Wednesday, March 2, 2011

Should We Extend the Retirement Age?

     If you read a newspaper or magazine, or watch TV news, you can't go five minutes without seeing a warning about the burden of 70-some million Baby Boom retirees that looms over the Social Security system. The financial crisis, great recession, ballooning federal budget deficit -- and now soaring oil prices -- have only seemed to make matters worse.

     One suggestion for solving the problem is to extend the retirement age. In fact, the retirement age has already been increased for anyone born after 1938 -- which means most of us. For those born between 1943 and 1954 (including me) the full retirement age for Social Security is 66. For people born after 1954, the retirement age increases by two months per year, until it reaches 67 for those born in 1960 or later.

     Now there have been calls to increase the retirement age even more. To 68, or even 70. House Majority Leader John Boehner has said, "We're all living a lot longer than anyone ever expected, and raising the retirement age to 70 is a step that needs to be taken."

     It's not just conservative Republicans. President Obama's deficit reduction commission also called for raising the Social Security age. They are proposing 69. Other experts have chimed in, including former deputy commissioner of the Social Security Administration Andrew Biggs. The American Academy of Actuaries has also come out in favor of extending the retirement age.

     I can see the logic of the proposal. After all, we are on average living longer than the retirees of the 1930s, when the retirement age was set at 65. In 1940, the average 65-year-old person lived 12 more years. Today, the average 65-year-old retiree can expect to live another 18 years. That's a big increase -- 50 percent. Social Security was meant to provide a safety net to elderly people for the last few years of their lives. It was never meant to finance a retirement lasting 20 or 30 years.

     Here's the problem:  It works in theory, but not in real life.

     In real life, many people find it difficult to work past the age of 60, let alone 65. If you've got a physically demanding job, it can get pretty rough. Do you think it's a good idea for 65 year olds to be climbing ladders or lifting heavy construction materials?

     What about office workers? You'd think it's not physically demanding. But I was an office worker, and by the time I retired I had bulging discs in my neck from sitting behind a desk for 30-some years, and carpal tunnel syndrome from working a keyboard for 30 years.

     Even some professionals. Do you want a 70-year-old surgeon with shaky hands operating on your brain? Or even a 70-year-old plumber trying to bend and twist his way under your kitchen sink so he can fix a leak?

Pres. Obama with Commissioners Bowles & Simpson
     And then there's the other side of the equation. Many people are ready and able to work into their 60s and beyond, but their companies don't want them. Corporations often ease out workers in their 50s, because their salaries have increased with seniority and they're perceived to be not as efficient, and maybe they have higher health costs, and besides, some 30 year old will do the job at half the price -- even if the younger person doesn't do as good a job, it's good enough.

     Employers are not supposed to discriminate on the basis of age. But you know damn well they do -- they just hire a few lawyers to muddle the situation.

     You can find plenty of retirement advice suggesting to Baby Boomers that they work a few extra years in order to make up for any lack of savings. "Stop Saving So Much for Retirement" suggests you spend more money on cruises and other indulgences -- then, to make up for it, just work until age 70 instead of retiring at 62.

     That's fine if you happen to have a job that doesn't tax you either physically or emotionally. And if you work for a company that's happy to have you stick around until you're 70. But who has that option? Maybe lawyers and accountants; certain corporate managers and government employees; people who work for a family business. But it's not an option for most of us.

     A report from federal government auditors points out that raising the retirement age would "create a financial hardship for those who cannot continue to work because of poor health or demanding workplace conditions." Adds David Certner of the AARP, "Some people just can't continue to work beyond age 62 for either health reasons or they're just not able to find jobs. Just because we tell people they should work longer doesn't mean there are employers willing to hire people."

     Under current conditions, the people who find it convenient to work longer are the very people who have better, higher paying jobs. This means extending the retirement age will make the rich richer, and the poor poorer. I don't think we need more of that in this economy.

     If we're going to extend the retirement age -- and I agree there's a legitimate argument to do that -- then we have to change our entire business culture. Corporations will have to stop forcing out workers in their 50s. Employers will have to offer legitimate retraining. More job sharing. More part-time work. More workplace flexibility. And perhaps most of all, a change in attitudes -- that it's okay to slow down, take less pay, perform an easier job, and find value in older workers' skills, perspective and experience.

     Until then, let's keep the retirement age at 67.


Linda Myers said...

Job sharing and part-time work sounds like a good idea.

June said...

On paper, logically, it makes sense. Yer abs'lootly right about that. But I've been working since I was fifteen, and if I have to keep working until I'm 70, I'll just string myself up right now.

Hope said...

Ya know, I'm getting really close and I'm really hoping they don't switch up that retirement age for those who are within 10 years. Change the rules for someone who's a lot farther least they'll have a chance to save more in those years. Because it's always about our own rice bowl, isn't it? :)

Sightings said...

June, pls. don't say that, you might give those budget-cutters an idea!

Anyway, I don't think anyone is thinking about changing the rules for people born before 1960 -- those have already been changed. It's people under age 50 who may have to work past 67 to get full SS benefits.

Deb said...

I agree with Linda, job sharing and part time work may be the answer. Revamping healthcare so that it can be much more affordable is also key. I'm 49 and do desk work, my hands & wrists ache from so much computer work and I have ganglion cysts the size of marbles. The thought of having to work until I'm 70 is very bleak.

Retired Syd said...

What a well balanced discussion you posted on the topic. I have to admit, I was a supporter of raising the age for those decades away from retirement that still have time to plan around the change (like I did when the age was changed to 67 for my cohort.)

I think I find the arguments you raised against it even more compelling, though. What to do about the basic fact of aging. We are living longer, but no one has yet figured out how to stop the aging process, as optimistic as we boomers are about that!

MerCyn said...

Few people work for one company there entire work life. I think people have to start thinking about not just more than one job but more than one career. Second and third careers can be less physically demanding, and perhaps offer more satisfaction and a bit less money after we have raised our families. Healthcare basics for all would help a lot too.

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fiftyodd said...

Yep. Here in South AFrica, our retirement age is generally 65. I agree with all of the above. For comparison, at the moment in SA we have an unemployment rate 0f 42% in the 18 - 30 age group and 48% of our National Budget goes to public servants' salaries. This year they want a 10% increase plus housing subsidies etc etc. Our politicians spend lavishly on overseas trips -the latest has been a delegation to New York of 49 people (most countries sent 3-4 delegates) to the Commission on the Status of Women." Only 4 could be accredited - what did the rest do? Many of the party stayed at The Ritz Carlton on Central Park and most attended no sessions. All travelled Business Class. Such is the "New South Africa".