That’s right, reforms put in place in 1983 mean that,
for people born in 1938 or later, “full retirement age will
gradually increase until it reaches 67 for people born
after 1959 (
We all know that people are living longer now than they did
when 65 was established as a “normal” retirement age – and
we also know that, based on current savings rates, it may
well be impossible for many to afford to “retire” at age
65, at least in the traditional sense.
This week we asked readers to weigh in on the advisability
of changing the “normal” retirement age (at least for those
currently under age 55).
Before getting into the responses, a couple of readers shared perspectives on the issue of the choice of age 65 as “normal” retirement that are worth noting. One mentioned, “In 1935, when the program started, the average worker has a life expectancy of 61.7 (and normal retirement was 65). The average life expectancy today is 77. We need to return to the same formula before our kids end up spending all of their future income on providing us with retirement benefits.” And, for those of you unfamiliar with how we came up with 65 in the first place, a reader noted, “Otto von Bismarck first set the retirement age at 65 when eligible persons were the “frail old” in 19th century. In the 21st century, few of us in theare frail, or even very old, at age 65. I can’t figure out society should pay me to cease all productive activities and go play golf just because I had a birthday.”
The responses this week were more evenly spread out than normal – no doubt reflecting both the complexity of the issue, if not its proximity. Still, the most popular response this week was to “leave it alone”, cited by more than 28%. Even here more than one reader echoed the sentiments of one who said, “I think it should follow social security. (But what happens if social security is no longer there)?. Or there was the reader who said they thought it should move with Social Security, but cautionedâ€¦ “Not that I am expecting to see anything.”
However, raising it to 70 was a very close second, garnering the support of 25%, while nearly 18% said we should simply increase that age in increments that matched Social Security, while roughly 4% called for it to be moved to age 75, and 2% said it should be a younger age than it is presently.
A reader that supported a move to 75 noted, “Maybe if the Social Security retirement age was moved to 75 we could get participants to seriously think about being responsible for their own retirement income. It would also allow Social Security to do what it was originally intended to do: provide a few years (not decades) worth of income when people would most likely not be able to work.”
Interestingly enough, while “other” is a favorite choice for many readers, this week it drew a very strong 22%, most along the lines of “I’ll go with (F) “other”- irrelevant because Social Security probably won’t exist when I retire.” Another said, “I’m 34. Thus, the likelihood of this still being valid at retirement age, whatever it might be, is as likely as Social Security still being worth 30% of my post-working income.”
Another said, “I’m 29 years old. I don’t have a clue what the working world will look like in 35 – 40 years. I think the retirement age should be whenever a person chooses to retire. It’s a personal choice, and hopefully a well thought out one. I’m not counting on receiving a penny from SS. I’m savings lots in my 401k! :)”
As in so many things, a hard and fast retirement age has its challenges. As one reader noted, “â€¦ in many physically-oriented positions, performing beyond age 55 may be impossible for the average individual (the military has known this for years, which is why they have to thin ranks to those meeting certain physical criteria and offer an earlier “retirement” age). This is also true for public safety positions such as police and fire &rescue workers.” Another noted, “People in my generation and younger, also, very importantly in my economic status, are not working the back breaking jobs our grandparents and parents did. We are information workers. The brain does not wear down like the body does. In fact, we now know that the more stimulation your brain gets the stronger it gets. Work provides brain stimulation as well as social contacts, another very important point to strong mental health. It is not just a matter of economics but also of quality of life. Work, today, provides more than just a pay check and access to benefits.”
One reader noted, “All of my friends are agreeing that they fear that there will not be any Social Security Benefits when we reach retirement. Why should we pay into Social Security to receive nothing in return??” It was a comment that could have come from my lips 20 years agoâ€¦ Another said, “My basic position as a Boomer who is over 55, with a spouse who is under 55, is this: You can do anything you want to Social Security – as long as you don’t mess with MY benefits!”
A statement that caught my attention was the reader who said, “One participant asked me, “What is the incentive to save for retirement if I’ll never be able to retire anyway?”
