In recent months the battle cry against Social Security has been “raise the retirement age.” As baby boomers, we don’t like to hear that. For most of us, working until age 70 is not appealing. How about a different view: lowering the retirement age.
Let’s start with the primary argument why raising the retirement age is the best answer for shoring up the shaky finances of the Social Security trust fund. That argument goes like this: Today, the average life expectancy for an adult in the U.S. is 78 years. When the Social Security Act was passed, the average life expectancy was 61 years. Therefore, because we are a healthier and better educated population, it is realistic to expect most Americans to work longer.
But consider this: Before Social Security retirement benefits became available in the 1950s, full retirement was something that only the wealthy could afford. Many elderly Americans in the middle class needed to work for an income. Work was often hard to find. There was no extended retirement leisure time for the middle class. They worked and then they died.
Fast forward to Social Security, and then to Medicare in 1965. Now you had many aging workers who could actually stop working to survive and find something else to fulfill them in the last third of their life. A genuine retirement was no longer just for the rich folks.
As Farrell puts it:
It was a major social and economic achievement of the 20th century. The richer a society becomes, the more people spend on health care, education, leisure and, yes, early retirement. That’s what wealthy societies do.
This suggests that the public policy goal should be to lower the retirement age to, say, 50-something. Again, that’s an age of retirement only the rich can afford. Why not create a comparable option for everyone?
To accept Farrell’s argument, you have to buy into the concept that retirement is a stage of life that everyone at all income levels should experience. In a way its analogous to saying that folks under 18 should have access to a K-12 education without having to work for it, not just those who can afford tuition. If the wealthy can stop working in their 50’s, why shouldn’t all of us?
Of course, I recently wrote about battles being fought in France and elsewhere about raising the retirement age. This fight is not over the principle of early retirement. It’s over the financial cost to the taxpayers.
One economist cited in Farrell’s article proposes that early retirement be phased in over generations, funded by mandatory savings accounts for every worker. For the lowest income workers, their savings rates would be boosted by taxes imposed on the wealthy. That’s a slippery slope, of course, but we are already on that slope with a myriad of refundable tax credits.
I don’t think any changes made in the Social Security retirement age will substantially affect baby boomers. But Farrell’s argument about the history of Social Security helps relieve me of any guilt I might otherwise feel about insisting that we receive our benefits as promised, in full and on time.
Here is the link to the article: Lower retirement age to 50-something