September 1, 2014

Economic Analysis on Eligibility Ages

  • Social Security, established in 1935, is the federal government’s largest program. It represents approximately one-fifth of the federal budget and...

Age 65 isn’t what it used to be, and longer life spans in the United States are expected to strain both government and private resources for supporting older Americans. That’s led to proposals to increase eligibility ages for some retirement benefits.

Diane Lim Rogers, chief economist for The Concord Coalition, discusses this issue in her most recent column in the Christian Science Monitor. She cites a recent Congressional Budget Office report that explains that if the eligibility age for Medicare were gradually increased from 65 to 67, for example, annual Medicare spending would decline by 5 percent.

A frequent criticism of increasing the Social Security eligibility age is that many lower-income people would lose income because they hold physically demanding jobs that are difficult to continue in their later years.

But Rogers explains that benefits do not have to be cut in a one-size-fits-all way.  Most proposals for Social Security and Medicare reform, in fact, would trim benefits or raise taxes primarily at the top of the income distribution.

"If lawmakers are going to cut spending and deficits,” Rogers says, “they will have to cut overall benefits on average. There's no way around that. But cutting benefits for those who can afford to work longer, both financially and physically, can spare – and perhaps even strengthen – the benefits for those who cannot easily work longer."

Rogers also spoke on this topic recently on southern California public radio station KPCC.

Read more at Working Beyond 65 Can Be Good. Is It Right? (Christian Science Monitor)