New retirement age – How it affects Social Security benefits

Retirement is a significant concern for many Americans, particularly given the ongoing high inflation rates with few indications of slowing down. The current Social Security system requires individuals to wait until they are 62 years old to start collecting benefits, although this age does not offer the maximum advantages. Many people opt to wait until the Full Retirement Age (FRA), which typically falls between 66 and 67 years, to receive 100% of their benefits. However, the maximum retirement age is 70, and some experts believe that this age should be raised universally, potentially to 70, as a means to address the impending funding crisis facing the Social Security Administration (SSA).

This proposal to raise the retirement age to 70 is backed by conservative experts, who view it as a solution to the SSA’s funding issues. The SSA is currently facing a significant problem, as the U.S. Congress anticipates that the Administration will not have sufficient funds to pay benefits at 100% by 2035. Thus, there is a pressing need to devise a viable plan to extend the program’s life.

Raising the retirement age gradually, such as by one or two months per year and indexing it to life expectancy, could help restore the original goal of Social Security and solve many of the program’s solvency problems, according to Rachel Greszler, a senior research fellow at the Roe Institute. Older Americans can work longer due to increased life expectancy, better healthcare, and the ability to move away from physically demanding jobs, making this extension feasible.

However, it’s important to note that raising the retirement age would only address 20% to 30% of the program’s deficiencies. Other complementary policies, such as changes to inflation indexes, are also necessary to ensure the program’s longevity and sustainability in the coming decades. These changes are crucial to prevent the SSA from facing similar economic challenges in the future.

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