Raise age to retire?

The idea is being bandied about as Congress explores Social Security financing

Author: Jane Norman

Published: May 13, 2005

Members of Congress probed Thursday whether an increase in the retirement age might plug at least part of the Social Security shortfall.

House Ways and Means Committee Chairman Bill Thomas, R-Calif., asked at a committee hearing on Social Security whether Congress should "continue to chase the age change," as he questioned a tableful of witnesses for and against plans under consideration.

Americans now are eligible to receive partial retirement benefits at age 62. Those born in 1937 or earlier received full benefits at 65. But for those born later, the age for full benefits rises gradually. The age for full benefits is 67 for those born in 1960 or later.

Eugene Steuerle, a senior fellow at the Urban Institute, a Washington analysis center, said, "The system has morphed into a middle-age retirement system," with close to a third of the adult population scheduled to be on Social Security within 25 years. People today, on average, are retired for close to a third of their adult lives, he said.

The average retirement age for workers in the 1940s and 1950s was around 68, he said. With longer life expectancies and better health now, the equivalent retirement age today would be 74, he said.

Steuerle recommended that Congress increase the early and normal retirement age, even if there were no shortfall in Social Security. People in their 50s, 60s and 70s represent a large and underused labor pool, he said.

Thomas said that would be a problem "for those of us that come from families used to physical labor," but Steuerle said that "the number of those kinds of jobs in our economy is diminishing."

Not every retiree is comfortable with the idea, however. Darlys Sifrit, 67, of Boone said she worked at jobs earlier in her life when she had to stand on her feet, including stints as a school cook and a hospital transporter. Then she had to have her hips replaced - twice.

She works part time as a receptionist in a chiropractor's office, and she said she loves her job. But she said if it weren't for Social Security, she and her husband wouldn't be able to "pick and choose" jobs that suit them better for this time in their lives.

Senate Finance Committee Chairman Charles Grassley, R-Ia., said an increase in the retirement age would contribute to a solution to the Social Security shortfall, but only in part.

Another option would be to make more people wait until age 67 to collect full benefits, he said in a conference call with Iowa re- porters.

Grassley said an increase in the retirement age does seem more popular than some other options among Iowans, "even the ones that don't support personal accounts." He said he has heard no discussion of increasing the age any higher than 68 for full benefits.

Meanwhile, at the hearing, partisan battles flared anew. Republicans said Democrats continue to refuse to put forth any ideas for fixing Social Security. Democrats protested that the hearing was stacked because most of the witnesses backed personal accounts.

Rep. Jim Nussle, R-Ia., a member of the committee, complained that there is an "e-mail chain letter out there" that contends Social Security's problems could be solved by requiring payroll taxes on wages above the current $90,000 limit.

Larry Lindsey, a former member of the administration who's now a consultant and a supporter of private accounts, said raising the cap would simply delay problems by four to six years and could harm businesses trying to compete in a global economy.

More hearings are ahead on Social Security, with Grassley planning one before his committee during the week of May 23. However, he also said there can be only so many hearings, and action has to begin soon.

"I'm about to write a bill," he said. "If we don't write a bill for eight or nine months it's going to be eight or nine years."