Too Old to Work, Too Young for Social Security
When someone tells you it?s no big deal for Americans to work until they?re 70, chances are that person:(a) has an office job (b) earns income in the top-half of American wage earners(c) has access to generous health care coverage This is exactly the demographic that the the Social Security Administration and CBOsays has benefited most from two decades of longevity increases that far exceed what the rest of America has seen. These demographics also explain why the idea is so popular among six-figure income Washington politicians, bureaucrats, and think-tankers, including some members of the President?s Fiscal Commission. Not so much— among the rest of America.While higher income Americans may indeed be ready, willing and able to extend their work-lives to age 70…what about your 56 year old uncle who?s a mechanic (bricklayer, plumber, truck driver, waiter…you get the idea) who?s knees (or high blood pressure, stroke, Alzheimer?s, diabetes) will force an early retirement at 62? Unfortunately, it?s these working Americans who will pay the price for years of fiscal irresponsibility in Washington, if we raise the retirement age to 70 to reduce a deficit that has nothing to do with workers or their Social Security benefits.This is the topic of the latest video in our 75th Anniversary Celebration series ?Keeping the Promise?. Take a moment to watch and then share it with your friends and family.
What Does Raising Your “Retirement Age” Really Mean?
Nancy Altman, Guest Blogger
NCPSSM Foundation Board member, Social Security Works Co-Director and Author, “The Battle for Social Security: From FDR?s Vision to Bush?s Gamble”
Despite its name, Social Security?s statutorily-defined ?Retirement Age? has nothing to do with when people must or can retire. It is most accurate to think of Social Security as having a band of retirement ages. Benefits are adjusted depending on the age a worker chooses to begin to receive benefits, whether that age is age 62, age 70, or some age in between.If there were no adjustment, benefits claimed at earlier ages would be more valuable because they would be received for a longer time. The adjustments are as close as the actuaries can come to ensuring that the benefits have the same overall value, taking into account when a worker begins to receive them.Because of these actuarial adjustments, raising the ?Retirement Age? is indistinguishable from a substantial across-the-board benefit cut. Currently, ?Retirement Age?, which until 2000 was age 65, is gradually being increased to age 67. If Minority Leader John Boehner has his way, the ?Retirement Age? will increase to age 70. The chart below illustrates the impact of the current-law increase to age 67, and the proposal to increasethe ?Retirement Age? to age 70.
(You can also see the full-size chart here)
As the chart reveals, theincrease in the?Retirement Age? from age 65 to age 67, by itself, amounts to about a 13 percent cut in monthly benefits A worker aged 62 who would be eligible for $800a month, if the ?Retirement Age? were age 65, will receive only $700 a month, once the ?Retirement Age? is age 67. That same worker who waited until age 70 would receive $1400 a month if the ?Retirement Age? were age 65, but only $1240 a month, once the ??Retirement Age? is age 67.If the statutory ?Retirement Age? were increased to age 70, that change would constitute another 19 percent cut in benefits, for a total of around 30 percent. That same worker who would have received $800 a month, if the ??Retirement Age?? were age 65, would receive only $565 a month, if the ?Retirement Age? were age 70. If that same worker chose to wait until age 70, he or she would receive $1400 a month if the ?Retirement Age? were age 65, but only $1000 a month, if the ?Retirement Age? were age 70.Instead of the misleading debate over what the ?Retirement Age? should be, I believe we should be debating what we think an appropriate and affordable benefit should be. The average monthly benefit received by all beneficiaries is $1054 or $12,648/year. Given how low Social Security?s average benefit is, and the trillions of dollars that have been lost in 401(k) plans and home equity, we should be discussing raising Social Security, not cutting it further!
On the Radio
As part of our month-long commemoration of Social Security’s 75th anniversary, the National Committee will be running a radio ad campaign highlighting the program and efforts in Washington to cut benefits under the guise of “fiscal responsibility”. You can listen to our radio ad, whichhits the airwaves today, here:NCPSSM SocSec radio ad 07-13-10
Why is the President?s fiscal commission talking about cutting Social Security benefits to reduce the deficit when Social Security didn?t cause the problem?This is Barbara Kennelly.For 75 years Social Security has been a success. Millions count on receiving their modest benefit checks, now and in the future. Benefit cuts, including raising the retirement age, are the wrong solution for a fiscal mess Social Security never created.Go to the National Committee dot org to learn more.
