Retirement Age Hike?

[ShokWaveRider]

Not sure if this is the correct forum but here goes.

I listened to a long discussion on NPR yesterday regarding GubMent plans to increase the retirement age over time. The next hike would be to 67 (as opposed to 66 today). This is the age at which one would receive full SS benefits (as opposed to higher benefits at 70 or minimal at 62).

Is this true?
Any idea when it will be in effect, or at least the proposed effective date?
Will it apply to ALL persons or just those under a specific age at inception?

This could make a significant difference to one's retirement planning.

 

[REWahoo]

If you heard it on NPR it must be true.

 

[Walt34]

If you were born after 1960 then yes, SS FRA is 67.

Full Retirement Age: If You Were Born In 1960 Or Later

 

[growing_older]

This is already true. There's talk of raising in higher in a similar phased in fashion, but for people age 53 and younger full retirement age for Social Security is already 67.

 

[rbmrtn]

That was part of the 1983 SS amendments

Increase in Retirement Age

 

[GrayHare]

SS's full retirement age has not kept pace with longevity increases. When SS began, the average life expectancy was less than 5 years past full retirement age. Now that number is closer to 15. IMO something more than 5 years and less than 15 would be a fair SS average coverage duration.

 

[Katsmeow]

SS's full retirement age has not kept pace with longevity increases. When SS began, the average life expectancy was less than 5 years past full retirement age. Now that number is closer to 15. IMO something more than 5 years and less than 15 would be a fair SS average coverage duration.

This is not really correct. Even at that time life expectancy at retirement well exceeded 5 years. Average life expectancy at birth was indeed much lower when SS passed than it is now. However, this is because more children and younger people died at younger ages.

In 1940, average remaining life expectancy at 65 was 14.7 years for females and 12.7 years for males.

In 1990, the average remaining life expectancy for males at 65 was only 15.3 years and was 19.6 years for females.

Social Security History

AS of 2010, CDC says life expectancy for males at 65 is 17.7 years and is 20.3 years for females.

So, in 70 years the increase has only been 5 years for males and 5.6 years for females.

http://www.cdc.gov/nchs/data/hus/2011/022.pdf

 

[braumeister]

So the life expectancy increase has not been keeping pace with the CPI?

No wonder we're in such a mess!

 

[seraphim]

Deleted. Post didn't look as humorous as I thought it would be lol

 

[donheff]

I am watching House of Cards where they are voting on a 68/64 package. Senate has passed but it looks like it is going to get hung up in the House. I won't know until the next episode.

 

[Animorph]

If they keep the age 62 and age 70 boundaries, increasing the FRA is just an across the board benefits cut. Not a lot of relevance to any actual retirement age.

 

[Chuckanut]

If they increase the retirement age they also need to 1.) adjust traditional working systems to allow older people to continue working - especially true in the more physical jobs, and 2.) toughen up enforcement of age discrimination laws. Otherwise they will simply transfer the payments from the SS system to the welfare systems.

 

[jebmke]

If you were born after 1960 then yes, SS FRA is 67.

Full Retirement Age: If You Were Born In 1960 Or Later

So it even impacts you if you were born yesterday?

 

[Walt34]

So it even impacts you if you were born yesterday?

By 2081 they'll probably have raised it again.

 

[Gumby]

So it even impacts you if you were born yesterday?

I wasn't born yesterday. That's just when I fell off the pumpkin truck.

 

[jebmke]

I wasn't born yesterday. That's just when I fell off the pumpkin truck.

Must be regional differences. When I was growing up in the midwest it was a turnip truck.

 

[Al in Ohio]

In New England it was the lobster boat.

 

[Big_Hitter]

Age 65 was set as Germany's national retirement age in the late 1890s (or something like that) by Otto von Bismarck when life expectancies were in the 50s.

SS glommed on to the age 65 concept in the 30s and it has stuck ever since. As a nation, we are living a LOT longer than ever.

In fact, most actuaries use generational mortality projections to calculate pension liabilities for corporate balance sheets, etc. Depending on your date of birth (the later you were born the longer you are expected to live); for example a life expectancy for a male aged 50 today is age 84 using a standard table and standard projection scale.

So just due to longevity risk, paying for a traditional defined benefit pension (in either the public or private sector) is much more expensive now than it was 30 years ago.

 

[robnplunder]

Delaying FRA does not make those people (early 60s) more employable.

 

[2B]

Age 65 was set as Germany's national retirement age in the late 1890s (or something like that) by Otto von Bismarck when life expectancies were in the 50s.

I think that this was for retirement from the Prussian army. It was to give soldiers "hope" that their enlistments weren't for "life." Of course, I suspect few made it that long.

 

[Al in Ohio]

The statement " we are living a lot longer than ever " gets tossed around quite calously these days. Over 50 years ago the life expectany of a man in 1960 was 66.6 and now its 76 in the US for a man. Thats signifigant, but not huge. If full SS retirement payments are geared to pay out at 67 now that accounts for a 10 year retirement before death. In 1960 you would have died first! Obviously major adjustments have been made, hence the health of SS is not bad, but some adjustments to perhaps how COLA is factored need to be made to keep it sustainable beyond 2033.

 

[Big_Hitter]

first of all, life expectancy depends on current age, it's not the same number for everyone

second of all, it's not thrown around callously, it's fact - you may want to check out the latest mortality study done by the society of actuaries at www.soa.org for some light reading

IMO, we need to move away from the age 65 paradigm, sooner rather than later

 

[Big_Hitter]

0% interest rate annuities approximate life expectancies and they vary greatly between older and newer mortality tables

 

[Al in Ohio]

You have to talk in terms of average baseline actuarial age values, the facts if which I stated from current SSA actuarial tables.

 

[Big_Hitter]

do you have a link to said tables?

or are those the ones used to calculate post 70.5 distributions?