By: Bob Lucore
Social Security is the strongest pillar in the American retirement system. Half of Americans have no retirement plan at work, and most of those with work-based plans have inadequate savings in their 401K plans. Improving, rather than cutting Social Security benefits, as the AFL-CIO has pointed out, could help restore the dream of a decent retirement for aging Americans.
Nevertheless, Alan Simpson recently garnered headlines for labeling a group of California seniors “greedy geezers.” His statement ignores the fact retirees receiving Social Security get an average annual benefit of $14,000
A new briefing paper from the Economic Policy Institute (EPI), by Monique Morrissey and Eric Kingson, provides an excellent example of how factual evidence can contribute positively to the discussion of the future of retirement. The paper takes a look at proposals to increase the eligibility age for Social Security retirement benefits. Simpson, like many others, has often suggested that raising the eligibility age makes sense, because life expectancy has increased. Kingson and Morrissey say that raising the age would put huge additional burdens on many older workers because:
The economy is not generating nearly enough jobs for those already in the workforce. Assuming that those who were forced to delay retirement due to new eligibility rules could find work seems unreasonable.
This new EPI study should be carefully considered by those who think that increasing the retirement age is a relatively painless way to cut Social Security benefits. It is not.
It is worth remembering that we have heard the argument that the eligibility age needs to be raised before. As a result, Congress amended the Social Security Act in 1983 and the age for full benefits was gradually increased, from 65 years of age—for workers born before 1938—to 67 years of age for those born in 1960 or later. This contributed to the huge trust fund surplus that Social Security enjoys today. This increase in the retirement age has already offset much of the increase in life expectancy since the program began. Furthermore, increasing the retirement age adds substantially to inequalities in the distribution of income and the distribution of household wealth, according to studies by the Center for Economic and Policy Research.
Bob Lucore, a long-time ADA board member, is the former Director of Research and Policy for the United American Nurses and has worked for the Teamsters and the Department of Economic Research at the AFL-CIO. . He taught economics for several years at Centre College and Colorado State University and is currently studying Library and Information Science at San José State University. Bob is a member of UAW Local 1981, the National Writers Union.Back