Raise the Early Retirement Age
November 11, 2010
In December, President Obama's fiscal responsibility commission will recommend ways to fix long-term federal budget shortfalls, very likely including changes to Social Security. At that time, Congress should consider a reform that could increase retirement incomes while boosting the economy and federal tax revenues: gradually raising Social Security's early retirement age of 62, says Andrew G. Biggs, a resident scholar at the American Enterprise Institute.
- Today, 62 is the most common age of retirement.
- With a typical 62-year-old likely to live to age 83, an individual now spends roughly one-third of his adult life in retirement.
- Many people claim Social Security benefits at age 62 without considering that doing so reduces monthly benefits by about 25 percent for life.
- Without early retirement, poverty among retirees over the age of 65 would be about one-fifth lower.
Increasing the retirement age also would help the economy and the federal budget by increasing the nation's annual gross domestic product by hundreds of billions of dollars, says Biggs.
Some people, of course, aren't physically able to work past 62 or can't find a job. But in general, early retirees are neither less healthy nor less wealthy than later retirees.
- The Congressional Budget Office found that only about 15 percent of early retirees cite either losing a job or health problems as their reason for leaving the workforce.
- Likewise, more than 80 percent of individuals aged 55 through 64 report being in good to excellent health, according to the National Center for Health Statistics.
Source: Andrew G. Biggs, "Raise the Early Retirement Age," Los Angeles Times, November 9, 2010.
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