Washington Disconnect
In stark contrast to the hype from Capitol Hill, the President?s Fiscal Commission, conservative think tanks and Wall Street economists, a risky proposal that would force older Americans to work longer, has been rejected by Main Street America. A new poll conducted by the University of New Hampshire Survey Center for the National Committee to Preserve Social Security and Medicare Foundation shows that 78% of Americans strongly oppose raising Social Security?s normal retirement age to 70.What is wrong with working longer?aren?t we living longer? Not all of us. Studies have shown workers with higher incomes who reach age 65 enjoy most of the increase in life expectancy. This is not surprising considering they are less likely to have physically demanding jobs and more likely to have high-quality health insurance coverage. In recent decades, the richest Americans gained nearly five more years of life expectancy, compared with only one year for those at the bottom of the income ladder. So when someone says, ?we are all living longer?, I?d suggest it?s clearly not that simple. The truth is the rich are living longer, the poor much less so, and whites vastly outlive other racial groups. A white female born today can expect to live to 80.6 years while an African American male can expect to live to be 69.7. In 1940, men who survived to age 65 had a remaining life expectancy of 12.7 years. For a 65-year-old man today, that projection has increased by just 5 years. This is not the longevity boom some in Washington would like us to believe as they try to sell Americans on raising Social Security?s retirement age.While many older workers may be healthy enough to work, jobs for them may simply not exist. I hear from seniors every day who?ve lost their jobs in this economy and can?t find another one. The Bureau of Labor Statistics confirms workers between ages 55 and 64 are unemployed much longer than their younger competition in the workforce as they fight for jobs in short supply. The Equal Employment Opportunity Commission saw a 33% increase in the number of age discrimination complaints in the past two years as seniors feel the pressure of aging in the workforce.For older workers in the elite classes of jobs, it?s easy enough to say– Americans should just work longer– but what about everyone else? Will our nation make the investment necessary to prepare for an older workforce? That seems highly unlikely in these troubled economic times.In addition to physical hardships, raising the retirement age even higher creates financial strains by forcing another form of a benefit cut. The normal retirement age is already rising to age 67. Raising it yet again will mean most workers who are forced to retire early at age 62 will see a cut in benefits of about 45%. The average annual benefit today is less than $14,000 ? cutting it almost in half will result in millions of today?s workers living out their retirement years in poverty; breaking the promise that has kept generations secure for 75 years.This post also ran in the Tennessean; Sunday, July 18, 2010
New National Poll Finds 78% of Americans Oppose Raising Social Security’s Retirement Age
The National Committee to Preserve Social Security and Medicare Foundation has released a new poll on American?s views on Social Security, proposals for raising the retirement age, and cutting benefits. The national telephone poll, conducted June 24-June 30th by the University of New Hampshire Survey Center, shows a growing disconnect between the average American?s economic priorities and those being debated in Washington.?These poll results aren?t a surprise for those of us who hear from Americans each day that Social Security has been their only lifeline during these tough economic times. From young and old alike, attitudes about the need to separate Social Security from the deficit debate are clear and should serve as a wake-up call to our nation?s leaders. Americans want fiscal sanity restored to Washington but they also know that Social Security didn?t cause this crisis and ignoring the promise made to millions of workers who paid into the program their entire working lives is not an option. The American people, of all ages and political persuasions have clearly said borrowing money from Social Security and then proposing benefit cuts because Washington doesn?t want to pay it back is not fiscal responsibility.? …Barbara B. Kennelly, President/CEO?Throughout this survey I was surprised at the lack of major differences, including through political demographic groups, where you would expect some differences. Republicans and Democrats alike understand there is a deficit out there and they don?t think Social Security is the cause of it.? Andrew Smith, Ph.D., Director, University of New Hampshire Survey CenterPoll highlights include:
- Only 2% of Americans believe Social Security is a major cause of the deficit with 77% opposing any changes in Social Security as part of a deficit reduction plan.
