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No Social Security until age 65?

By Jennie L. Phipps · Bankrate.com
Sunday, October 31, 2010
Posted: 10 am ET

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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214 Comments
Firewind
December 30, 2010 at 4:19 am

Of course there's no means test, so this whacks all people evenly, no matter whether they almost completely depend on Social Security, or if it's a fraction of what their nest egg's interest throws off. I mean the interest on the interest. And it continues to take from all equally until they reach 65|67. How obviously fair, no? Smells a lot like the recent tax grand bargain which now ensures that the rich come all the way through The Great Recession completely unscathed. From all of them (well, nearly all) thank you American Enterprise Institute and Murdoch&Ailes for doing your jobs.

Now, if you and the Heritage Foundation can really take this across the goal line by getting your concept, touted by Bush II before The Great Recession, passed: That everyone's entire retirement should be in stocks and bonds. Actually, its prospects are looking outstanding. All the president and democrats in congress have to do is be bipartisan while the republicans are not. But a trickle-down rising tide floats all - um - yachts, no? Watch for this from Murdoch&Ailes's salesmen and blondes, again and again. To disagree with them would smack of class warfare, an epithet.

Heads, the rich win; tails, the blue collar loses.

Howard
December 29, 2010 at 6:01 pm

The only fix SS needs, is a Law preventing Congress from taping SS funds, to fund non SS issues... Such as the hit it just took from this lame duck session, related to the the new inacted Bush tax extensions...

Mel
December 29, 2010 at 3:40 pm

It is always the people who don't have to worry about retirement that want to change it. The Congressmen who are eligible to retire at 50, or the scholars who have the ability to ponder life fixes from their Ivory towers and retire with fat state pensions. Its laughable. The truth of our economy is there might not be any jobs for 60 year olds. Are we replacing SS with Unemployment checks? In addition, to say that everyone will be able to work until 66 is not realistic. Have you seen the obesity and diabetic numbers for the US? Keep the option open that way you can work until you feel like it or at least until unemployment becomes your reality.

Notarichboy
December 29, 2010 at 1:51 pm

Maybe Andrew Biggs and his scholar friends won't have a physical problem working until 66 or 67, but what about average people who are working in factories or construction for example abusing their bodies everyday. I love how people who have cush jobs and make good money think they know so much. Here's some news for you, if you are under the age of 45 you don't have to worry about what age they set retirement at anyway because there will be no money by then!

RONALD KUTCHINSKI
December 29, 2010 at 10:47 am

Goverment should paid back the monies they stole from the soical security to start the FOOD STAMP WELL GIVE IT BACK THE MILLIONS DOLLARS GOVERMENT TOOK

Bill
December 29, 2010 at 8:48 am

I am a volunteer who helps 60+ low/middle income seniors prepare their federal and state income taxes. Many singles and couples are retired with only very modest pensions and social security as their only source of income. As such,they don't pay any federal income tax as their personal exemptions and standard deductions are more than their income. That's good but without Social Security, they would be indigent and would not be able to live in the home where they have lived most of their life. They for the most part present themselves as happy to be able to live, albeit frugally, independent of state assistance. Social Security is what keeps them going. And, even if they are capable of working beyond 65, jobs may not be there for the 10,000/month men and women who turn 65 every month. Thus, the ability to take S.S. early with reduced benefits should remain as an option for those who need it. Actuarially its a wash for the S.S. fund.

Jerry
December 28, 2010 at 5:42 pm

I have been working since I was 16; 42 years I retired from one job in 2004 and have a pension. I have been working two jobs for the passed 6 years and I planned on receiving ss at age 62. Its time to relax and enjoy my final years. If the hands of the federal gov't didn't have its hands on this money the system would be solvent. Why not, as with the car companies and insuance and banking industries, dig into the general tax fund and make ss what it was meant for.

JAMES
December 28, 2010 at 4:45 pm

I agree for not to change the COLA rules for seniors.I'm close to the age 60 and would love to enjoy my SS,that I deserve and worked so hard to receive.Leave SS alone so everyone my age could retire and live out the rest of the days that our LORD has given us, cause when you'll too old you want be able to go or do anything with your family. HELP US the working man.It got to stop somewhere.POOR and NEEDY,BUT NO ONE BAILED US OUT.

john
December 28, 2010 at 2:15 pm

"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"

What if no one want to hire you to work anymore regardless if you want to work or not?