Social Question

josie's avatar

What exactly is the big deal about raising the retirement age?

Asked by josie (22424 points ) December 18th, 2012

First of all, I really do not believe for one second that I will ever see a cent of the money I have already put into Social Security or Medicare. So I admit that my question is mildly disingenuous.

But having said it, there are gradually increasing takers of the benefit, and gradually fewer payers of the benefit. And there are not enough rich people or riches to tax to cover the cost forever. So something should be done about SS and Medicaire.

One solution to extend the retirement age. It would probably only affect those younger than 55, and for most people it would be moment decades away. It would buy a few more years , and give me a chance to get some of my money back.

Great idea in my opinion. But I have noticed that when the topic comes up, people gripe vigorously. And often enough it is people old enough that the change would not affect them anyway.

What is so sacred about age 66. What is so awful about age 69? What is the big objection?

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21 Answers

KNOWITALL's avatar

This decision was not based on any philosophical principle or European precedent. It was, in fact, primarily pragmatic, and stemmed from two sources. One was a general observation about prevailing retirement ages in the few private pension systems in existence at the time and, more importantly, the 30 state old-age pension systems then in operation. Roughly half of the state pension systems used age 65 as the retirement age and half used age 70. The new federal Railroad Retirement System passed by Congress earlier in 1934, also used age 65 as its retirement age. Taking all this into account, the CES planners made a rough judgment that age 65 was probably more reasonable than age 70. This judgment was then confirmed by the actuarial studies. The studies showed that using age 65 produced a manageable system that could easily be made self-sustaining with only modest levels of payroll taxation. So these two factors, a kind of pragmatic judgment about prevailing retirement standards and the favorable actuarial outcome of using age 65, combined to be the real basis on which age 65 was chosen as the age for retirement under Social Security.

http://www.ssa.gov/history/age65.html

*People hate change.

tom_g's avatar

@josie: “What is so sacred about age 66. What is so awful about age 69?”

…or 75? or maybe 80?

JLeslie's avatar

I would rather tax a little more, like maybe the people who pay into Social Security part of the year, because they make so much, then increase the retirement age. If you drop dead at 65, you never see back a cent of what you paid in if the retirement age is 66. I know people live longer now, but people also still die in their 60’s. Some jobs are back breaking, and doing them into late 60’s is tough, and companies are giving out pensions less often now.

However, if the retirement age is older people should be able to plan for that and save to get them through a couple years if they know that time is coming. So, I actually am not completely opposed to raising the retirement age, but am completely opposed to raising the age for medicare. In fact I think medicare should be offered at a younger age. A lot of people stay in the work force for health insurance. They do it when they are young and when they are old. It takes jobs from those who really need the work. I have a friend, he is a lawyer, his wife works full time only because of the health benefits. She would work part time or not at all if her husband’s job paid for his health insurance or even if insurance was socialized I bet. The way the country is set up, psychologically people don’t want to pay the full amount for health insurance. They are too accustomed to an employer paying part or all of it.

CWOTUS's avatar

It’s time to admit that Social Security is another form of welfare. Unfortunately, this form is paid “to all” simply based on attainment of a certain age. (I realize that some forms of Social Security are paid as disability income and also as income to survivors of deceased wage earners, but those aren’t the primary payouts.)

What makes it particularly onerous is that it is taxed at a flat rate up to a certain income, that is, until a “ceiling annual contribution” has been met, and then the tax cuts off. So the people who make the least pay the highest proportion of their income to this tax. What’s more, since they are low earners, they tend to work longer in their lives – because they need to – and because the work they do is often more dangerous, more difficult, more taxing on their bodies, etc., they often die younger.

So the people who make the least income and need the benefit the most, pay the most for it and receive the least benefit for the fewest years. Yes, this sounds like a government program in action.

We may as well admit that it is “just another form of welfare”, tax it via the more general (and occasionally more “progressive”) taxes that we levy on income, with no ceilings and no “employer contribution” (which tend to hide its true costs from the uninformed) and means-test the recipients to determine whether it is really necessary for them.

And we should continue to advocate for younger people to fund their own retirements, which actually does build wealth because of the true nature of “investment” over “transfer payments”.

Coloma's avatar

Well…I am 53 and I would happily be retired if I could. WTF! I don’t want to work up until the day I die. This world is fucked, and personally, I wish everyone could retire at 55 and actually LIVE a little before their bodies wear out and their energy is in the toilet.
There is no shame in wanting to enjoy your life a little before the bitter end.
Not an option for the vast majority, but, in a perfect world, yes.

JLeslie's avatar

@CWOTUS Even though I was one of the people who said we should raise the ceiling on the tax, I don’t think I can go as far as calling it welfare. Social Security people get back what they pay in so to speak. The rich guy does not get more social security because he was accustomed to a better lifestyle, he gets back at the level he paid in. The person who really makes out is the spouse who never paid in a dime. Social Security helps society overall, because it is unrealistic to leave it up to individuals to save enough on their own, or for family to handle the full financial repsonsibility. Poor people especially are less likely to save enough or be able to afford adult family members who are no longer earning incomes. Plus, social security gives the elderly some independence when their children might be paying for everything else, what I mea. Is, probably one day I will be supporting my inlaws, at least the social security check will give them a some money so they don’t have to ask my husband and I for everything. They can have some dignity,

JLeslie's avatar

@Coloma Do you think health insurance is the biggest problem with retiring young or Social Security?

cookieman's avatar

I really do not believe for one second that I will ever see a cent of the money I have already put into Social Security or Medicare.

I agree. And I also don’t believe I’ll ever have the opportunity to retire.

But that is a defeatist attitude. Is that how we want our hard work to be rewarded?

