The age at which workers can receive full Social Security benefits should be
increased to help reduce the looming insolvency of the system, according to the
American Academy of Actuaries.
“The sooner policymakers act, the more options they will have,” Thomas Terry,
vice president of the Washington-based academy and chairman of its Pension
Practice Council, said at a press conference Monday, August 4.
He is also chief executive of JPMorgan Compensation and Benefit Strategies, a
unit of JPMorgan Chase & Co. of New York.
Tax increases could be phased in more gradually, and reductions in benefit
growth could be spread across a much larger population, Terry said.
The academy suggested three proposals for increasing the retirement age.
In one plan, the age at which full benefits could be received would be raised
to 67 for all workers born in 1949 or later, which would reduce the expected
deficit by 10 percent.
The second plan would increase the full-benefits age to 67 and increase it by
a month every two years until it hit 70, thus eliminating 35 percent of the
expected long-range deficit.
The third option would increase the schedule for full benefits by two months
every year until age 70, eliminating half of the long-range deficit, the academy
said.
The system is expected to have cash flow problems beginning in 2017, and the
Social Security trust fund will be exhausted by 2041 at the current rate, the
academy said.
Filed by Sara Hansard of Investment News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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