If you figured you could retire at age 62 or 65, you may want to hear what an important group of business CEOs is now pushing: a plan to gradually increase the full retirement age to 70.
"The recommendations are based on what's best for the country," says Business Roundtable President John Engler. His group's plan would hike the full retirement age for both Social Security and Medicare to age 70, exempting anyone now 55 and older.
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"Implementing changes now and implementing them gradually over a long period of time realizes dramatic savings down the road without putting an impact on individuals," adds Engler.
Gary Loveman, chairman, president and chief executive of casino giant Caesars Entertainment, said in a statement: "America can preserve the health and retirement safety net and rein in long-term spending growth by modernizing Medicare and Social Security in a way that addresses America's new fiscal and demographic realities."
Wait a second. Do you hear anything here about bolstering anti-age discrimination laws?
As it stands now, anywhere from one out of five to nearly one out of three Americans in their sixties have health problems that curtail their ability to work. Yes, the jobless rate may be just shy of 6% for workers over the age of 55, but once older workers get booted they tend to have trouble finding a new job. According to a 2012 Government Accountability Office study, before the recession "less than a quarter of unemployed older workers were unemployed for longer than 27 weeks. By 2011, this number had increased to 55%.
Yes, the fiscal shortfall in entitlement programs is a very real problem. Social Security trustees project that the fund could be tapped out by 2037, paying just 80% of benefits thereafter. Social Security has promised $7.7 trillion more in benefits over the next 75 years versus what it can afford to pay from its payroll taxes, notes the Heritage Foundation. Deficits will begin in 2016, and continue indefinitely, it adds.
Meanwhile, life expectancies have gotten longer. A male born in 2004 can expect to live almost 10 years longer than one born in 1950, while women can expect to live nine years longer, Heritage says.
Congress has not changed the age at which workers can receive full benefits since 1983, when it was ratcheted higher, from 65 to eventually 67 in 2022.
But a study by the Congressional Budget Office found that hiking the federal retirement age to 70 would solve only about half of Social Security funding problem, but abolishing the payroll tax cap may wipe out much of the problem.