from an expert in the field:
Alicia H. Munnell is director of the Center for Retirement Research
at Boston College (
SEPTEMBER DEBATE RESULTS:
Should students still be
taught cursive writing?
OLDER AMERICANS ARE living longer, they are healthier and they
now are as well educated as younger workers. In addition, most jobs have
become less physically demanding. Working longer keeps people engaged
and active, allows time for their 401(k) balances to build up and shortens
the period over which they have to rely on accumulated retirement assets.
So raising the retirement age, which requires workers to delay claims to
get the same benefit, and thus get that benefit for fewer years, seems like
a reasonable way to cut the Social Security shortfall.
The Social Security retirement age is already moving up. The age at which full Social
Security benefits are paid used to be 65, is currently 66 and will reach 67 in 2022. One option
to raise the full retirement age beyond 67, which would probably find broad support, is to then
index the age to life expectancy, so that the share of “adult life” past the full retirement age
remains the same. Such an automatic adjustment would not only improve the system’s financing
but also lessen the likelihood of having to return to the bargaining table.
A key consideration is that workers who do not respond to the rising full retirement age
will receive actuarially reduced monthly benefits. Even though the full retirement age has been
raised from 65 to 66, more than half of all workers continue to claim benefits at age 62, the
earliest age they can. As the full retirement age moves higher, those who claim at 62 will receive
ever-lower monthly benefits and risk having seriously inadequate incomes in their 70s and 80s.
If we raise Social Security’s full retirement age, it thus seems imperative to also raise the
program’s early retirement age. This will not significantly affect the system’s finances, as lifetime
benefits are much the same no matter when they are claimed. But it will disadvantage those
who are either too ill to work or cannot find a job. And it will reduce lifetime benefits for those
with low life expectancy. Raising Social Security’s retirement age should be on the table in any
discussion to restore balance to the system. But it should be part of a comprehensive reform
that also addresses these issues. C
Percentage reflects votes
received by September 14, 2010.
AUGUST DEBATE RESULTS:
Is traf;c photo enforcement
a good idea?
YES: 40% NO: 60%
Percentage re;ects votes received by
August 31, 2010. Results may re;ect
Debate being picked up by blogs.
from an expert in the field:
HAVE YOU EVER seen those TV commercials of happy seniors having
the time of their lives, retiring in comfort and dignity after a lifetime of
work? That’s a dying dream for too many Americans. Many grandparents
now have to spend their days working as cashiers or service workers,
jobs that once would have been done by their grandkids.
Retirement security is under assault. The last thing we should do is
undermine it further.
Future retirees face stunted personal savings due to corporate and
public policies that have driven down wages. And the Wall Street greed and recklessness that
sank our economy also sank retirement accounts.
Thirty-six percent of workers have less than $10,000 in retirement savings. With the
continuing employment crisis, that will not change anytime soon—unless it gets even worse.
In this bleak landscape, Social Security is the one feature of our retirement system that works
for all Americans.
Proposals to increase Social Security’s retirement age would be an across-the-board benefit
cut at every age for every worker. It would mean that Social Security’s already meager benefits will
be even lower in the future. Seniors would have to work even longer to sustain any quality of life.
Retirement age for full benefits is gradually being increased to 67. If Republican House
Minority Leader John Boehner has his way, the retirement age would increase to 70.
Research shows that an increase in the retirement age from 65 to 67 amounts to about a 13
percent cut in monthly benefits. If the retirement age were increased to 70, workers would see
another 19 percent cut in their benefits, slashing benefits by a total of around 30 percent. (The
benefit amounts were calculated by Nancy J. Altman, co-director, Social Security Works, and
reviewed for accuracy by the chief actuary, Social Security Administration.)
If Social Security detractors want to tackle a real problem, they should take on the larger,
and looming, retirement security crisis crashing down on the heads of seniors and future generations. To fix what’s broken, let’s design a renewed employer-based retirement system for future
generations while strengthening, not cutting, Social Security.
Retirement should be secure and achievable for all working people. And American values—
reward for work, compassion, fairness, foresight and fiscal responsibility—will lead us there. C
Richard L. Trumka is president of the AFL-CIO (
OCTOBER 2010 ;e Costco Connection 19
Opinions expressed are those of the individuals
or organizations represented and are presented
to foster discussion. Costco and The Costco
Connection take no position on any Debate topic.