I’m fine with your solution @josie, but I’m not convinced it’ll make a difference. As I mentioned in another thread, my latest IRS report has me retiring at 72. I’m only 41. By the time I get there, they’ll have raised me to 82.

I’ll be dead before I get that carrot.

Coloma's avatar

@cookieman No cookies for you, and even if you get a couple of those chocolate chips, yes, the odds of being dead before the cookies arrive are high, or, at the very least, you won’t have the teeth to chew them with and dentures will cost 50k by that time. lol
Pureed cookies anyone?

harple's avatar

It was raised a year or so ago in the UK to roughly 67/68 from 65… (It’s a bit confusing – I’ve just been on the government website to work out when it will be for various members of the household and it depends on their current age and how many years they’ve contributed for through their national insurance contributions.) To compensate, they allowed people close to retirement age to still retire at 65 if they chose. From about now on, companies can no longer insist someone retires at any age though. Some people who would like to carry on working have found that tough in the last year as companies have been very keen to get them out the door while they could still legally do it.

burntbonez's avatar

I think there should be a formula and that retirement age should be related to average age of death, perhaps adjusted by sex. So it could come at 80 or 85% of average life expectency. Maybe 90%. Fixing it as a specific number is short-sighted, I think.

Kropotkin's avatar

Raising the retirement age is simply insane and against our interests. Firstly, there is no such thing as “not enough money.” What we have is economic output, and it is this output that we all consume, not the money. What is required is for enough goods and services to be produced to satisfy demand, and that includes the demand of retirees.

Are enough goods and services being produced? Well, productivity has increased almost every year, especially so since the 70s through the use of computers and automation. We’re producing more goods and services per capita than at any time in human history. So why on Earth are we being asked to retire at ever later ages?

Leaving aside the spurious arguments for raising the retirement age—working hours themselves are barely dropping, and millions are out of work. Lowering the retirement age and reducing working hours would actually help share the burden of work out there, reducing unemployment, and giving everyone more leisure time.

It’s reprehensible that demands are being made on people to work practically till they die. Most work is not healthy. A lot of work people do literally shortens their lives and causes all sorts of health issues. It also seems to be the people with the least physically demanding jobs and the best pay who push for later retirement.

woodcutter's avatar

One big reason why people are living longer is because of medicare and access to it. Not because they are hard workers. Many can’t work competitively when they get too old. They will competing with 20 somethings and will be squashed. But if someone can work into their late 60’s fine but that seems to be the exception not the rule. If we can get work programs that will work for seniors and at wages they can live on it would be great. But we can’t even get jobs for people in their productive years with wages they can live on.

JLeslie's avatar

Plus, the 20 year olds need work. People retiring means jobs free up for the younger generation.

Coloma's avatar

What I really hate are these ridiculous catchy little pop phrases about 50 being the new 30 and 70 being the new 50 and 100 being the new 70. Uh, no….50 is 50 and 70 is 70 and 90 is 90.
I have led a very active life and at 53 the old bod is feeling the results of old injuries and the natural aging process. It takes me about 3 hours to feel awake and ready to roll in the mornings now. If I have to be at work by nine I need to be up at 5 just to get the machine well oiled and ready to roll.

I am hardly teetering over the grave but really….I could easily spend 4 days out of 7 just sittin’ on my deck watching the grass grow, and puttering around the ol’ homestead. I resent this pressure to be running fucking marathons at 80.
Jesus, I wish it was 1925 when sitting on the porch in your rocker with a cold lemonade was still acceptable. lol

woodcutter's avatar

One thing about older workers, and that is they rock. The younger workers are often snotty- assed and could care less. Wish more seniors could comfortably work but as an oldish guy in my 50’s I know all too well the difficulties of working. I was told there is enough waste and pork in the buget to push the system further into the future without cutting benefits or working us old farts past the workable age. Some seniors who are 6 figuring or high 5 figures could use a little means testing just to help some guy who’s trying to limp by on 600 bucks a month SSI.

JLeslie's avatar

@woodcutter So true! When I lived in FL we had a lot of older workers and it was awesome! I miss them. I miss going to the store and being helped by someone who is 50+. Many of the peiple I worked with were over 60.

However, I am with @Coloma that there is some ridiculous pressure to be 35 when you are actually 55. I think it is great that people do seem overall younger at a given age, but it has gone too far. Not only in regards to expectations about energy level, but also how many wrinkles are on our face. Oy. It’s exhausting.

I will say this, most of the senior citizens I know are retired and enjoying life. Some still work part time doing something they like. A few have to work full time for financial reasons.

woodcutter's avatar

Some old guys are treated like crap by their younger supervisors because they took longer to do something or had to take off work early, as if they are expected to tow the line like the rest. Fuck that. Seniors have been there, done that, and towed many lines already. They deserve the dignity of retirement instead of grinding away their lives for the man, or kid as it often is. Expecting 40 plus hours a week from 60 plus people is wrong and expecting them to survive on less than that is worse. Seniors have many medical issues to consider and none of them are cheap to maintain.

Coloma's avatar

Well, I’m about ready to move to some remote village in Cambodia and herd my chinese geese around the ride paddies. A diet of rice and veggies and a little opium would take care of these middle aged aches and pains. Opium fields forever. lol

Yetanotheruser's avatar

Ask someone who is in the process of retiring right now!

This past March I lost my job, it would seem because I can’t keep up with those who are 20, 30, 40 years younger than I am. I was on unemployment up until last month, it ran out, and I have too many things I want to do rather than spend time on a “career search” that might get me a job for the next year or two. I applied for Social Security retirement today. I’m finished with the “wage slave” mentality, and if I need more than my SS, I have several creative ways of raising it.

Raising the age of eligibility for Medicare would probably be a wash, because it would remove many younger, healthier people from the risk pool.

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