Robert Laura, who is in his own words, “a social worker turned financial planner” contributed a recent article to Forbes advocating that the Social Security retirement age be increased to 80.
Laura’s first five words of his article state “I know that sounds absurd,” which is the best point he makes in the entire article.
Not only does it sound absurd, but it is absurd. Currently everyone born after 1960 has a Social Security full retirement age of 67. Increasing the retirement age by 13 years is absurd. The last time the retirement age was increased was the 1980s and that was a gradual increase over decades from 65 to 67.
The author attempts to justify this proposal by stating that the average life expectancy in 1935 was only 62, so increasing the retirement age only seems fair. Unfortunately there are major flaws with this approach. First of all, the author seems to think that because overall life expectancy is higher it would be a natural progression to increase the retirement age. Although the life expectancy for the wealthy and high earners has significantly increased since 1935, not so much for the lower-income and less-educated men and women who rely on Social Security the most. This is no news either, this has been known for a long time, so anyone who claims that raising the retirement age impacts the wealthy as much as the poor is not telling the truth as this 2012 story from U.S. News and World Report shows.
“The longevity rationale for raising the retirement age is not a story that applies to lower-income and less-educated men and, especially, women. They would get hammered by raising the retirement age. And they are precisely the group of Americans—and a pretty big group at that—which depends desperately on Social Security benefits for the bulk of their retirement incomes,” the story said.
The proposal to increase the retirement age to 80 is absurd, but also unfair as it would penalize the poor significantly more than higher income earners, many of who don’t even pay Social Security taxes on all of their income like most Americans do, and raising the cap on Social Security taxes is a much fairer plan.
