Proposal to Raise Social Security Age Is Criticized – Insurance News

Raising the retirement age is just another way of saying “cut Social Security,” the executive director of a Social Security advocacy group said following a congressman’s recent proposal to raise the full retirement age.

“It is a 7% reduction in benefits for each year the age is increased, including working until age 70 or beyond. That’s thousands of dollars out of the pockets of people who live paycheck to paycheck and rely on their earned benefits to pay for groceries, medicine and their heating bills,” Alex Lawson, executive director of Social Security Works, told InsuranceNewsNet.

Last week, Congressman Mark Alford, R-Mo., proposed raising the retirement age to reduce federal government costs. The congressman told Fox News that Republican members of Congress recently sat down with Elon Musk and Vivek Ramaswamy, who will lead the unofficial Department of Government Efficiency under President-elect Donald Trump, to look for ways to “cut the budget.”

“I think there’s a possibility: If people are living longer and retiring later, we can initially push the retirement age back a little bit,” Alford said.

The current full retirement age is 67 for people born in 1960 or later, and is the earliest age at which workers can begin receiving Social Security benefits without incurring financial penalties for early claim.

Impact of the questionable increase in the retirement age

Lawson rejected Alford’s suggestion that raising the retirement age would cut the federal budget.

“Rep. Alford reasons that “people are living longer,” but most Americans are not living longer. He also justifies this by pointing to the federal debt, but Social Security doesn’t contribute a dime to the deficit, as President Ronald Reagan declared long ago.

“We are the richest nation in the history of the world. It is completely unnecessary and deeply immoral to force nurses and firefighters to work into old age. Instead, it is long past time for the wealthiest Americans like Elon Musk to pay their fair share into Social Security.”

Alford’s office did not respond to a request for comment from InsuranceNewsNet.

The congressman’s announcement isn’t the first time Republicans have proposed raising the retirement age.

The GOP proposal included cuts to Social Security

In March, the Republican Study Committee released its fiscal year 2025 budget proposal, which included cuts to Social Security.

One policy that has featured consistently in the RSC’s budget proposals for years is raising the full Social Security retirement age. The RSC plan would raise the full retirement age to 69, resulting in benefit cuts for the vast majority of Americans.

According to an analysis by the Center for American Progress, a full retirement age of 69 would reduce benefits for all new retirees by about 12.5% ​​to 14.3% by the time full retirement earned $70,000 in 2022 and will be in the year 2034 thousands of US dollars per year.

The size of the benefit reduction in relation to receiving full benefits depends on the age at which someone is eligible for Social Security, the analysis says.

For example, under current law, someone who claims Social Security at age 62 will face a maximum penalty of 30% on monthly benefits to compensate for the fact that the individual will receive payments months or even years before their peers in the same birth cohort would Who can choose to wait to receive benefits? Raising the full retirement age to 69 would increase that maximum penalty from 30% to 39% and reduce benefits by nearly 13%.

The Center for American Progress said that because of the timing of the phase-in, while those who turn 62 before 2027 would be spared from the RSC plan’s benefit cuts, everyone else would suffer. Almost three in four Americans – more than 245 million people in total – would be affected by raising the full retirement age. The center said both the total number and proportion of Americans affected would only increase over time.

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Susan Rupe is managing editor for InsuranceNewsNet. She previously served as communications director for an insurance agent association and was an award-winning newspaper reporter and editor. Contact them at (email protected).