One way to reform Social Security might be to increase the minimum early retirement age to 63, from the current minimum of 62, according to U.S. Treasury Department researchers.

Policymakers also could increase the normal retirement age or change early retirement deductions and delayed retirement credits, the researchers write in an analysis of proposals for bringing Social Security obligations into better alignment with revenues.

For policymakers who want to help close the $14 trillion gap by making higher-paid workers pay more in terms of increased taxes and decreased benefits, one challenge is eliminating or reducing financial incentives for the higher-paid workers to stop working and start collecting Social Security, the researchers write.

The researchers note that increasing the normal retirement age or early retirement age could be especially effective at changing behavior, because the retirement age cut-offs appears to have a psychological effect as well as a practical effect on workers.

In the real world, “21% of male members of the 1935 birth cohort began collecting benefits within 1 year of reaching the normal retirement age…while only 13% began collecting benefits during the preceding year and less than 1% began collecting benefits during the year that followed,” the researchers write.

But the researchers note that workers may tend to retire at age 65 more because that is because that is when they become eligible for Medicare than because of any psychological effect of setting the normal retirement age at 65.

One strategy for reducing the Social Security funding gap would be “making Social Security’s net tax rates on earnings in potential retirement years lower than in earlier years, and changing the design of couples’ benefits so that spouses with substantially unequal earnings face more similar tax rates,” the researchers write.

That type of reform would improve work incentives, lead to greater work effort and higher incomes, and lessen the sacrifice necessary to make Social Security solvent, the researchers contend.

The government also has to reassure workers that it really will set aside Social Security for Social Security benefits, the researchers write.

If the government simply spends the Social Security revenue, “the additional spending must ultimately be financed with either higher future non-Social Security taxes or smaller future non-Social Security spending,” researchers warn. “Work effort would be discouraged to the extent that the finance source is higher future taxes.”