But this week’s Editor’s Choice goes to the reader who observed, “Doesn’t really matter what they change the age to, because until they make our healthcare system affordable, we’re all going to keep working until the day we die.”
Thanks to everyone who participated in our survey!
(b) Even though modifying to match Social Security makes sense, it's been our experience that very few folks retire at 65. Some go early; some stay later. Because we are dealing with individuals, the only rules that apply are "there are no rules". Flexibility is the name of the game.
Well, I'm 26, so I think 26 would be the ideal retirement age! 😉 Seriously, I think that the retirement age ought to be left alone. Yes, people are living longer, but the greater number of years of retirement is an important incentive for people to work and save now. I think more people my age believe in UFO's than believe that they will be able to retire at 65, and that can lead to apathy. One participant asked me, "What is the incentive to save for retirement if I'll never be able to retire anyway?"
(a) Left alone. But what about Medicare eligibility indexing? Most companies I know haven't modified early retirement ages to coincide with the new Social Security age rules because everyone is still eligible for Medicare at 65. How come nobody has looked at this issue?
Realistically, I have a feeling it will be something like D...but "C" would be nice. I don't know that I'll want to keep working until I am 75. 70 I can do... and I might just do... but 75 is a bit much. Geez... that's still 37 years away. Of course, I could always take my own retirement and start living off of my savings until I meet official retirement age so I can tap into my 401(k). This assumes that there might be something left in social security by then. So we'll go with C as my official answer... but I think D is what is going to happen eventually.
Under age 55 today 70
Under age 40 today 75
Under age 25 today 80
The push from the baby boomers will force research into longevity farther along. Lessons learned as the boomers retire will in reality have a greater impact on younger generations. This will probably lead to a longer period before meaningful employment (education through age 25 to 30) will be the norm. With a current life expectancy of 25+ years post retirement for about 2/3 of the boomers modest medical gains and better understanding of the impact of just minute changes in diet, exercise and medical treatment can push a retiree being in retirement for as much as 60 years post 65.
I believe the NRA for SS should continue to increase until it hits 75. That increase would make the system look much more like it did when it was created in the '30's. The increase is 2 months for each year beginning in 1959. This change would solve the funding problem for the foreseeable future.
I know it's after 2pm, but I am a West-Coaster just getting this newsletter (which, by the way, I try to read daily).
If the Social Security Administration had their act together, they would have long ago developed and recommended an indexing methodology using actuarial tables to slowly but steadily increase the retirement age. Such a system would be fact-based, and therefore not subject to the inevitable squabble that occurs over such changes when they are part of a political process. Congress should vote on the change and approve the methodology one time - - and perhaps build in a periodic review cycle of every five years. Our country needs to discontinue the politicization of those financial decisions that can be made on facts and actuarial data, rather continuing to rely upon a political process that becomes ever-more emotional laden. Not many things fall into such a category, but SS benefits and their timing can be analyzed with reams of data, leading to changes that can benefit the financial situation of the entire SS program - - and without coming back to the contributors for increases once again.
F) Other! Leave the age alone and modify the way the money taken out of peoples pay is managed. If the age is gradually increased, you'll start to feel like a horse with a carrot hanging in front of you. Social Security benefits as the carrot. You can see retirement, but you'll never get there. You'll either die first or the "carrot" will be all dried up!
I think it should follow social security. (But what happens if social security is no longer there?)
The fact is that not all people follow the retirement age rule. If you are well off (or well prepared), you retire early. As you said, most of us can't afford to retire at 65 and continue to work because we have to.
If the government decides to spend social security, they better find a way to pay for long term care insurance for a large population.
As a 31 year male I don't think I should be penalized for being born in the wrong year due to poor planning for the baby boomer generation by the previous House, Senate and Presidential administrations, which by their own accord have caused the problem, and now want my generation to not only pay for it, but to suffer for it. So, I answer the question this way why should I be required to retire later than someone in retirement now, or who is retiring in ten years (of which both I am helping to subsidize now)? Is this fair? Just something to consider!!!
