inequitable. Structural inequities such as systemic racism, unequal access to healthcare, and other social determinants of health lead to shortened life expectancy for Black workers and other oppressed groups.
The history of retirement in the U.S.: Key points to understand the current changes
This would not be the first significant change in the history of the retirement system. A reform in 1983 raised the minimum age gradually from 65 to 67 for those born after 1960, to avoid hurting older generations at the moment. Initially criticized, those changes worked well enough to preserve the system’s viability for several more decades.
However, contemporary circumstances present new challenges. Even as the higher income earners have seen lifts in life expectancy, lower income earners have not enjoyed similar gains-especially in recent years. Some analysts wonder whether rate parity is just in light of these disparities.
Social Security in jeopardy: Implications of failing to limit the deficit
Supporters of raising the retirement age argue that failure to act could exhaust the Social Security Trust Funds and trigger automatic 23% cuts to benefits. Opponents say raising the retirement age is not the only solution. Another solution could be increasing taxes on wealthier individuals, who could raise enough revenue to shield lower-income populations from any disproportionate burden.
One thing is clear: for years to come, the fate of the Social Security issue will be hotly debated. Although the concepts around increasing the minimum retirement age to 70 have yet to pass through Congress, the debate is already set to rage on in terms of securing the future of the system, lest the most vulnerable segments of the population are harmed in the process.
