New retirement age – How it affects Social Security benefits

Retiring continues to be a hot topic for Americans. With inflation still sky-high and little sign of slowing down, it seems like a pipe dream that most won’t be able to afford, let alone as the program stands now. Currently, if an American wants to officially retire and start collecting benefit they have to wait until age 62, and though they wouldn’t get it maximum social security benefits if they chose to do so at this age, it is still one of the most used options for older Americans.

Of course, most people chose to wait until what is known as Full Retirement Age (FRA), which for most falls somewhere between age 66 and 67, and collects 100% of the benefits they are owed, but these are not the only, or most lucrative, option. of maximum retirement age is 70 years old and brings some advantages that most Americans are unaware of or unable to take advantage of, however, this entire system could soon change as there is a proposal to raise this minimum retirement age in 70 and make it universal.

Although it’s only a proposal at the moment, some analysts believe it could gain enough support to become a reality, which could affect the benefits people get from Social Security Administration (SSA).

Not necessarily a bad option, this proposal to raise the retirement age to 70 is backed by a group of conservative experts who see it as a way to address the looming funding crisis it faces SSA, according to an article by Rachel Greszler, a senior fellow at the Roe Institute, published by the Heritage Foundation.

Impact on social security

Funding is one of the main concerns when it comes to SSA As it is now, the US Congress is facing a problem that will fully present itself in 2035, when the administration will not have sufficient funds to pay 100% of benefits. Therefore, the need to develop a feasible plan to extend the life of the program has been in the works for several years. The plan will have to address the solvency of the organization in relation to the trust funds that support the pension, survivor and disability programs, as well as an effort to improve its sustainability in the coming decades to avoid its transition to the future. .

According to Rachel Greszler’s article, the idea that policymakers should gradually increase full retirement age from 67 to 69 or 70 years holds water, since, raising it a month or two a year and indexing it to life expectancy to restore the original purpose of Social Securitymany of the program’s solvency problems could be solved without having to raise contributions in an unheard-of way like other proposed plans (like President Biden’s proposed plan).

Greszler argues that the retirement age can be pushed further because older Americans can work longer due to increased life expectancy, better health care and the ability to leave physically demanding jobs, and dismisses the complaints that it does a bait and switch on Americans who have been promised. a certain retirement age for decades and have contributed to the program while waiting for it to be realized.

This is not the only proposal to address the economic challenges it faces SSA. Experts also point out that some changes are needed in the inflation indices. During the increase of the retirement age for Social Security is an essential part of the process, it would only address 20% to 30% of the program’s shortcomings, so the need for other complementary policies that would help the program thrive and be long-term is still needed.