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New Social Security Retirement Age?

Social Security retirement ageThe short answer to the question is, no, there is not a new Social Security retirement age. Yet. The longer answer, and the topic that is already generating discussion, is whether or not Mr. Obama’s bipartisan commission on fiscal reform will decide that tinkering with the age at which retirees are eligible to receive benefits would be a great way to save money. Why are they even talking about this? Recent news that the lifespan of the average American has increased by five years over the past half century has resulted in the unintended consequence that Social Security retirees are drawing benefits earlier in life.

In a perfect world, who cares? The problem is that the financial condition of the United States is as precarious as it has ever been and, to avoid complete economic collapse, politicians are reluctantly accepting the idea that America might not survive as a country if we don’t tighten the belt where possible. However, mention the words “Social Security reform” in any adult living community or nursing home around the world and get ready for a violent backlash. The fact that older Americans tend to vote in larger numbers than younger generations that makes the idea of raising the Social Security retirement age a political hot potato that few elected officials have the stomach to touch.

But one thing you can bet on is that, should a higher Social Security retirement age be implemented, it will not apply to incumbent workers. We could debate the moral merits of this but the truth is that it simply seems unfair to tell a 54 year old worker that he must now wait until the age of 67, especially when he had been expecting to retire with full benefits at 60. Moreover, most states have laws on the books that expressly forbids tinkering with retirement ages for current workers. But what’s to stop the powers-that-be from pushing forward the retirement age by five years for the generations not working yet, and implement it in stages over the next four decades? Probably nothing will stop it because, like it or not, the Social Security and Medicare program are a combined budget buster and the increased longevity of Americans puts an even greater strain on a system already predicted to go bankrupt at some increasingly nearer point in the future.

Maybe not yet but soon 70 will be the new 65.

The Heroic Investing Team

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