Why Raising the Retirement Age Is a Lousy Idea
One proposal for cutting the federal deficit that has received support from Republicans and Democrats alike is raising the retirement age. Sen. Richard Shelby, R.-Ala., even favors periodically increasing it "every few years."Labor economist Teresa Ghilarducci argues persuasively that this is a terrible idea:
Raising retirement ages is not a good policy and support for it is based on two wrong assumptions: one, that people can and should work longer and, that two, society cannot afford to pay for retirement because pensions and health care spending for the elderly take too many resources away from younger people.
She also makes this vital point in rebutting the blithe assertion that, with people living longer, it's only natural that people put off retirement: Shrinking pensions and patchy health care coverage is already forcing people to retire later.
Research suggests that employees who earned between $31,200 and $72,500 will have to work to age 72 to have a 50-50 chance of having enough money to cover their basic retirement needs. Those with income of $11,700-$31,200 will have to work until 76. Only people earning more than $72,500 have a 50 percent of quitting work at 65 (the age at which a person born in 1937 or earlier many collect full Social Security benefits) and being able to afford their golden years.