Important points
Some politicians have proposed raising the age at which Social Security recipients receive full retirement benefits to address the Social Security program’s budget shortfalls. Supporters of the plan say it adjusts for the fact that people are living longer and receiving more benefits. Opponents say it would have an unequal impact on the workforce by requiring retirees to work longer hours and receive fewer benefits over their lifetime.
Raising Social Security’s retirement age could improve the struggling program’s finances, but workers would pay a high price, according to a recent study.
Some Republican lawmakers and leading think tanks have proposed raising the age for receiving full retirement benefits from 67 to 69. Under the proposal, workers would have to choose between working longer or living with less money in retirement. The Congressional Budget Office (CBO) estimated last month that they would receive, on average, 8% less benefits over their lifetimes than under the current system.
Social Security is facing an imminent crisis as the trust funds that fund the program are on track to be depleted by 2034. At that point, the government would be forced to cut benefits to 83% of previous levels in order to continue the program.
Republicans have proposed raising the age threshold in part to counter Democratic proposals to raise taxes on high-income earners to close the gap. These proposals are the latest in a decades-long debate over whether to raise the retirement age.
Why you should work longer
Supporters of raising the retirement age say people are living longer and therefore receiving more benefits over their lifetimes than in 1983, when the age for receiving full benefits was raised from 65 to 67. The system claims to help address the facts. According to Census Bureau data, the average life expectancy for people born in 1983 is 74.6 years, while the average life expectancy for people born in 2018 is 78.7 years.
Increasing lifespans means some people can stay healthy longer and work more into old age. In 2010, men were able to work 4.2 years longer than in 1977, according to a 2016 analysis by economists at the National Bureau of Economic Research.
Rachel Gressler, a senior fellow at the Heritage Foundation, a conservative think tank, wrote in a blog post in June: “Longer life expectancies, improved health care, and a shift away from physically demanding jobs are increasing the workforce capacity of older Americans. I did,” he said. “The wisdom and experience of older workers can provide valuable insight and guidance to younger workers. And in today’s labor market, older workers are gradually transitioning into retirement rather than abruptly ending their careers. There are more opportunities to go.”
The Heritage Foundation’s support for the idea is important because the think tank could help set the legislative agenda if Republicans win the 2024 election. The foundation announced in 2018 that the Trump administration had adopted two-thirds of its policy recommendations in its first year in office.
The Republican budget proposal also calls for raising the retirement age. In March, the Republican Study Committee, made up of 180 Republicans, proposed raising the age for full retirement benefits, among other reforms, as part of its 2025 budget.
Raising the minimum age would improve Social Security’s long-term financial outlook. If the age were raised and benefits were fully paid, the program’s spending would account for 5.4% of U.S. gross domestic product by 2054, compared to 5.9% if the status quo is maintained. However, CBO says the proposed policy would not save enough money to change the trust fund’s depletion date.
Arguments against raising the retirement age
Despite the economic benefits of this system, raising the retirement age is unpopular with the public. In a 2023 Quinnipiac poll, 78% of American adults opposed the idea.
Opponents say a major problem is that the proposal would have an unequal impact on workers in different occupations, in addition to working longer or living for less money. While the labor market as a whole may be shifting to less physically taxing jobs, there are still many blue-collar jobs that wear down workers over the years, and as workers approach old age. It is not uncommon for people to become unable to work.
A 2020 survey of Danish workers found that people in physically demanding jobs tend to stay at work at least two years less than those in less physically demanding jobs. It turned out to be expected.
“Women in some of the toughest, most manual jobs, such as caregivers, may not be able to stay in the workforce for long,” Courtney Anderson, a fellow at the National Women’s Law Center advocacy group, said in a blog post. “Increases in life expectancy have gone almost exclusively to high-income earners, making this ‘solution’ not only insufficient but, most importantly, highly discriminatory.”
split the difference
Some experts try to split the difference between the two positions.
For example, lawmakers could raise the retirement age for higher-paid workers while keeping the status quo for blue-collar jobs. Alicia H. Munnell, director of the Center for Retirement Research at Boston University, suggested tying retirement age to education because highly educated workers tend to work longer.
“Although the better off in our society are living longer and healthier lives, the vast majority have not seen a significant increase in life expectancy, let alone a significant increase in healthy lifespan.” she wrote in an April blog post. “Let’s be smart here and raise the retirement age for those who can work without further harming those who can’t.”