Keep the same ages for "blue collar" workers and increase the ages for white "collar workers" immediately by 2 years for eligibility of full benefits and everybody takes an across the board 5% benefit cut. (I wonder what this would do the system actuarially speaking, as far as increasing its survivability)
(e) Move to 55. Thank goodness for a good pension system which allows for retirement for most State of employees at 55. I saw a data study which showed an employee (private or public white color, male or female) who retires at 55 will increase their lifespan approximately 5 years over a person who works until they are 65.
If work was so healthy for everyone, then we should all work until we drop dead on the job.
F) Other! Leave the age alone and modify the way the money taken out peoples pay is managed. If they gradually increase the age, you'll start to feel like a horse with a carrot hanging in front of your face with Social Security benefits as the carrot. You can see retirement, but you'll never get there and by the time you manage to catch up with it, the "carrot" will be all dried up!
Social Security should adopt decrement tables and reduce the average mortality age by 15 years to arrive at "Normal Retirement Age", by setting to a formula - the "system" in effect, sets an "average" fifteen year payout and under the law of large numbers, the administration can predict, relatively accurately, the cost of providing such a benefit. In addition, this way the "system" flows overtime with the expected increasing lifespan of the population, albeit on a lagged basis.
I'll go with (F) "other"- irrelevant because Social Security probably won't exist when I retire.
I'm 34. Thus, the likelihood of this still being valid at retirement age, whatever it might be, is as likely as Social Security still being worth 30% of my post-working income.
I think that a participant should be allowed to start taking your retirement benefit from the trust at 67 (Normal Retirement), however without any COLAs. If you hold off, up to say 5-6 years, you should get the actuarial equivalent, again without being eligible for subsequent increases.
D: Maybe if the Social Security retirement age was moved to 75 we could get participants to seriously think about being responsible for their own retirement income. It would also allow Social Security to do what it was originally intended to do: provide a few years (not decades) worth of income when people would most likely not be able to work.
a - left alone. People are living longer because medicine has advanced to the point where we are able to help people stay alive. People are not living longer because they are "healthier". People still "slow" down at the same point today as they would have 20 years ago - those that take care of themselves slow down later in life, but that was same in the 60's and 70's as well.
It should be a) left alone! Many people have medical problems that preclude their working beyond age 67 (medical problems can be genetic and not just attributable to lifestyle), but they are often not eligible for Social Security disability benefits because the eligibility criteria are so stringent. (I am somewhat familiar with this because my husband is a Social Security disability adjudicator.) Raising the "normal retirement age" for Social Security even higher would really penalize those folks, and they need the security of that lifetime benefit without penalty as early as possible.
Think eligibility should be based upon age and years of service, to include additional considerations based upon the position being performed.
If an individual is 55 and worked for the same firm for 30 years, that is usually a burnout point and they should be allowed to exit, with appropriate benefits, even if choosing to work for another firm. Perhaps some actuarial adjustment is in order given increasing longevity, but chaining late-career workers to jobs due to inability to retire based upon age is not good for anyone.
And in many physically-oriented positions, performing beyond age 55 may be impossible for the average individual (the military has known this for years, which is why they have to thin ranks to those meeting certain physical criteria and offer an earlier "retirement" age). This is also true for public safety positions such as police and fire &rescue workers.
I wonder......... if the Government invested $1,000.00 for every baby born, by the time they reached age 65, there would be quite a nest-egg.
What? Are you suggesting that there will be funding left for people who are currently under 55? Cynical, yes, but I have been told not to count on Social Security for retirement savings to be anything but. .
I'm 29 years old. I don't have a clue what the working world will look like in 35 - 40 years. I think the retirement age should be whenever a person chooses to retire. It's a personal choice, and hopefully a well thought out one. I'm not counting on receiving a penny from SS. I'm savings lots in my 401k! 🙂
I don't think they should move the retirement age around but change who actually receives monies. It should be based on need. Not everyone receiving social security needs to receive it and I'm sure there will be more in the future.
