The age at which workers can receive full Social Security benefits should be increased to help reduce the looming insolvency of the system, the American Academy of Actuaries said today.
“The sooner policymakers act, the more options they will have,” Thomas Terry, vice president of the Washington-based academy and chairman of its Pension Practice Council, said at a press conference this morning.
He is also chief executive of JPMorgan Compensation and Benefit Strategies, a unit of JPMorgan Chase & Co. of New York.
Tax increases could be phased in more gradually, and reductions in benefit growth could be spread across a much larger population, Mr. Terry said.
The academy suggested three proposals for raising the retirement age.
Under one plan, the age at which full benefits could be received would be raised to 67 for all workers born in 1949 or later, which would reduce the expected deficit by 10%.
The second plan would increase the full benefits age to 67 and increase it by a month every two years until it hit 70, thus eliminating 35% of the expected long-range deficit.
The third option would increase the schedule for full benefits by two months every year until age 70, eliminating half the long-range deficit, the academy said.
The system is expected to have cash flow problems beginning in 2017, and the Social Security trust fund will be exhausted by 2041 at the current rate, the academy said.
1 comment:
There is no free lunch, we can expect to live longer and to work longer. The concept of the traditional retirement, or at least, slow down at age of 55 is now something we can only see on retrospective dramas such as Mad Men. Thank you for the post, I plan to download the entire study. Also want to understand what the Presidental candidates stands on Social Security reform.
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