Britain May Raise Retirement Age -- Too Bad We're Not
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A government panel in the U.K. is recommending that the country raise its public pension (i.e., its Social Security analogue) retirement age to 67, or even 68, from the current 65.
Social Security has already announced a "gradual" increase in the retirement age from 65 to 67 (but of course, to someone young enough to face the maximum retirement age there's nothing "gradual" about it — you lose two years of benefits, period).
Or do you? For some reason Social Security insists on shooting itself in the foot by offering a "reduced" benefit option for people who retire as young as 62. Most retirees reach the conclusion that the optimal choice is to elect the earlier, reduced benefit. For those, like me, who now face a full retirement age of 67, the preferability of receiving early benefits is even more compelling.
Given the pathetic failure of the Bush Administration to rebut the lies of the obstructionists and educate people about the irrefutable need, let alone the desirability, of voluntary partial privatization of Social Security, we are all — reformers and obstructionists alike — faced with the question of what to do next.
To review, there are only three options to close the Social Security funding gap running from the commencement of taxation deficits around 2017 until insolvency around 2041:
--Raise taxes (i.e., FICA rates, the Social Security wage cap or income taxes) or deficits.
--Reduce benefits (i.e., overt cuts, reduced increases or means testing).
--Reduce eligibility (i.e., raise the retirement age or cap benefits).
If you have to start down the path of turning the rusty old knobs (as opposed to upgrading the machine itself), then eliminating the "reduced benefits at 62" option is as good a place as any to begin.
Which is of course why absolutely no one is proposing it.
The retirement component of Social Security is known as "Old Age Insurance." Fine -- then let's start by limiting it to bona fide "old age."
Social Security has already announced a "gradual" increase in the retirement age from 65 to 67 (but of course, to someone young enough to face the maximum retirement age there's nothing "gradual" about it — you lose two years of benefits, period).
Or do you? For some reason Social Security insists on shooting itself in the foot by offering a "reduced" benefit option for people who retire as young as 62. Most retirees reach the conclusion that the optimal choice is to elect the earlier, reduced benefit. For those, like me, who now face a full retirement age of 67, the preferability of receiving early benefits is even more compelling.
Given the pathetic failure of the Bush Administration to rebut the lies of the obstructionists and educate people about the irrefutable need, let alone the desirability, of voluntary partial privatization of Social Security, we are all — reformers and obstructionists alike — faced with the question of what to do next.
To review, there are only three options to close the Social Security funding gap running from the commencement of taxation deficits around 2017 until insolvency around 2041:
--Raise taxes (i.e., FICA rates, the Social Security wage cap or income taxes) or deficits.
--Reduce benefits (i.e., overt cuts, reduced increases or means testing).
--Reduce eligibility (i.e., raise the retirement age or cap benefits).
If you have to start down the path of turning the rusty old knobs (as opposed to upgrading the machine itself), then eliminating the "reduced benefits at 62" option is as good a place as any to begin.
Which is of course why absolutely no one is proposing it.
The retirement component of Social Security is known as "Old Age Insurance." Fine -- then let's start by limiting it to bona fide "old age."
Posted by Kip on
30 November 2005
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