Raising the retirement age won’t save Social Security

Since the average life expectancy is higher than it was 40 years ago, many politicians and economists have publicly opined that raising the Early Eligibility Age (EEA) for benefits is good economics, reports Bruce Krasting of Business Insider.

But Krasting thinks that all of these deep thinkers are wrong.

How is it possible that all of the folks pushing for an increase in the EEA could be wrong on this issue? Intuitively it makes sense. Why doesn’t it work?

Social Security discounts the amount payable if early retirement is opted for. It is calculated so that Social Security is “expense neutral.”

The Social Security Administration uses a simple formula that immunizes Social Security from the cost of those seeking payments prior to their Full Retirement Age (FRA). The reductions are based on the month of claiming: A benefit is reduced by 5/9 of one percent for each of the first 36 months before the FRA.

Case #1
Benefits payable at age 62 = $1,000 per month
Average Life / (years of benefits)= 78 / (16 years)
Total life time benefits = $192,000

Case #2
Benefits payable at age 64 = $1,142
Average Life / (years of benefits) = 78 / (14 years)
Total life time benefits = $191,856

Krasting hopes that this proves that there is no economic consequence to Social Security from raising the EEA.

Read more.

If you need help with your Social Security Disability benefits, contact the Social Security Disability lawyers at Fleschner, Stark, Tanoos & Newlin.

Reach out to a Terre Haute Personal Injury Attorney Today

The financial burden that often comes with a serious injury can be too much for many people to bear. Unexpected medical debt, damaged personal property, and the sudden loss of income can impact the budgets of most families. The good news is that a successful injury claim could help reduce that financial strain after a serious accident. Get in touch with a Terre Haute personal injury lawyer with Fleschner, Stark, Tanoos & Newlin to learn more.

    *You agree to our Terms and Privacy Policy, and you are providing consent to receive communications including calls, emails, and texts.