CHICAGO (Reuters) – Is it time to raise the Social Security retirement age? The idea crops up often as a partial fix for the long-term financial challenges facing the program.
FILE PHOTO: An elderly couple looks out at the ocean as they sit on a park bench in La Jolla, California November 13, 2013. REUTERS/Mike Blake
A higher retirement age would reduce the number of years on average that people receive benefits, as a way to cut program costs. But according to an economist at the Urban Institute who specializes in employment and retirement decisions made by older Americans, raising the retirement age would inflict serious harm on roughly one-quarter of Social Security beneficiaries.
In a report issued by the Urban Institute last month, Richard W. Johnson examines the arguments in favor and against a higher retirement age, considering trends and disparities in American workers’ life expectancy, health status and the labor market conditions that older workers face. (urbn.is/2qPHqyA)
When Social Security was created in 1935, benefits began at age 65. Starting in 1956 for women, and in 1961 for men, retirees could claim benefits as soon as age 62, but monthly benefits were reduced permanently depending on how early they filed. Meanwhile, the age when 100 percent of earned benefits are paid – the full retirement age (FRA) – began to rise gradually under reforms legislated in 1983. The FRA is gradually increasing to age 67 for workers born in 1960 or later; for example, workers born between 1943 and 1954 reach their FRA at age 66; for people