Total Change in US Retirement Age – Social Security Checks Will Also Change

The future of Social Security in the United States faces significant uncertainty, with the program’s financial reserves projected to run dry around 2035. A proposal by conservative experts suggests raising the minimum retirement age from 62 to 70 in an attempt to address the Social Security Administration’s (SSA) budget shortfall. Currently, Americans can opt to start receiving Social Security benefits at 62, though at a reduced rate unless they wait until their full retirement age (FRA), which varies by birth year, to receive full benefits. The Roe Institute at the Heritage Foundation supports this proposal, citing the potential for increased longevity and improved health that would enable many Americans to work longer.

How Raising the Retirement Age Could Affect Social Security Checks

One key aspect of the proposal is a gradual increase in the minimum retirement age, raising it by one to two months each year until it reaches 70. Advocates argue that since many Americans are living longer and working in less physically demanding jobs than previous generations, they could feasibly work past 62. This shift would lead to delayed payouts, which could help ease the SSA’s budget constraints and reduce the projected deficit by as much as 20% to 25%. Another option under discussion includes adjusting the inflation metrics used to calculate Social Security benefits, which could yield further savings for the program.

Concerns Over Impact on Lower-Income Workers and Physically Demanding Occupations

Not everyone supports the idea of a higher retirement age. Opponents argue that such a shift would disproportionately affect lower-income workers and those in physically taxing roles, as these individuals may be unable to work into their late 60s or early 70s due to the physical demands of their jobs. This proposal also raises concerns that younger retirees, especially from low-income backgrounds, could see reduced benefits if the retirement age were to increase, limiting Social Security’s effectiveness as a safety net for the nation’s most vulnerable populations.

The Historical Context: Previous Changes to Social Security’s Retirement Age

This wouldn’t be the first time the minimum retirement age has changed. In 1983, Congress increased the full retirement age from 65 to 67 for individuals born in 1960 or later, with a phased implementation aimed at stabilizing Social Security’s finances. Policymakers included provisions to avoid disrupting retirement plans for older workers, making these changes effective primarily for those under 40 at the time. However, implementing a new minimum retirement age of 70 could again require gradual adjustments to allow workers time to adapt to these shifts in Social Security policy.

Will Raising the Retirement Age Lead to Lower Benefits?

If the retirement age is raised to 70, it would effectively reduce lifetime benefits for new retirees and first-time claimants. Those who begin claiming benefits earlier than 70 could receive a smaller payout, which may impact lower- and middle-income Americans more significantly. Additionally, life expectancy has increased unevenly across income brackets, meaning wealthier individuals tend to live longer and may see more benefit from delaying retirement. Conversely, low-income workers, who generally experience shorter life expectancies, might receive less total Social Security income over their lifetimes if they are required to work longer.

The Longevity Gap: A Growing Concern in Social Security Discussions

Although average life expectancy has risen since the 1980s, these gains have not been distributed equally. Research shows that lower-income Americans have seen much smaller increases in life expectancy, while the longevity gap between different income groups continues to widen. This trend complicates arguments for raising the retirement age, as those who need Social Security the most may actually experience fewer years of benefits than wealthier individuals. For example, structural inequities mean Black workers, who tend to have lower average earnings and shorter life expectancies, could be disproportionately affected by these changes.

Alternative Solutions: A Look at Tax Adjustments

One alternative to raising the retirement age is increasing taxes on higher-income earners, a measure that some experts suggest as a fairer way to support Social Security’s financial stability. Proponents of this approach argue that higher-income individuals have longer life expectancies and larger incomes than the national average, making them more capable of absorbing a tax increase. This method would spread the funding burden more equitably, especially since Social Security benefits are already relatively low, and could reduce the need for deep benefit cuts that would otherwise affect all beneficiaries if the trust funds were exhausted.