- Two out of three Americans (64%) think Social Security provides security and stability to our economy while only 20% see the program as a drain on the economy. 70% believe this recession underscores the critical role Social Security fills for families.
- Virtually all Americans polled (98%) believe Social Security funds belong to the people who contributed them and their beneficiaries and a majority (71%) say Social Security is a promise made to all generations that should not be broken.
?Next month, we will celebrate the 75th anniversary of Social Security, a national treasure that has only improved with age,? said Rep. Jan Schakowsky (D-IL), Co-Chair of the Congressional Seniors Task Force.?The poll released today shows that Social Security is cherished by the vast majority of Americans of all ages. They believe it is critical for their economic well-being and that its essential protections must not be reduced. I agree. The poll also made clear that the American public knows Social Security is not a contributor to today?s deficits. The program is not in crisis; while we will need to act ensure its solvency throughout this century and beyond, we can do so without making cuts in critical benefits.?Rep. Earl Pomeroy (D-ND) is Chairman of the Social Security Subcommittee and warned against efforts to cut or privatize Social Security benefits, ?There are those, even in the aftermath of the failed efforts by President Bush to privatize Social Security, who would take those changes right into the benefit structure today with a rationale of long term solvency without looking at other options. They never fully discuss that we are taking away the legacy of the program for our children.?Congressman Ron Klein (D-FL), a strong advocate for Social Security who represents over 130,000 seniors in South Florida said, ?Social Security is a contract we have with our seniors, and they have lived up to their end of the bargain. It?s essential that we live up to our end. That?s why I am here today to say that I will not stand for any attempts to weaken Social Security benefits for our seniors, or any reckless efforts to balance our nation?s books on the backs of our seniors.? The poll ?U.S. Attitudes Toward Social Security? is now available on the National Committee Foundation?s website.
Too Old to Work, Too Young for Social Security
When someone tells you it?s no big deal for Americans to work until they?re 70, chances are that person:(a) has an office job (b) earns income in the top-half of American wage earners(c) has access to generous health care coverage This is exactly the demographic that the the Social Security Administration and CBOsays has benefited most from two decades of longevity increases that far exceed what the rest of America has seen. These demographics also explain why the idea is so popular among six-figure income Washington politicians, bureaucrats, and think-tankers, including some members of the President?s Fiscal Commission. Not so much— among the rest of America.While higher income Americans may indeed be ready, willing and able to extend their work-lives to age 70…what about your 56 year old uncle who?s a mechanic (bricklayer, plumber, truck driver, waiter…you get the idea) who?s knees (or high blood pressure, stroke, Alzheimer?s, diabetes) will force an early retirement at 62? Unfortunately, it?s these working Americans who will pay the price for years of fiscal irresponsibility in Washington, if we raise the retirement age to 70 to reduce a deficit that has nothing to do with workers or their Social Security benefits.This is the topic of the latest video in our 75th Anniversary Celebration series ?Keeping the Promise?. Take a moment to watch and then share it with your friends and family.
What Does Raising Your “Retirement Age” Really Mean?
Nancy Altman, Guest Blogger
NCPSSM Foundation Board member, Social Security Works Co-Director and Author, “The Battle for Social Security: From FDR?s Vision to Bush?s Gamble”
Despite its name, Social Security?s statutorily-defined ?Retirement Age? has nothing to do with when people must or can retire. It is most accurate to think of Social Security as having a band of retirement ages. Benefits are adjusted depending on the age a worker chooses to begin to receive benefits, whether that age is age 62, age 70, or some age in between.If there were no adjustment, benefits claimed at earlier ages would be more valuable because they would be received for a longer time. The adjustments are as close as the actuaries can come to ensuring that the benefits have the same overall value, taking into account when a worker begins to receive them.Because of these actuarial adjustments, raising the ?Retirement Age? is indistinguishable from a substantial across-the-board benefit cut. Currently, ?Retirement Age?, which until 2000 was age 65, is gradually being increased to age 67. If Minority Leader John Boehner has his way, the ?Retirement Age? will increase to age 70. The chart below illustrates the impact of the current-law increase to age 67, and the proposal to increasethe ?Retirement Age? to age 70.
