Social Security's Chief Actuary Questions Raising Normal Retirement Age

Stephen Goss, Social Security's Chief Actuary, has written an article for an issue of the Social Security Bulletin. Goss' article is worth reading in whole. Indeed most of this issue of the Social Security Bulletin, which is devoted to Social Security's impending 75th anniversary, is worth reading. Goss' most important point is that the primary cause of Social Security's long term funding problem is the decreased rate of fertility, that is, the average number of children born to the average American woman, rather than increased life expectancy. Goss throws in this paragraph towards the end of the article:

Because the large shift in the cost of the OASDI [Old Age, Survivors and Disability Insurance] program over the next 20 years is not due to increasing life expectancy, it is not clear that increasing the NRA [Normal Retirement Age] should be the principal approach for restoring long-term solvency. Increasing the unreduced retirement age beyond 67 is one option that may be considered, given that the population may be healthier in the future and able to work to an older average age. However, this raises the question of the adequacy of monthly benefit levels. After the NRA reaches 67, those persons claiming benefits at age 62 will receive only 70 percent of the unreduced benefit level. Further increase in the NRA would decrease the adequacy of monthly benefits at age 62, and at all other ages, even further.

Raising the normal retirement age has been the favorite plan of many on the right for "fixing" Social Security. My opinion is that increasing the normal retirement age to 67 was a bad idea and that increasing it to 70 is a horrible idea. Raising the normal retirement age to 70 would be terrific way to decrease public support for Social Security, which is exactly why those on the right promote the idea.