I'm sure however, all those receiving it will say they need it. We need to have some sort of calculation to determine what percentage payout someone should receive ranging from 0 to 100%
(f). This is a tough question to answer because it all depends on what you mean by "normal" retirement age, that is, what you think it implies. I think would favor of abandoning the term "normal" retirement age entirely, except that without radical (and politically impossible) changes in Social Security and the private pension system we would still need a concept to function for legal purposes were "normal retirement age" functions today. For example, I write 401(k) plans without using the terms "retirement" or "retire" at all when the employer does not want to try to fool employees into thinking that the 401(k) plan is a retirement plan. Still, I've got to provide for 100 percent vesting no later than the time the law defines as "normal retirement age." I handle that simply by providing that participants will become 100 percent vested on their 65th birthday, if not sooner under the plan's vesting schedule.
F) Doesn't really matter what they change the age to, because until they make our healthcare system affordable, we're all going to keep working until the day we die.
Well, I think my answer is "b" - modified along with Social Security, but I'm more concerned about the payment of benefits in the future than I am about the full retirement age. We need to do something to shore up the Social Security system while at the same time, encouraging the private sector to maintain and even establish new defined-benefit plans - because the defined contribution system is not going to provide retirement security to the great masses of middle and low income workers who can't afford to save and who, even if they could, do not have a clue about how to choose wise investments.
The "normal" retirement age should be "f) other." Just like our work lives
-- And everything else, it seems -- retirement is evolving into a self-care endeavor. I'm thirty-seven, and my success has come in moving from job to job, self-employment, and managing my own skill set AND retirement funds. That said, I'll "retire" when I'm ready, if at all, and it probably won't look at all like what my parents are doing today. Retirement has been like a reward, the carrot dangling from the end of a thirty-year stick. I think my generation is more inclined to find its rewards along the way.
(d) or (f) move it to 80
These seem to be the only affordable options now that Congress has failed to take any serious reform action in the last 20 years. In 1935, when the program started, the average worker has a life expectancy of 61.7 (and normal retirement was 65). The average life expectancy today is 77. We need to return to the same formula before our kids end up spending all of their future income on providing us with retirement benefits.
(b) It actually hasn't snuck up on me, I have not forgotten the change that got made and that 65 is not my SS normal retirement day. And while it has been amusing to receive notices from HR etc that ignore that fact I'd really rather it be acknowledged.
(f) Actually, I think things should operate like the military and if you put in your 30 you get to retire with full pay. That would leave me with just 2 more years to go and a lot of life left to enjoy it.
There are only five choices to actuarially "save" the SS System as we know it.
- 1st : reduce benefits
- 2nd: increase payroll deductions, either in % terms or via extension of salary earnings
- 3rd: extend the age at which full benefits are received
- 4th: offer a controlled investment program for some of the employee/employer contribution
- 5th: some combination of the other four choices
I'm very close to being 65 years old and have seen in my recent SS statement the amount I've contributed vs. the projected payout. My full payout is at 65 years, 4-months. Investing identical dollars at identical times in T-bills would have been far more beneficial for me on the payout side than being in the System. But, of course, I had no choice in the matter.
The most seamless change to help the cause would be to continue extending the age at which full benefits kick in. I would extend that age from 67 to 72 and do so in 4-month increments/year. It would therefore take 15-years (beyond the year when the current 67-year full payout requirement starts to apply) before someone has to wait until age 72 to retire. My older daughter, age 31 Â½, is going to work forever anyway - so she shouldn't care much. Medical advances should give her 120 hopefully fulfilling years.
I'm not sure of the exact actuarial impact; but my guess is that this change alone should extend the program's full payout life for a generation. What we need right now is an actuarial study to project the impact of each and every nuance of changed criteria. Maybe the System is easier to save than we think.
By the way, I'm going to try to stay employed for at least 10 more years.
