The United States is looking into a new minimum retirement age to help Social Security deal with its current problems. A group of conservative experts wants to raise the age from 62 to 70.
The goal of the idea is to cut down on the Social Security Administration’s (SSA) ongoing budget deficit, which is expected to reach a breaking point in 2035.
People in the US can retire as early as age 62, but if they do, their benefits will be lessened until they reach their full retirement age (FRA).
The year of birth makes a difference. They will get full benefits if they retire at age 70. The Roe Institute academics at the Heritage Foundation support this plan.
A big change in the retirement age is coming and Social Security checks will be affected in 2025
New news says that there is a big change that will affect when we can retire and how much money we get from Social Security. The Roe Institute recently said that the minimum FRA should be raised by one or two months every year until it reaches seventy.
And to work longer hours and jobs that are not as hard on the body, they say that Americans are healthier and living longer than they were a generation ago.
One way that is being looked into to make sure that Social Security‘s finances are stable is raising the retirement age.
Some researchers think that the program’s deficit could be cut by 20% to 25% by changing the inflation rates that are used to figure out monthly payments.
But not everyone agrees with these ideas. Some people say that raising the retirement age would hurt workers who make low wages.
Also, people who work jobs that require a lot of physical effort can be forced to work past the age when they can not do their job anymore.
The plan to raise the FRA to 70 is still in its early stages, and Congress may not agree with it. But the arguments about the future of Social Security and the need to figure out how to keep it going will only get stronger over the next few years.
Could younger retirees end up earning lower Social Security benefits in the future?
As a result of the Social Security Amendments of 1983, the minimum FRA age was raised from 65 to 67 for people born after 1960 and between 1943 and 1954.
As part of a lot of changes made to Social Security in 1983, the retirement age for people born in 1960 or later was raised from 65 to 67. This was done to help the agency’s finances.
The changes to the normal retirement age affect workers under 40 years old. For workers over 40, the normal retirement age stayed at 65 so as not to mess up the plans of older workers.
But if the retirement age goes up, younger retirees, especially those from low-income families, may get less money from their benefits. A group of Republicans and other politicians have said that the full retirement age (FRA) should be at least 70 years old.
When the retirement age goes up, all new retirees and people who are getting Social Security benefits for the first time lose their benefits.
These cuts could be big because more and more poor and middle-class people are depending on Social Security income.
Rich people’s longer life expectancy—which is often used as a reason to raise the average retirement age—has not been felt by those with lower incomes.
Before the COVID-19 pandemic, life expectancy for the bottom half of earners had not changed much. But since 1983, the average life expectancy at 65 has gone up. People who want to raise the retirement age often say these two things that are not true.
In the US, people are living longer. Also, black workers have shorter life expectancies and lower wages than white workers because of systemic racism and discrimination in housing, health care, education, the criminal justice system, and jobs.
This makes the life expectancy gap even bigger.
Supporters say that big changes need to be made to Social Security to stop automatic cuts when the trust funds run out. But this is not a good reason because eventually raising the standard retirement age will do the same thing.
If Congress does nothing, Social Security’s reserves will run out. This will mean that everyone’s benefits will drop by 23%. But if the retirement age goes up to 70, the average lifetime benefit for new retirees will go down by 20%.
So, a fair and effective way to pay for Social Security would be to raise taxes, especially for people who make more money and live longer than the average American. This is especially true for people whose life spans are longer than the national average.