(You can also see the full-size chart here)
As the chart reveals, theincrease in the?Retirement Age? from age 65 to age 67, by itself, amounts to about a 13 percent cut in monthly benefits A worker aged 62 who would be eligible for $800a month, if the ?Retirement Age? were age 65, will receive only $700 a month, once the ?Retirement Age? is age 67. That same worker who waited until age 70 would receive $1400 a month if the ?Retirement Age? were age 65, but only $1240 a month, once the ??Retirement Age? is age 67.If the statutory ?Retirement Age? were increased to age 70, that change would constitute another 19 percent cut in benefits, for a total of around 30 percent. That same worker who would have received $800 a month, if the ??Retirement Age?? were age 65, would receive only $565 a month, if the ?Retirement Age? were age 70. If that same worker chose to wait until age 70, he or she would receive $1400 a month if the ?Retirement Age? were age 65, but only $1000 a month, if the ?Retirement Age? were age 70.Instead of the misleading debate over what the ?Retirement Age? should be, I believe we should be debating what we think an appropriate and affordable benefit should be. The average monthly benefit received by all beneficiaries is $1054 or $12,648/year. Given how low Social Security?s average benefit is, and the trillions of dollars that have been lost in 401(k) plans and home equity, we should be discussing raising Social Security, not cutting it further!
On the Radio
As part of our month-long commemoration of Social Security’s 75th anniversary, the National Committee will be running a radio ad campaign highlighting the program and efforts in Washington to cut benefits under the guise of “fiscal responsibility”. You can listen to our radio ad, whichhits the airwaves today, here:NCPSSM SocSec radio ad 07-13-10
Why is the President?s fiscal commission talking about cutting Social Security benefits to reduce the deficit when Social Security didn?t cause the problem?This is Barbara Kennelly.For 75 years Social Security has been a success. Millions count on receiving their modest benefit checks, now and in the future. Benefit cuts, including raising the retirement age, are the wrong solution for a fiscal mess Social Security never created.Go to the National Committee dot org to learn more.
Washington Disconnect
In stark contrast to the hype from Capitol Hill, the President?s Fiscal Commission, conservative think tanks and Wall Street economists, a risky proposal that would force older Americans to work longer, has been rejected by Main Street America. A new poll conducted by the University of New Hampshire Survey Center for the National Committee to Preserve Social Security and Medicare Foundation shows that 78% of Americans strongly oppose raising Social Security?s normal retirement age to 70.What is wrong with working longer?aren?t we living longer? Not all of us. Studies have shown workers with higher incomes who reach age 65 enjoy most of the increase in life expectancy. This is not surprising considering they are less likely to have physically demanding jobs and more likely to have high-quality health insurance coverage. In recent decades, the richest Americans gained nearly five more years of life expectancy, compared with only one year for those at the bottom of the income ladder. So when someone says, ?we are all living longer?, I?d suggest it?s clearly not that simple. The truth is the rich are living longer, the poor much less so, and whites vastly outlive other racial groups. A white female born today can expect to live to 80.6 years while an African American male can expect to live to be 69.7. In 1940, men who survived to age 65 had a remaining life expectancy of 12.7 years. For a 65-year-old man today, that projection has increased by just 5 years. This is not the longevity boom some in Washington would like us to believe as they try to sell Americans on raising Social Security?s retirement age.While many older workers may be healthy enough to work, jobs for them may simply not exist. I hear from seniors every day who?ve lost their jobs in this economy and can?t find another one. The Bureau of Labor Statistics confirms workers between ages 55 and 64 are unemployed much longer than their younger competition in the workforce as they fight for jobs in short supply. The Equal Employment Opportunity Commission saw a 33% increase in the number of age discrimination complaints in the past two years as seniors feel the pressure of aging in the workforce.For older workers in the elite classes of jobs, it?s easy enough to say– Americans should just work longer– but what about everyone else? Will our nation make the investment necessary to prepare for an older workforce? That seems highly unlikely in these troubled economic times.In addition to physical hardships, raising the retirement age even higher creates financial strains by forcing another form of a benefit cut. The normal retirement age is already rising to age 67. Raising it yet again will mean most workers who are forced to retire early at age 62 will see a cut in benefits of about 45%. The average annual benefit today is less than $14,000 ? cutting it almost in half will result in millions of today?s workers living out their retirement years in poverty; breaking the promise that has kept generations secure for 75 years.This post also ran in the Tennessean; Sunday, July 18, 2010