Otto von Bismarck first set the retirement age at 65 when eligible persons were the "frail old" in 19th century . In the 21st century, few of us in the are frail, or even very old, at age 65. I can't figure out society should pay me to cease all productive activities and go play golf just because I had a birthday. Perhaps if I had to do volunteer work for 1,000 hours a year to get my Social Security . . .
Leave the retirement age alone, at least for now. While people are living longer, is the quality of life better the longer one lives? If not, and "normal" retirement age is raised to some other arbitrary point, there is no guarantee that people will be productive workers up to that new NRA. So, we retire at 70 or 75, don't "enjoy" retirement life, live longer spending more years in the real twilight of life because the "pre-twilight" years were spent working up to a new NRA. Let everyone make their own decisions- retire at 65, work longer, work part time- but have choices!
b) Not that I am expecting to see anything.
The age of 65 as the normal retirement age was established at a time when life expectancies were much shorter than they are today.
I think that "normal retirement age" should be a floating age, moved periodically (say, every 5 years or so) to keep up with the ever-increasing longevity of our population. Otherwise, we will have a disproportionate number of not-so-old folks wasting away in premature retirement, while jobs and work will sit unattended.....
For starters, we should move the normal retirement age to 70-ish...
It should be moved higher, along with other changes necessary to properly fund Social Security. With a longer life expectancy now why would anyone think they would have the necessary funds at age 65 to "do nothing" for the rest of their lives. 100 years ago doing nothing at some late point in your life was never an option and should not be now, it does nothing positive for the person or society.
To be very honest, does it really matter since Social Security probably won't even exist when those of us under age 55 get to "retirement".
If nothing is done to shore up Social Security, isn't the age going to have to go up to guarantee any benefits at all?
(b) Modified along with Social Security. The uniformity would simplify things greatly.
F Other. How about a carrot on a moving stick? If you can catch it, full retirement benefits. If not, well, it was nice to know and, by the way, thanks for the 20+ years of service
My response is personal and "e", other. My basic position as a Boomer who is over 55, with a spouse who is under 55, is this: You can do anything you want to Social Security - as long as you don't mess with MY benefits!
b-modified with social security. I am 62, earn a good salary, but since my company only has a 401K plan since 1994 and no pension plan, I cannot realistically retire until I am 70. If you figure the benefits, assuming I live to 84, which is reasonable, I will make out much better waiting until 70-now I have to hope the body, mind and patience are willing to wait!
No more changes - leave the NRA at 65 - this may actually help some people because they will be able to collect their pension check and still work another full time job adding extra income in their accounts. I think what should change for our pension plan is the percentage for accruing benefits - it's 1.3% per year. Is that good, bad or average?
(f) Other - like Medicare (HI), the tax for SS (OASDI) should be on all earnings and not just the earnings up to the Wage Base.
The answer to this question, is that it should be left alone. Although we may be living longer the current workplace does not allow you to slow down as you near retirement age. So you have to work full force till age 65-67 and then you may find another job to supplement your retirement for a couple of years till you are no longer able to work. But due to the decline as we age, it is too much stress for most people to expect them to proceed at full steam at an older and older age.
Realizing that our population is aging and that we will have more people reaching the mark than the system can support now, I still want to say a) leave it at 65. Purely selfish reasons of course....I am 32 and have 10years of tenure with my company. I just don't like the mental thought of adding 2 (or 3 or 5) more years to my long term goal of becoming a full-time knitter....
Being just under 55 myself, I think that 66 should be the normal retirement age for those who were born in 1950. For the rest of you, I would support means testing for benefits. After all there has traditionally been a cap to the salary base on contributions, why shouldn't there be an income test for benefits?
I think that it should remain the same. I also think that the Social Security Administration should do something about the approaching short coming of benefits to people in the current 35-50 age range. All of my friends are agreeing that they fear that there will not be any Social Security Benefits when we reach retirement. Why should we pay into Social Security to receive nothing in return??
