Retirement Age Stars In Soc. Sec. Debate

Prominent Group Of Actuaries Say Raising Retirement Age Necessary With Longer Life Spans

(AP)  Want to keep Social Security from going bankrupt? Make future recipients wait longer for their first benefit check because they probably will live longer anyway, an influential group of actuaries says.

The next president and a new Congress will come under increasing pressure to act to fix the Social Security system. Democratic presidential candidate Barack Obama rejects any increase in the retirement age while his GOP rival John McCain opposes tax increases as a possible fix.

The American Academy of Actuaries, which advises policymakers on risk and financial security issues, wants any potential solution the White House and lawmakers might consider to include raising the retirement age from the current range of 65-to-67-years-old. The group provided The Associated Press with an advance look Thursday of its recommendations.

Current benefits are supplied by payroll taxes from today's workers, all of whom pay a 6.2 percent Social Security payroll tax on income up to $102,000. Their employers match it, for a total tax of 12.4 percent. The tax applies only to earned income, not to passive income such as dividends and interest.

Benefits are projected to exceed the Social Security system's tax revenues in about nine years. The program's trustees have said the Social Security trust fund will be depleted by 2041 without changes.

A major problem, the actuaries say, is that people are living longer. That means they are drawing more money from the program.

When Social Security started in 1935, the average American's life expectancy was just under 60 years, according to the Social Security Administration. By comparison, people now eligible for Social Security can expect to live on average a little past 76, the agency says, "meaning workers have more time for retirement and more time to collect Social Security."

For many years, 65 has been the retirement age to receive full benefits. But under changes in 1983, only people born before Jan. 2, 1938, can collect full benefits at 65. Those born after that date face a gradually rising retirement age for full benefits until it reaches 67.

Current estimates show that by 2040, 65-year-old men and women could live at least 18 more years after becoming eligible for full Social Security benefits.

"You just can't have people living longer and longer and longer, and have the program with a frozen normal retirement age of 67. It just doesn't make sense," said Bruce Schobel, the chairman of an academy task force on retirement security principles. "Eventually people will have a larger and larger proportion of their lives spent in retirement until you reach the point where we just can't afford it."

The academy is not staking out a position on when people should retire and acknowledges that saving Social Security will take more than just raising the retirement age.

"All that we're suggesting is that some increase in the retirement age should be part of any package," Schobel said.

Obama already has rejected such advice. "We will not raise the retirement age," Obama said in June at a campaign event in North Carolina.

Obama has, however, called for a Social Security payroll tax on incomes above $250,000 a year, compared with the current $102,000 threshold.

"Barack Obama is opposed to raising the retirement age. He believes we should strengthen Social Security while protecting the middle-class families that rely on it," said Jason Furman, Obama's campaign economic policy director. "To that end, he would like to work with Congress on a plan to ensure that people making over $250,000 pay a little more to strengthen this vital program for generations to come."

McCain originally said everything was on the table to fix Social Security. He recently has amended that position, saying he would not increase payroll taxes. "I want to look you in the eye: I will not raise taxes or support a tax increase," he told supporters Wednesday.

Former Texas Sen. Phil Gramm, who served as a McCain adviser until he resigned earlier this month, told The Washington Times this month that a bipartisan deal to save Social Security might include raising the retirement age to 70 over 30 years.

Stop spending SS money on illegal aliens and their families. Stop paying money on fakes, who get their children to act retarded so they can collect money before their even an adult. Stop disability to fakes, but pay for real disabilities. Stop loaning SS money to the government. Make the Fed Gov repay all the past loans, at 18% just as we have to pay. If that bankrupts the Fed Gov then change the way the Feds run things.

[shippg-2009]

There should be no caps, but also no graduated tax for the rich. 6% flat rate should be sufficient.

The SS account should be dedicated to SS only. It is not a cookie jar.

[babooph]

If the rich paid in, no benifit would be cut.

[deacon20081]

Cut out the benefits paid to illegal aliens, step number 1.

[babooph]

Cut military spending in half & we can retire at 50-no one ever wanted to attack us & get our retired people.The military spends much on Israel support-stop that & we need much less military & Islamics calm down too.

[buddysmomo1]

why not pay back too social security the money taken out of it too build those buildings like the strom thurman building in columbia ,sc with that so-called art structure that cost if i remember right 100,000 i never could see where art was involved the money has never been repaid and seniors are made too feel like dirt because they want a retirement out of the money taken out of their paycheck everypayday and we do not even get credit for all that was taken out

[lloydbest1]

"Posted by Element51
By removing the cap it sounds like you want other people to pay for your benefits...." Posted by rhs648 at 04:38 PM : Aug 01, 2008

Why not? Element51 has been paying for other peoples'' benefits for however long (s)he has been paying into the system. So have I. In fact, you are paying for other peoples'' benefits right now, even as you read this rebuttal.
When all three of us retire, other people will be paying for part of our benefits. Some of your retirement income will be footed by folks entering the workforce; some of whom, in fact, earning more than you do.
As much income as your tax bill implies, I have to disagree with your assertion that benefit caps also be removed. Part of my reasoning goes back to a concept called Noblesse Oblige. Simply put it means from those who have much, much is required. Specific to this example you are (or should be!) putting enough money into a private account to fund a very comfortable lifestyle upon retirement, with out the the additional income you might be getting from a removal of benefit caps. In any case, we are seeing far too much "Noblesse" in recent years and not nearly enough "Oblige".

[wl7bzh]

The government plan for a slush fun backfired when the baby boomers lived longer than they were supposed to.

Guess they just couldn''t get us involved in enough wars-that is the pattern, economic crisis then start a war to divert attention and reduce population. But then the middle east scrap ain''t over yet.

[tryhonesty]

RepubliCONs have tried to distroy Social Security from its creation. Period. The Greedy OLD Party (GOP) wants the very 1-3% of the richest people in America to rule the world. If the RepubliCON war mongers can waste a trillion dollars or more on stupid wars, they can afford to pay for a first class social security system for Americans!

[rhs648]

It''''s time to remove the cap and require everyone to pay in to social security. As it is now, there are many who make way above the cap and then are elgible to draw the max amount when they reach retirement age. John McCain is a good example. Check out how much he is drawing in social security added to his Senatorial salary and his military retirement. It will surprise you. I was shocked when I learned that he was getting social security. If I go back to work they take mine away but I guess there is a different system for politicians. If government will keep it''''s hands off the system and they eliminate the cap there will be no problem.

Posted by Element51

By removing the cap it sounds like you want other people to pay for your benefits. I already pay around sixty thousand dollars per year in stare and federal taxes. Enough already. Let the people who receive the most benefit pay more. If you are going to remove the cap, remove the cap on how much we will receive back. It should be proportional to what we put in.