I’ve already made up my mind that part of my retirement planning is to continue typing on this keyboard until my fingers don’t work anymore. So I’m inclined to believe that a proposal from the American Enterprise Institute, a conservative think tank, to get rid of the option to take Social Security at age 62 is a good idea. The report advocates raising the first opportunity to claim benefits to full retirement age — 66, rising to 67 in about 2020.

The author of the recently released report, Andrew Biggs, a scholar in residence at the institute, outlines these advantages:

  • Prolong the life of the Social Security trust fund by five years, a modest but significant increase.
  • Raise median income of older Americans by $7,500 a year, including both increased Social Security benefits and savings and other pension income.
  • Boost gross domestic product by about 5 percent through increased productivity, adding billions to the economy and tax revenues.

Biggs says keeping people working until 66 or 67 isn’t a physical problem for most these days. He points to another study by David Cutler, a Harvard researcher, conducted for the Retirement Research Center in Boston, that concluded that 65-year-old men have the capacity to work 90 percent as hard as men in their late 50s, and work capacity only declines to 70 percent at age 75.

So Biggs says to keep most people who were born in 1952 and later on the job for another four or five years, while continuing to make Social Security disability available to those who are physically or mentally unable to work that long.

Biggs would offer one big concession. He suggests reducing significantly or eliminating Social Security payroll taxes for people who work and contribute to Social Security longer than 35 years, because the formula for calculating Social Security doesn’t reward longer service. “The median individual receives only around 2.5 cents of additional benefits in exchange for $1 of additional taxes at the end of his work life,” he writes.

Eliminating payroll taxes would “sweeten the pot” for those asked to work longer, he says.

That would make me lots happier. How do you feel about it?

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