Social Security is not in the best financial shape. In the coming years, as baby boomers exit the workforce in droves, the program will see its payroll tax revenue shrink. That’s a problem, since that’s Social Security’s primary means of funding.
Social Security can tap its trust funds in the coming years to make sure it can keep up with scheduled benefits as its payroll-tax revenue declines. But once those trust funds run dry, benefit cuts may be on the table.
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Lawmakers are trying to avoid that, though, since it would cause a major hardship for current and future beneficiaries alike. And they’ve proposed different solutions designed to help keep Social Security solvent.
One such solution is to push back full retirement age, or FRA, from 67 to 68 or 69 for younger workers. FRA is when Social Security recipients can claim their monthly benefits in full.
The idea of a postponed FRA may not sit well with a lot of people initially. But here’s why it’s not such a bad thing.
Motivation to keep working
Many seniors inevitably end up approaching retirement with limited savings. And that’s a bad thing because retiring mostly on Social Security alone could make for a pretty cash-strapped existence.
The upside of postponing FRA beyond age 67 is that it might push more workers to extend their careers. And doing so might allow them to build more savings before tendering their resignations. Just as importantly, working a few extra years means getting to leave existing savings untapped for longer.
But it’s not just financial benefits to be gleaned from working longer. There can also be social and mental health benefits.
Many seniors find retirement to be an isolating and, therefore, difficult period of life. And it can be very jarring to go from a full-time work schedule to no schedule at all. Working longer puts off that adjustment and gives those nearing retirement more opportunity to ease into that change.
For example, someone who can’t afford to retire without Social Security might opt to work until age 69 instead of 67 if that’s their new FRA. But they might also choose to scale down their hours during that time rather than go from a 40-hour workweek to no work at all. That phased transition could be a much better way to approach retirement.
A change that’s by no means set in stone
Although lawmakers need to do something to address Social Security’s impending financial shortfall, pushing back FRA isn’t their only option. Lawmakers could instead raise the Social Security tax rate or impose taxes on higher incomes.
Right now, there’s a wage cap that cuts off Social Security taxes at a certain income limit. Lawmakers could raise that cap or eliminate it altogether so that all wages, no matter how high, are taxed for Social Security purposes.
But postponing FRA could actually benefit workers, even if that idea might seem like it’s apt to do the opposite at first. And for this reason, it’s not such an outlandish proposal.
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31 Comments
Here is why this would be a disaster and discriminate against blue collar workers. Sure if you have a cushy office job you could work to 70. If you could find a job usually 55 starts the kiss of death in corporate America. Most blue collar jobs this is a complete impossibility. My father was a brick and block mason his entire adult life after the Marines. He hit his mid fifties and it became impossible to lay hundreds of 150 pound block a day. He nearly killed himself trying. My uncle was a welder for 30 years until he couldn’t meet the precision tests any more as he aged. Most construction jobs the heavy lifting alone someone just can’t do at 67. These hardworking men get left with no job options except for a walmart greeter.
lets get real here FOOLS… THE ‘lawmakers’ U refer to ARE the GOP extremists who REFUSE to raise the SSI CAP from 140000/yr to PROTECT their WEALTHY donors. instead their age old mantra is to CUT or DELAY the working class their due benefits while the rich get richer. IF you’re a low/mid income worker in this country & vote for GOP — you are shooting yourself in the economic foot.
How about truck drivers, airline pilots, as the above replied, those who do heavy lifting or work. Not everyone sits behind a computer screen. Would you like your surgeon to be 70 before retiring. Some could be great. Some might not.
Its funny that those who have a non-technicial precision skilled or physically demanding job are trying to sell the reason why raising the FRA might be a good thing. First of all, being forced to work an extra year is not going to raise your monthly benefit that much that is will be a life changing financial decision. Secondly, you can already work passed FRA and work until age 70 and receive 108% of your FRA. Thirdly, retirement is isloation? Give me break, I don’t need to be forced to work a few more years to receive my FRA because I might feel lonely.
Those people who proposed, support this and the person who wrote this article and beleives this is a good idea should continue to work as long as they choose but don’t take away the benefits earned for us who want to be enjoying retirmeent by traveling, sleeping in etc after working 25 or 40 years of our lives and are in our 60’s and good health trying to enjoy live. NOT WORK OURSLEVES TO DEATH!.
It isn’t just the GOP, look at all the Dems in the House and Senate who collect their pay check while their aids do all their voting. Ruth Bader was probably dead on a ventilator long before her heart gave out, Dianne F died while still on the job. Fetterman and Biden aren’t fit for office, Mitch needs to go home and enjoy all the millions he stole while in Congress. When Congress men and women become millionaires while in office something is wrong. TERM LIMITS.
What about the invaders on your southern border Americans? They are getting a loaded debit card on entry with over $2,200 a month free medicare NO forced jabs and a plane flight or bus ticket to where ever they want. You guys not whining and complaining are perfect SUCKERS to the Biden economics. Russia Russia the enemy is within and giving YOUR money to Ukraine while your homeless and retirees suffer. YOU as a country of cowards and brain dead CNN watchers will get what you deserve. All of you low IQ know nothing morons that allow the destruction of our once wonderful country. Shamefull people and communist creeps from both side of congress raping and pillaging your money and coffers. Soon you will default on your debt and bring in the cashless society so they can control your money. You dumb shits will wake up too late and say ” What happened ” and the educated think for themselves people will say ” I knew it would happen” Kick those demonrats and RINO’s out and the warmongers who are making money on the side with YOUR money and killing ukrainians pure genocide YOU are paying for NATO terrorists and ZIONIST controlled country dual citizenship with Israel should not be allowed especially in your state dept. Too many of your finest have died for their wars. Dumb shit Americans and your keep them dumbed down gov and media