Raising retirement age to 69? Republican committee unveils new proposal for Social Security reform
The Republican Study Committee in the House is proposing to increase Social Security full retirement age by two years. Here’s how it could affect you.
If Social Security is going to continue to help keep seniors out of poverty by sending monthly payments to supplement their incomes into retirement, the program will need reform. There are basically two options on the table, increasing revenue or raising the retirement age.
If nothing is done to shore up the program it is estimated that the Social Security Trust funds will go insolvent by the year 2034. While payments would continue, there would be a 23% across the board cut to benefits.
Republicans want to raise the retirement age to 69
The Republican Study Committee in the House is proposing to increase Social Security full retirement age (FRA) by two years from 67 to 69. This proposal, which has been around for a while, would happen over an 8-year period and could potentially start for those turning 62 in 2027 according to the Center for American Progress (CAP).
Then every year thereafter the FRA would increase by three months, and the change would be fully phased in for those turning 62 in 2034. Opponents to increasing the retirement age point to a Congressional Budget Office (CBO) report that said the change would not alter the insolvency date of Social Security. It would also disproportionately affect younger workers and exacerbate economic inequality.
“Raising the retirement age is a benefit cut, as CBO has made crystal clear” said Senate Budget Chairman Sheldon Whitehouse in a statement.
Retirement age increase could cost future beneficiaries thousands of dollars
The CAP estimates that “an FRA of 69 would cut benefits for all new retirees between roughly 12.5 percent and 14.3 percent by the time it is fully phased in.” This would cost retirees thousands of dollars per year in lost benefits.
The current penalty for retiring at age 62 would jump from 30% to 39% if the FRA were pushed back to 69, but a median-wage retiree turning 62 in 2034 would have their monthly benefit cut no matter at what age they chose to claim Social Security.
The monthly reduction to their benefits would be between $345 at 62 and $741 at 70, the current maximum retirement age. That would add up to between $4,140 and $8,892 after just one year.
Over ten years, taking into account cost-of-living adjustments that could end up being between over $46,000 and close to $100,000 in lost benefits.
The changes would affect over 245 million American workers, or almost 3 in 4 people in the country.
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