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Social Security concerns: What age do Americans think it is best to retire?
With the full retirement age creeping up and life expectancy falling, less and less people are getting to experience their ‘golden years’ of retirement.
Retirement is a significant milestone in life, and Americans have varying opinions on the ideal age to retire. The current retirement age in the United States is gradually increasing, with full Social Security benefits available at age 67 for those born in 1960 or later.
In recent years, there has been a growing trend towards increasing the retirement age to address the financial challenges posed by an aging population. The US Congress has already raised the age for required minimum distributions (RMDs) from retirement plans to 73.
A recent survey conducted by Atticus found that 37% of working Americans are uncertain about their ability to retire, with Gen X (39%) and millennials (38%) being particularly concerned.
Thus, the survey also found that many workers are planning to delay retirement. A significant proportion of Gen Xers (69%) and baby boomers (55%) expect to continue working beyond their planned retirement age.
This trend is likely driven by concerns about financial preparedness, as 3 in 4 Gen Xers and 58% of baby boomers do not believe Social Security will be able to provide for them in retirement. Current issues in Congress would suggest they are right.
Worries for Social Security ahead
Congress has been actively discussing proposals to increase the retirement age for Social Security benefits. The Republican Study Committee (RSC) recently released a budget proposal that calls for “modest adjustments to the retirement age for future retirees to account for increases in life expectancy.”
This plan aims to address the insolvency of the Social Security trust fund, which is projected to be depleted by 2034 if no action is taken.
What it means for Social Security to be depleted
Officials say that Social Security is likely to deplete the Old-Age and Survivors Insurance (OASI) Trust Fund reserves and run out of money to pay beneficiaries in full in 2033. Afterwards, taxes will only be able to pay for approximately 79% of scheduled Social Security benefits.
This check is the main source of income for most people over the age of 65.
The RSC proposal would increase the full retirement age to 69, as well as include $1.5 trillion in cutes. President Joe Biden has strongly opposed the proposal, stating that he will stop any attempts to cut Social Security benefits or privatise the program.
As these discussions will continue in the build-up to the November election, it is important to note that real retirement is getting shorter and shorter. Between 2019 and 2021, total US life expectancy decreased by 2.41 years, falling from 78.85 years to 76.44 years. Should the retirement age be pushed to 69, that would mean just seven years of retirement.