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Sunday, October 31, 2010

Social Security, changing the retirement age is a Band-Aid on a gushing artery.

There are several ideas on how to fix social security; one of the more popular ideas right now is increasing the retirement age. An article in National Underwriter magazine reports that the American Academy of Actuaries has called for the retirement age to be increased. Now, what would this do to social security? It would change the full retirement age at which people start receive their full social security benefits, it would not affect anyone already receiving it. How effective this will be really depends on how many years the retirement age is pushed back. In all likelihood the retirement age will only be pushed back a few years if at all. This would in affect only delay the inevitable. There would be less people collecting social security and it would also reduce the amount of years that they did collect before they passed away. The problem is everyone who reaches the retirement age is still collecting; a couple of years of not collecting won’t do much good. Another problem is that people can still retire early, although they don’t receive as much benefits as the people who wait till full retirement age. The early retirement age would also have to be increased to have any fiscal effect on social security.
There is a lot of opposition to an increasing of the retirement age. The major outcry is that this would hurt people who work jobs which force them into early retirement, i.e. physically demanding jobs, and anyone who retires and runs out of money before they can collect social security. The solution to that is something we discussed in class. People who have no money when they are forced to retire or run out can draw from social security before reaching the age of early or full retirement.
The problem is that increasing the retirement age is only a quick fix. With more people retiring and people living longer at some point we will be back at the point where there is not enough money coming in to support all the people drawing social security benefits. The same thing will happen all over again and again till the point where the only people drawing social security benefits are the very old or the people who have outlived their money. This could possibly lead to an end of retirement as we know it. People will lose their golden years and be forced to continue working. If we are taxed for social security, that money should be yours when you retire. We should not have the young paying for the old to retire.

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