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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
john
December 28, 2010 at 2:11 pm

It seems that "Forcing people to work until full retirement age while the over 50 forced-laid-off recently is really the best option supporte by McDonalds or MalMart"

cptgomer
December 28, 2010 at 1:03 pm

Although the government FINALLY owned up to collection of an excess of 2.5 Trillion Dollars, betweeen 1980 and 2009; the next question is how much excess did they collect from 1950 to 1980 and what is that status, vis a vis the "trust" fund. Eisenhower, for example, funded the first 5(?) years of the entire NSA budget from the Social Security fund. Was it ever paid back? Wanna bet?

Mike Philiben
December 28, 2010 at 12:51 pm

Where are all these jobs for people 62 & Older that conservatives and Republicans keep talking about? Work till 67 if your employer hasn't decided that you have to much vacation, your salary is max'd for the position you have, and your health issues may increase his participation in their health plan! I guess all that interferes with record profits!

Stosh
December 28, 2010 at 2:54 am

A $2K/ mo. joint life annuity for a 65 year old man and woman would cost around $400K. This is for an annuity that has no COLA, like SS does. The reason SS is going broke is that people have been getting much more benefit than they and their employers ever put in, not to mention the dependent and disability drains on the system. SS taxes need to be much higher, or we need constant, never ending economic growth if the system is to continue in the current scheme. Nothing lasts forever.

Kalman Pipo
December 27, 2010 at 6:36 pm

Understandable but not practical. Just requiring people to work until full retirement, 67 for me eventually, does not mean that older people will be able to actually GET or KEEP jobs. I know many people over 55 who have been forced in retirement or "job discontinued". Forcing people to work for close to minimum wage at McDonalds or MalMart, which is not enough to live on, will cause these people to have horrendous, stress-filled lives, all the while waiting for the social security benefits that were promised to them a lifetime ago. I have an idea, lets spends billions and billions ore on wars and tax breaks for the weathiest 2% of Americans. God forbid that any belt tightening might impact a country club membership or something.

Janice
December 27, 2010 at 5:01 pm

I would like tobe able to retire no later than 65 62 preferably buit that si a pipe dream i would like to be able to enjoy retiurement without having to worry about the money I do have some saving s saved but I am having to dip into it more than i had planned due tot eh econony i would like for the governmet to leave our social security mone alone they us it for too many other things i want to live comfortable after I do get to retire Just stop dipping int o the moeny we ahve all paid into and lets us have our money for when we retire.

Mensaman
December 27, 2010 at 4:15 pm

Any rule placed in effect should not affect those that retire within 10 years (of age 62).
The government made a promise of Social security Insurance. I paid in good faith on those ground rules. You need to give people the time to re-tool and compensate for changes. It's too late for me. Do you really want to pull the rug out from under us just as we are about to retire?
I lso disagree changing the COLA rules for seniors on SS. Some of them really need every penny.
Raise the cap to $400K and increase retirement age to 68 for workers 30 and under - all fixed!

Pam
December 26, 2010 at 9:13 pm

Does our government really know how many people 50 and over have a difficult time finding a job. I know of many, you are retired or downsized out of a job you have had for a long time. Then nobody wants to hire you at a rate of pay you are use to or worth for that matter. I would like to enjoy my grand children and not have to drop dead working. I hope to retire at 65!! I have been working since I was 15 and I am now closer to 56 with 10 years to go. The people who think its not hard to work at a desk need to try my job. I admit it is not physical but the mental stress is sometimes very hard to deal with. My job requires me to do a lot of different things, I work very hard, but would like to enjoy a little of my life. If we work until 67 or 70 I might have 10 years give or take. I do not consider that retirement. I really would like social security fixed as I have paid into ss for many years. I think what bothers me the most is that social security has been used for so many things it was not supposed to be used for, so now we should be penalized for the government not taking care of social security the way it was meant to be used. Iam sure nobody really listens and I talking all politicians no matter if you are republican democratic or liberal. I am speaking as a tax paying American.

Bradley Tate
December 26, 2010 at 8:19 pm

Rich people do not need cash social security payments, they need tax shelters. I say save social security by giving the rich more tax shelters than the value of cash social security payments. Therefore, we save social security buy reducing or eliminating the payout to the rich. we give the rich what they really want, the tax credits, and we save social security by reducing the payout in the system. a win win situation!

Harold
December 26, 2010 at 2:43 pm

The problem with giving the government this "extra" money is that they will find more ways to give it away. They we will be asked to dig into our pockets a little deeper and give that up.