March 27, 2013
Most Americans retire between the ages of 62 and 64. And the average American is now expected to live to 79, meaning people who retire at 62 can receive 17 years or more of government benefits like Social Security.
But Americans’ practical ability to retire is in jeopardy, as The Heritage Foundation’s David John reported last fall:
Americans’ ability to build a secure retirement is increasingly in danger. In addition to Social Security’s rapidly approaching fiscal problems and underfunded traditional defined-benefit pensions, the retirement savings system is available to only about half of the workforce and needs other improvements before today’s workers can create sufficient retirement income.
One alternative would be for seniors to change when they retire, Heritage’s Romina Boccia suggests: “Delaying the age of retirement for those able to continue working means a big income boost for seniors, less strain on Social Security, and more economic growth.”
Boccia points us to an article in the New York Times explaining why healthy seniors should stay in the workforce longer:
[A] study published several years ago by C. Eugene Steuerle, Barbara A. Butrica and Karen E. Smith of the Urban Institute found that working just one more year would increase retirees’ income in retirement by 9 percent. Working an additional five years would lift their incomes by 56 percent.
In fact, David John suggests raising the retirement age for all future retirees. But this alone won’t be enough to improve our retirement system. “A higher retirement age should be part of a whole package of Social Security reforms,” he argues, “including ending the payroll tax for workers willing to work past their normal retirement age.”
Do you think that Heritage has the right solutions for preserving Social Security? And do you think delaying the retirement age for future retirees is a valid option? Tell us below.