The American Academy of Actuaries today said the United States should strengthen the Social Security old age pension system by increasing the normal retirement age.
Raising the normal U.S. retirement age to 70 could cut the projected Social Security program deficit in half, the AAA, Washington, argues in new position statement.
“As life expectancy increases, the percentage of workers’ lives spent in retirement continues to grow, while the number of working years stays relatively constant,” the AAA, Washington, says in the position statement. “Inevitably, Social Security’s costs will exceed what its scheduled financing will support…. While Social Security’s financial soundness could be restored in many different ways, we believe that any solution package should include increases in the retirement age.”
Simply speeding up an ongoing effort that is increasing the normal retirement age for Social Security to 67, from 65, one month at a time could cut the projected program deficit 10%, according to AAA projections.
Keeping the current schedule of normal retirement age increases to age 67 – and then continuing to increase the normal retirement age by 2 months every year until it reaches age 70 – could cut the projected deficit 50%, the AAA estimates.
The AAA contends that the demographic problems facing Social Security appear to be permanent, not simply a temporary effect of the aging of the baby boomers.
“Long after all the baby boomers living have departed, Social Security’s income will cover only about three-fourths of its cost,” the AAA says.