Apropos of this, I sometimes wonder if people even realize that the full Social Security retirement age for everyone under age 55 is now 67? There’s still a small chunk of people between 55-65 for whom the full retirement age is 66, but they’re the last of the Mohicans. Once they’ve aged out, the retirement age will be 67 for everyone.
So when you hear people talk about increasing the retirement age, keep in mind that it’s already 67. If for some insane reason you still think that increasing the retirement age is the best way to deal with Social Security’s finances, keep in mind that you’d need to bump it up to 70 to really make a difference. Does anyone think that makes sense?
I’m just guessing here, but I suspect one of the reasons this remains widely unrecognized is that so many people retire early. And you can still do that. The age for early retirement is still 62. The difference is that back when 65 was the full retirement age, you got 80 percent of your normal benefit if you retired early. These days it’s 75 percent. A decade from now it will be 70 percent. What this means is that for people who retire early, monthly benefits will have been reduced by about $150 over the first two decades of this century.
That’s a pretty substantial cut for someone in the working class who probably doesn’t have much in the way of savings. Does anyone really think we need to cut benefits for these folks even more?