It hardly matters. As long as Congress continues to "borrow" from the trust fund, there is not likely to be any money there when I am 67, much less 70.
(d) Moved to 75. Or at the very least (c) Moved to 70. The originator of 65 as a retirement age was and it was selected because at the time, the life expectancy was in the low 60s. When Social Security was created, life expectancy was probably around 68 years. Now life expectancy is in the 80s for both males and females and it's no wonder that the system is being strained. Social Security was intended as an Old Age Benefit and I'd argue that Old Age now starts in the 70s.
Asking a loaded question will get you a loaded answer...
I think that the Social Security System is a good idea as so many persons do not otherwise save for retirement. Having said that...
The Social Security System needs to become solvent for the long term in order to provide the benefits that it promises. Having said that...
There must be a Values discussion among the American people (via congress and its professionals) that decides the appropriate benefit levels (including the age for receipt of such benefits), to whom they should be paid and then the appropriate funding levels and mechanisms. Then...
Rhetoric aside, a disciplined approach to saving for and providing that benefit must be implemented. Having said that...
I want mine at 67...just kidding...I'm not actually eligible for Social Security...I'm a career governmental employee.
Social Security should be abandoned as is currently exists and we should all receive current benefit values we have accrued and be allowed to invest in tax deferred government securities at no cost where we stand a much better chance of increasing our nest eggs for our "golden years". As it stands currently, I probably won't even see a dime of Social Security that I have been paying into since I was 18.
We have a pension plan that offers Level Options with SS benefits at age 62 and age 65, however we are seeing more and more employees now who no longer qualify for SS benefits at age 65, they are part of the extended SS ages. This is very confusing for those that take the SS Leveling Options and something we will have to address with our pension plan very soon. I would like to see B, modified along with SS, so that employees retire at the "normal SS retirement age" making this process less confusing for all.
We're going to be forced to cut back on Social Security benefits anyway... might as well start with a change that makes sense even without the financial troubles we'll be experiencing in the program.
To provide some flexibility, maybe heavily reduced benefits be allowed at or after 65 but certainly no commencement before 65.
I believe that the retirement age should be move, gradually (that means after I retire) to age 70. With the advances in health care, the failure to start saving for retirement until later in life (too busy ensuring college for the kids) and the lack of political will to fix Social Security (Oh no, we can't do that. I need to run again soon), is there another realistic alternative?
I believe it might be a good idea to segment the population and move "normal" retirement as follows:
Current Age Group Retirement
Under 25 75
26 - 40 72
55+ AS IS
Projected lifespan is increasing. The reality is if childbirth or early childhood diseases don't get you 100+ appears to be what's in store. With gene therapies and organ cloning 120-150 does not seem out of reasonableness
I think the Normal Retirement Age should be left as is scheduled. For most boomers that age will be somewhere between 66 and 67. That has already lowered benefits for those who wish to retire at 62 or 65. Social Security has been supported across the board in the over the years because everyone is eligible for the same benefits up to the wage base. And, for individuals who still work physically demanding jobs, many can't delay retirement past 66 (or even 62!). It's better to leave the ages as is and tweak the system differently to ensure future funding. People can always delay Social Security on their own to get a higher benefit (which compound with cost-of-living increases). They can still retire early, just use their DC assets to fund the "bridge period" to the delayed SS age.
(a) Left alone. But what about Medicare eligibility indexing? Most companies I know haven't modified early retirement ages to coincide with the new Social Security age rules because everyone is still eligible for Medicare at 65. How come nobody has looked at this issue?
The normal retirement age for those under 55 today, I am 40, should move in step with the Social Security normal retirement age. People in my generation and younger, also, very importantly in my economic status, are not working the back breaking jobs our grandparents and parents did. We are information workers. The brain does not wear down like the body does. In fact, we now know that the more stimulation your brain gets the stronger it gets. Work provides brain stimulation as well as social contacts, another very important point to strong mental health. It is not just a matter of economics but also of quality of life. Work, today, provides more than just a pay check and access to benefits.