To be clear, I think full retirement age should be considered a proxy for the physical infirmities that go along with increasing age rather than life expectancy. We should not be forcing older people to be filing disability claims when their health problems are just to be expected at their age. However, there are others, particularly on the right, who think that full retirement age and life expectancy should be linked, although I think that this stance has had more to do with hostility to the general concept of social security than anything else. Increasing life expectancy gave them an argument to do something they wanted to do anyway -- cut Social Security benefits.
If people are going to live longer on SSA retirement, then it looks like the amount of tax needs to be increased or the age needs to be raised. Raise it from 6.2% to 7.2%. It would cost someone making $50K just $500 a year. Better than raising FRA to age 70.
ReplyDeleteA few tweaks (other than changing the retirement age) go a long way to making SSA more solvent. Raise the rate a little (maybe 1/2 of 1 percent) AND increase the cutoff point.
ReplyDeleteIndividual life expectancies haven't really gone down like that. The 2020 life expectancy you see in the chart assumes that 2020 mortality rates hold over the entire lifetime, as if there death rates at COVID pandemic levels every year from here on out.
ReplyDeletewelp if infected kids are getting diabetes at any higher clip (and early research is showing a big double-digit percentage increase) I think that by itself will go a long way to ensuring this recent decrease in mortality stays for good.
ReplyDeleteThe post is correct: raising the FRA is a cut in benefits, so it's logical that those who want to raise the FRA want to cut benefits. The life expectancy is just an excuse. Life expectancy has not increased for everyone at the same rate. Higher income people have seen most of the increase. For many groups, there has been no increase, or even a decrease (even neglecting the last 2 years).
ReplyDeleteThe chart shows life expectancy at birth declining. What may be more relevant is life expectancy at age 62-70. May have also declined based upon the effects of covid on the older population.
ReplyDelete@ 7:23, thank you for injecting intelligence into the comments of the blog.
ReplyDeleteFRA is 67, if I take my benefit at 62 I get destroyed. Bet they change my Medicare eligibility too.
ReplyDeleteThey’ll keep raising the FBR in the hopes it will make the system more solvent by having more people die before they collect. They entire program depends on a certain number of people never collecting. Most people have no idea how it works and think they have an individual account. It’s a social insurance program, the more people on it, the less solvent it becomes.
ReplyDeleteIt always shocks people when they file for retirement you show them how
Much was paid in and how quickly it’s exhausted. Most people have collected more than they’ve paid in by year 5 of getting benefits.
The government has no interest in making the program “more beneficial” to the public. It’s a lose lose.