Aging Social Security
I was listening to Will Saletan on NPR’s Day to Day this afternoon discussing the impetus for setting the retirement age at 65 and, by extrapolation, estimating what that age should be today. Saletan concludes from reading the various reports released by the Committee on Economic Security that the key factor in setting the retirement age was based on the ability to work (or inversely the age at which people become dependent). By gaging the active life expectancy - defined as the time beyond retirement that a person could expect to lead a relatively healthy, active and disease free life - and comparing to today’s active life expectancy, he concludes that adjusted for improvements in health and life-style, today’s standard benefits should kick in at age 71 (with the caveat that the disability system continue to support those who are not able to work until this age). This is based on maintaining an approximate 8.8 years of active life post retirement. By most calculations, raising the age by 6 years (and continuing to raise the age as health improves) will solve any “crisis” that the system might otherwise encounter. The interviewer raised an interesting counter-point: shouldn’t we allow ourselves the luxury of a longer post-retirement active life? The interviewee responded simply that we should not do so at the expense of guaranteeing the system for future generations. Looking at this from a different perspective - we should allow ourselves to enjoy a longer healthy retirement so long as we have the capital to pay for it. If we can support our retirees for another year then by all means, set the age at 70. From this perspective, an additional 6 years of healthy retirement is not affordable. You can read the blurb and listen to the report from a link on Slate