Economic Policy Institute: Top 10 Reasons Not To Raise the Social Security Retirement Age

[Better Believe It]

Ten reasons not to raise the retirement age

At a time when more Americans are living longer, raising the retirement age may seem like a good way to strengthen Social Security. EPI Vice President Ross Eisenbrey explains why it is not.

http://www.epi.org/latest_research/entry/ten_reasons


ECONOMIC POLICY INSTITUTE FACT SHEET

TOP TEN REASONS NOT TO
RAISE THE RETIREMENT AGE

1. Raising the retirement age is a benefi t cut, and benefi ts are already too low. Th e average retiree receives less than
$14,000 a year from Social Security, which is less than the minimum wage.

2. It cuts benefi ts for all retirees, whether they retire at age 62, age 70, or any other age—and it is a cut for retired
workers’ spouses, widows, and dependents, as well. When the retirement age was raised from 65 to 67, it cut
benefi ts for the average worker who retires at 65 by 13%, meaning they lose, on average, $28,154 over the course
of their expected retirement. Raising the retirement age further, to 70, would cut benefi ts another 19%, costing the
average worker another $35,419, for a total loss of $63,573.

3. Th e retirement age is still rising from the last round of changes. It has already increased from 65 to 66 and will
continue to rise to 67 for people born in 1960 or later.

4. Social Security’s problem is not that people are living longer. Th e ratio of working years to retirement years will
be no higher in 2022 than it was in 1983, when Congress last raised the retirement age. People work roughly two
years for every year of retirement, and while people at age 65 are living three years longer than they did 27 years ago,
the 1983 law requires them to work two years more, maintaining the same basic ratio of work years to retirement
years. In other words, the share of time spent in the labor force compared to retirement will be the same in 2022.

5. Th e biggest fi nancial problem facing Social Security is rising income inequality, which cannot be addressed
by raising the retirement age. In 1983, 10% of all earnings were above the taxable earnings cap, compared to 16%
today, which leaves high earners with a windfall and Social Security with a shortfall. If those earnings were brought
back under the cap and taxed, about 40% of the Social Security funding shortfall would disappear.

6. Raising the retirement age aff ects all workers, even those who have seen little or no increase in life expectancy.
Men in the top half of the earnings distribution have increased their life expectancy at age 65 by fi ve years since 1982.
Lower-income men have seen a gain of only 1.1 years, and lower income women have seen life expectancy decline

7. Working longer is not a choice for millions of Americans, many of whom hold physically demanding jobs.
People in physically demanding jobs tend to have more physical ailments and also tend to be poorer than average.
Sixty-one percent of physically demanding jobs are held by workers in the bottom 40% of the wage scale.

8. Older Americans are already working longer than they did even 40 years ago. Th e labor force participation rate
of people 65 and older has been climbing for two decades.

9. Th e shortfall can be reduced without cutting benefi ts. Taxes should be raised on the highest earners, who pay a
much lower share of their income in Social Security taxes. Closing loopholes and raising the taxable earnings cap
so it covers the same share of national income as in 1983 would eliminate more than half the Social Security budget
shortfall. Removing the cap on the employer’s taxes would all but eliminate the rest of the shortfall.

10. About 70% of the American people oppose raising the retirement age. Over 60% favor lifting the payroll tax cap
for incomes over the current threshold.

http://www.epi.org/page/-/pdf/tenreasons.pdf

[indepat]

1. The decision-makers don't give a diddle-dy-f*ck what we the people think

:P

[chimpymustgo]

3. Except when it's how many think Obama is a Muslim; or whether a "mosque" should be built at "Ground

Zero".

This...STFU...

-edit-

10. About 70% of the American people oppose raising the retirement age. Over 60% favor lifting the payroll tax cap
for incomes over the current threshold.

-edit-

[mimitabby]

2. excellent points!