One of the most important government programs is the Social Security Administration (SSA). It helps low-income seniors with money and gives monthly payments to more than 64 million retired workers in the US. But the U.S. Senate recently suggested that Social Security users should be able to retire at a younger age.
Recent news stories say that things are about to change for seniors because the United States is about to get a new retiring age. A senior research scholar at the Roe Institute named Rachel Greszler wants to present a new plan to raise the full retirement age to 70.
If this plan is accepted, it could mean that millions of future retirees will have to wait longer to get their monthly Social Security benefits.
The plan won’t be put into action on a certain date. Even so, it has caused a lot of debate because it might affect people’s retirement payments. There might be an effect on Social Security in the United States.
People who use Social Security would also have to sign up for a legal ID from the SSA. Lawmakers have pointed out that raising the retirement age is very important because seniors are at greater risk of losing their savings, which can hurt their finances.
Rachel Greszler is a major player in this debate. She bases her point of view on the SSA Trustees 2023 Report, which says that retirement trust funds will run out by 2035 if nothing is done.
Raising the US retirement age will impact Social Security payments for retirees
Rachel Greszler wants to raise the retirement age to 70 to help the SSA’s finances and make it more common for people to start getting Social Security retirement payments at that age.
The Social Security Administration’s 2023 Trustees Report, which came out earlier this year, says that Congress needs to take action to protect the trust funds that support the main retirement, survivors, and disability insurance (RSDI) program in the United States.
If they don’t, the funds will run out of money by 2035. You can start getting full Social Security payments when you reach the full retirement age (FRA) in the United States. This age is also sometimes called the “normal retirement age.” This age is different for each person based on their birth date and slowly rises as their life expectancy rises.
The youngest age to retire is 62, and the oldest age to retire is 67 for people born after 1960. This means that early retirement starts before the full retirement age (FRA). When Greszler writes for the right-wing Heritage Foundation, he suggests that the normal age for getting Social Security benefits should be raised to 70.
This would help the SSA deal with its upcoming budget cliff. The SSA’s 2023 Trustees Report, which came out earlier this year, says that Congress needs to do something to make sure the trust funds that support the country’s biggest retirement, death, and disability programs are stable. These services will run out of money in 2035 if it doesn’t.
Greszler recently said that to get Social Security back to what it was meant to do, lawmakers should slowly raise the normal retirement age from 67 to 69 or 70, adding a few months to the age every year.
Greszler also said that the U.S. SSA deficit is going down because people are living longer, health care is better, and people are moving away from physically demanding work.
In addition to the security of Social Security and the extra money they would get, older workers would get other perks as well. The knowledge, experience, and guidance of older workers are very helpful to younger workers, who now have more job choices as the older workers slowly retire.
Changing retirement age won’t be enough to protect the Social Security system
The gap in 2035 can’t be fixed just by raising the retirement age; it also needs to be adjusted for inflation. It is important to raise the retirement age, but that will only fix 20–30% of the program’s problems. A more accurate adjustment for inflation could cut the gap by 20 to 25 percent.
In many cases, this could mean a 30% drop in annual income. If the full or earliest retirement age were raised, people who retire in the future would get less money from Social Security and would start getting it later.
Finally, the Center on Budget and Policy Priorities (CBPP) says that raising the retirement age for Social Security will cut payouts by about the same amount that was planned for the 2030s if nothing is done.