Should the U.S. raise the retirement age?
67 years old. Those of you around that age and reading this are probably well aware of the significance of that number: that’s the official retirement age for Social Security — basically the age where you can receive full benefits.
But there are some who think that age needs to increase — most recently, Larry Fink, the head of BlackRock, the largest money manager in the world. Fink made that suggestion in an investor letter Monday, arguing that because of longer life expectancies, we should maybe think about pushing the retirement age higher.
The official retirement age hasn’t really been touched since the early 1980s, and the economy has changed a lot since then.
The first official government retirement age dates back to the late 19th century, when Germany introduced the first version of Social Security to the western world. Before penicillin or the polio vaccine, German seniors had to wait until age 70 to stop working and get benefits. So should we at least match that retirement age?
“There is definitely a segment of society for whom having 70 as the required age would be appropriate,” said Alicia Munnell, who heads the Center for Retirement Research at Boston College. “But if you’re working in construction, clearly, your body begins to fail in your 50s.”
Munnell says raising the retirement age would disproportionately hurt people of color and individuals without a college education who fill blue collar jobs.
And while technology has made white collar work physically easier, it could make keeping your job harder.
“Some people say the computer and economic progress have made jobs easier in your 60s. But they also made skill obsolescence faster,” said Teresa Ghilarducci, an economist at the New School.
Still, something does need to be done about Social Security — it’ll start running into serious money problems in a decade if neither benefits nor revenues change. Economist Jonathan Gruber at MIT says he’d prefer to see a system where retirement age varies by income.
“People who are sufficiently high income, should be expected to work longer and get less in the system,” Gruber said. “People with physically demanding jobs and low income should be able to retire earlier.”
That could be a tough political sell though.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
