Raising the Social Security Retirement Ages: Weighing the Costs and Benefits

The Social Security program faces a long-term funding deficit. The Board of Trustees of the Federal Old-Age and Survivors and Disability Insurance ( OASDI ) Trust Funds predicts that unless corrective action is taken, Social Security benefit payments will exceed dedicated tax revenues by the year 2015, and the Social Security program will become insolvent—unable to pay promised benefits in full-by the year 2037. As a result of this projected deficit, Social Security has become a lightning rod for far reaching reform proposals. Proposals range from traditional proposals that would maintain the basics of the program\u27s revenue and benefit structure but would alter the program\u27s specifics, such as raising the normal retirement age or increasing the taxable wage base, to proposals that would fundamentally restructure the system. This article addresses one of the most popular of the traditional reform proposals: raising the retirement ages. The Article begins by reviewing the legislative history of the Social Security retirement ages to determine how Congress selected the current retirement ages. It finds that there is no scientific or gerontological basis for the retirement ages; rather, in selecting the retirement ages, Congress has considered a wide range of factors, ranging from cost to life expectancy to ability to work and find a job. The Article then weighs the costs and benefits of raising the retirement ages. It first discusses the two principal benefits of raising the retirement ages: (1) raising the NRA would reduce the long-term deficit in the Social Security trust funds; and (2) raising the NRA, particularly if accompanied by an increase in the EEA, would promote general economic gains. It then addresses the three principal costs of raising the retirement ages: (1) raising the retirement ages would constitute a cut in Social Security benefits; (2) raising the retirement ages could increase the risk that some older workers end their lives in poverty; and (3) raising the retirement ages could have a more substantial adverse impact on some subpopulations, such as blue-collar workers, lower-income workers, blacks, and Hispanics, than on other subpopulations, such as white-collar workers, higher-income workers, and non-Hispanic whites. The Article concludes that Congress should give serious consideration to raising the Social Security retirement ages. There is no magic solution to Social Security\u27s long-term problems; it requires tough choices. Raising the Social Security retirement ages could help solve the long-term deficit, and if accompanied by other changes, such as a reduction in the age at which Supplemental Security Income ( SSI ) aged benefits are available or a loosening of the Social Security disability rules for older workers, the adverse impact on subpopulations particularly vulnerable to poverty in old age could be reduced though perhaps not eliminated