New National Poll Finds 78% of Americans Oppose Raising Social Security’s Retirement Age
The National Committee to Preserve Social Security and Medicare Foundation has released a new poll on American?s views on Social Security, proposals for raising the retirement age, and cutting benefits. The national telephone poll, conducted June 24-June 30th by the University of New Hampshire Survey Center, shows a growing disconnect between the average American?s economic priorities and those being debated in Washington.?These poll results aren?t a surprise for those of us who hear from Americans each day that Social Security has been their only lifeline during these tough economic times. From young and old alike, attitudes about the need to separate Social Security from the deficit debate are clear and should serve as a wake-up call to our nation?s leaders. Americans want fiscal sanity restored to Washington but they also know that Social Security didn?t cause this crisis and ignoring the promise made to millions of workers who paid into the program their entire working lives is not an option. The American people, of all ages and political persuasions have clearly said borrowing money from Social Security and then proposing benefit cuts because Washington doesn?t want to pay it back is not fiscal responsibility.? …Barbara B. Kennelly, President/CEO?Throughout this survey I was surprised at the lack of major differences, including through political demographic groups, where you would expect some differences. Republicans and Democrats alike understand there is a deficit out there and they don?t think Social Security is the cause of it.? Andrew Smith, Ph.D., Director, University of New Hampshire Survey CenterPoll highlights include:
- Only 2% of Americans believe Social Security is a major cause of the deficit with 77% opposing any changes in Social Security as part of a deficit reduction plan.
- Two out of three Americans (64%) think Social Security provides security and stability to our economy while only 20% see the program as a drain on the economy. 70% believe this recession underscores the critical role Social Security fills for families.
- Virtually all Americans polled (98%) believe Social Security funds belong to the people who contributed them and their beneficiaries and a majority (71%) say Social Security is a promise made to all generations that should not be broken.
?Next month, we will celebrate the 75th anniversary of Social Security, a national treasure that has only improved with age,? said Rep. Jan Schakowsky (D-IL), Co-Chair of the Congressional Seniors Task Force.?The poll released today shows that Social Security is cherished by the vast majority of Americans of all ages. They believe it is critical for their economic well-being and that its essential protections must not be reduced. I agree. The poll also made clear that the American public knows Social Security is not a contributor to today?s deficits. The program is not in crisis; while we will need to act ensure its solvency throughout this century and beyond, we can do so without making cuts in critical benefits.?Rep. Earl Pomeroy (D-ND) is Chairman of the Social Security Subcommittee and warned against efforts to cut or privatize Social Security benefits, ?There are those, even in the aftermath of the failed efforts by President Bush to privatize Social Security, who would take those changes right into the benefit structure today with a rationale of long term solvency without looking at other options. They never fully discuss that we are taking away the legacy of the program for our children.?Congressman Ron Klein (D-FL), a strong advocate for Social Security who represents over 130,000 seniors in South Florida said, ?Social Security is a contract we have with our seniors, and they have lived up to their end of the bargain. It?s essential that we live up to our end. That?s why I am here today to say that I will not stand for any attempts to weaken Social Security benefits for our seniors, or any reckless efforts to balance our nation?s books on the backs of our seniors.? The poll ?U.S. Attitudes Toward Social Security? is now available on the National Committee Foundation?s website.