Increasing the retirement age for Social Security program, some believe, could help manage the program's financial challenges. Recent proposals, including those from select Republican lawmakers and the influential think tank, have advocated for increasing the age of full retirement benefit eligibility from 67 to 69. If approved, workers would be left with the decision to work for more years or endure a more financially constrained retirement, with 8% less benefits over their lifetime compared to the current system, as estimated by the Congressional Budget Office (CBO).
The possibility of Social Security trust funds running out by 2034 has triggered grave concerns. Without adequate funds, the government would need to reduce benefits to 83% to keep the program alive. Raising the age bar, Republicans argue, could counter Democrats' proposals to hike taxes among high earners to bridge the funding gap.
Boosters of raising the retirement age argue it adjusts to longer life expectancies, thus reducing the overall burden on the program. They suggest that higher life expectancy, improved healthcare, and decreased physical demands of jobs enhance older individuals' capacity to work longer. Hence, they consider improved life span an opportunity for older workers to contribute their wisdom and experience while easing into retirement instead of abruptly quitting their careers.
However, raising the retirement age doesn't seem popular among the public. In a 2023 Quinnipiac poll, 78% of U.S. adults opposed this idea. Critics voice the unfair impact it would have on different jobs. Workers in physically intense jobs may find it strenuous to delay their retirement. For instance, a 2020 study of Danish workers discovered that individuals in physically intense jobs are likely to work at least two years lesser than their counterparts in less physically demanding jobs.
There's also a proposal to implement a differential retirement age, favouring highly paid workers, while keeping the retirement age fixed for blue-collar jobs. This model plans to align the retirement age with education, as individuals with higher education typically manage to work for more years. However, such a measure could accentuate the existing social disparities based on privilege and socioeconomic backgrounds.