RAISE RETIREMENT AGE NOW, ACTUARIES SAY

August 6, 2008

Actuaries are urging policy makers to raise the retirement age as the first step to shoring up Social Security and keeping younger workers from bearing the brunt of painful tax increases.

The American Academy of Actuaries issued a policy statement Monday suggesting that holding the retirement age constant is a certain prescription for future financial problems:

  • The normal retirement age for Social Security was last raised in 1983, from 65 to 67 over a phased-in period.
  • All workers born in 1960 and after have to wait until age 67 to receive full benefits.
  • In order to avoid major disruptions to the Social Security system, officials should raise the retirement age now.

"We think that if you dig in and make these changes now ... it gives people time to plan," said Tom Terry, the organization's vice president for pension issues. "It gives people time to anticipate that now I'm age 35, I'm looking at an age 68 or 69 retirement for Social Security, and that gives you a lot of years to plan for it."

  • The organization pointed to figures showing that, since 1940, the life expectancy of American men who reached age 65 had increased by nearly five years.
  • Women who reached 65 saw their life expectancy increase by nearly six years in the same period.

Terry said raising the retirement age "isn't going to solve the whole problem and likely would be part of a package of solutions," but he noted that because of the long-term projections, the retirement age is the best place to start.

"If we delay and wait, we're more likely as a nation to have to sort of jolt the system much more potently and hurt a lot more people unexpectedly," Terry said.

Source: Patrick Yoest, "Raise Retirement Age Now, Actuaries Say," Wall Street Journal, August 5, 2008.

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