GAO Finds Conflicts In Federal Retirement Age Incentives

Persuading Americans to work later could help shore up Medicare and Social Security, but the federal government now offers incentives for people to retire early.

Barbara Bovbjerg, a director at the U.S. Government Accountability Office, comes to that conclusion in an analysis of the signals that the federal government gives workers about when workers should retire.

The government is increasing the normal Social Security retirement age to 67, but the Medicare eligibility age is still 65, Bovbjerg writes in the analysis.

In addition, the rules governing private retirement plans encourage members of traditional defined benefit pension plans to retire about 2 years earlier than members of 401(k) plans and other defined contribution plans because the lifetime value of defined benefit plan benefits tends to begin decreasing for pension plan members who retire after age 60, Bovbjerg writes.