Why Not Raise The Retirement Age?
December 13, 1999
Contrary to Steve Forbes' charges, Gov. George W. Bush has not proposed raising the retirement age for Social Security. However, due to a 1983 change in the law, the age to collect full retirement benefits is already set to rise gradually to 67 beginning in 2000 and phased in over the next 22 years.
Now it is true that under a fully privatized retirement system, such as Forbes proposes, there would be no mandatory retirement age. But we are a long, long way away from that sort of system, and getting from here to there undoubtedly will require some reduction in benefits. Raising the retirement age is the best way of financing the transition, because it has no effect on current retirees.
Steve Forbes once thought so too. In an article in Forbes Magazine on November 15, 1977, he said, "Alas, the unaffordable [Social Security] promises have to be scaled back, and the best way to do that is to gradually raise the age at which one may collect his full benefits."
When the Social Security system was first established, 65 was actually higher than the male life expectancy at birth -- which has risen by 12 years since and is expected to continue rising (see figure http://www.ncpa.org/pd/gif/pd121399a.gif). Indeed, a new report from the Social Security Advisory Board says that Social Security's actuaries are underestimating the increase in life expectancy. And recent studies by the Congressional Budget Office, the Urban Institute and others show that the improving health of today's elderly means that many can easily continue working long past the traditional retirement age. In this day and age, raising the retirement age is good policy, not something to be attacked.
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, December 13, 1999.
For Social Security Advisory Board report
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