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Social Security Should Start at age 55

Social Security Benefits should start at age 55 do to the following: 

 

  • In 1841 Congress voted to give William Henry Harrison's widow a special $25,000 pension, along with the lifelong right to mail letters for free. 

 

  • The life expectancy in America has declined to a 3rd world country status.  If one takes their parents age average and friends parents age average it is probably less than 70 years of age.

 

  • Age discrimination exists for people 55 & older in the workforce.

 

  • People 55 years old and older are more likely to be part-time employees, underemployed, unemployed, in and out of jobs, and homeless.  

 

  • Making the eligibility age 55 years old for Social Social Security would be a big boost to the economy and humanity as a whole.

 

  • Corporations replaced traditional retirement plans with 401K savings plan, but most Americans in the private sector are living paycheck to paycheck & 25% retired people only receive Social Security.

 

  • Social Security is determined by the last ten years a person has worked and paid into it, but most American's are not fully employed or earning a living wage from age 50 to age 61, so Social Security Judges forces them into a much lower Supplemental Security Income (SSI) even though these people have worked, paid into social security and paid taxes for over 20 or more years during their life time.  SSI has better health care coverage, but both SSI and Social Security should have the same full coverage health care benefits for a person just receiving social security can not afford to spend any money out of pocket for any health care including eyes, glasses, teeth, etc...  

 

  • Public employees like police officers, guards, firefighters, and others receive a full government pension after 20 years of service and if they worked for at least 10 years of service they can collect a government pension at age 55.  

 

  • The congressperson or senator must be 62 years old or at least 50 with 20 years of service, but they could collect at any age if they served for 25 years.

 

Government should not discriminate.

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Recognized Social Butterfly

JOKE:

What does a 100 year old man, who began Social Security at age 70, say to a 100 year old man, who began Social Security at age 55?

 

 

 

Answer: Sucker!

 

Gold Conversationalist

Where did you get your information? Have you looked at the Community Guidelines? Below is what is in the Guidelines.

 

Cite your sources

We encourage members to use online resources in their discussions. But please be sure to cite your sources and give credit where it is due. You may link to and summarize cited sources but may not copy entire articles or videos into your post. False and misleading information is also prohibited.

 

This is an interesting article. US Life Expectancy Has Declined for the Third Year in a Row (businessinsider.com)

Regular Social Butterfly

If unable to perform, you can qualify for disability.  That is the alternative to SS.  

Once 32:1 SS beneficiary ratio is NOW about 2:1.  There is NO WAY Congress would be receptive to reducing from 62 to 55 as both Medicare and SSA have warned of payout problems before mid 2030s.  Even if able, given that your benefit falls about 32% at 62 vs 70 your monthly benefit would be far below the poverty level, which just creates MORE SSI, welfare issues.

Life expectancy was rising before the pandemic and obesity.    

Gold Conversationalist

There is even talk of increasing the Full Retirement Age (FRA...sometimes now call NRA...Normal Retirement Age https://www.ssa.gov/oact/ProgData/nra.html) being increased to older than 67. My quick Google search on the topic turned this document up from the Congressional Budget Office (CBO, not so that this this is proposed law itself, https://www.cbo.gov/budget-options/54745

 

That article mentions "Under this option, the FRA would continue to increase from age 67 by two months per birth year beginning with workers turning 62 in 2023, until it reached age 70 for workers born in 1978 or later".

 

So the thinking seems to be going in the opposite direction as from lowering the age.

 

But perhaps the OP's thought is to lower the minimum age for reduced retirement benefits from the current age 62. For example, reduced benefits would be available as soon as age 55 instead of 62. As pointed out in a few posts, to maintain solvency of the system the reduction in benefit for age 55 would have to be of very large magnitude.

 

The CBO article I linked to above gives some insights into thinking on the raising of the FRA while maintaining the minimum age of 62; this has the effect that the reduction in benefit from FRA to age 62 will actually increase as the FRA increases (in other words, higher FRA leads to bigger reduction in age 62 benefit). "As under current law, workers could still choose to begin receiving reduced benefits at age 62, but the reduction in their initial monthly benefit would be larger, reaching 45 percent when the FRA is 70." Thus, lowering the minimum age to 55 would lead to greatly reduced benefits.

 

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Regular Social Butterfly

While there is talk of continued escalation in FRA law to age 70 those born in 1960 and after their FRA is already set at age 67.  SSA needs Congressional action to shore up benefits as already projections are it will only be able to meet 77% of expected benefits around 2034.  

Longevity has been increasing and Congress /SSA are slowly moving in the same direction.
The last to do anything constructive with SSA was Reagan in 1983.  

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Gold Conversationalist

Yep. Everyone is right on that. Only Congress can take action on this. Not me or the SSA.

 

The initial post brings out important issues that involve more (in my view) than Social Security benefits. It really comes down to "how do we slice up the economic pie?" In my view, those slices need to be a bit more equitable, no "thumbs on the scale" from special interests. 

The projected looming shortfall in payroll taxes for Social Security mean that any more generous benefits from SS are unlikely. In fact, in my opinion, most people should be looking at their retirement budgets for the future and determine now if they may need to tighten the belt at a later date (in my view, better to cut back a little bit now rather than drastically so in the future when/if SS benefits are cut by 23% or so...of course, that might not be across the board, who knows).

Regular Social Butterfly

Latest PPI was showing highest bump in inflation since 2011, which if it continues and spreads to CPI we could see the highest in recent times COLA for next year.  Of course, THAT only accelerates the demise of SSA and Medicare as both are heavily reliant on FICA contributions.  Already economics see lots of jobs NEVER coming back!!

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Honored Social Butterfly

To those here discussing any potential changes to the SS system -

There are so many proposals out there for changes - Listed here by date:

SSA Actuary - Office of the Chief Actuary's Estimates of Proposals to Change the Social Security Pro... 

 

Plus there could be some tweaks within other mammoth-size legislation before we even get to the critical extending the fore-casted fiscal life (75-years) of the program - no need to get too involved until details are known but it does warrant keeping a watchful eye as to what happens.  That's the constant here - CHANGE - we know it is gonna happen; has to happen. 

 

I remember some of those Reagan era changes - at the time, as a worker, I was upset - but now as a senior - I view it very differently through different eyes.

 

Stay on the ISSUE - not the politics. PLEASE -

 

It's Always Something . . . . Roseanna Roseannadanna
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Do you realize that the total SS money collected by those who die at their life expectancy (average) (83 for me) does not depend on when they started receiving SS?  If you bet that you will live longer than average, it behooves you to delay collecting SS until age 70.  If you bet that you will die before the average, it behooves you to start collecting as soon as possible.  Once you live past your life expectancy (83 for me), you will receive the most monthly money, if you delayed receiving benefits until 70.

 

I may be wrong but I think the "life expectancy" is calculated for those who already survived to age 62.  That's why my life expectancy is higher than that of the general population.  If you lower the age to 55, the life expectancy will drop.   

Conversationalist

@aruzinsky 

Your analysis of starting or delaying social security is accurate based on the law of large numbers. Your monthly benefit early, at full retirement age (FRA), or delayed are actuarial equivalents of each other based on average life expectancy (average ages 83 to 84) and an approximate 3% interest rate. Your specific life expectancy is not known. However, the actuary can develop statistical data using large groups of people; and, are in the ballpark, if not the diamond or batter's box. For your information, the SS website provides an example of life expectancy statistics using a group of 100,00 lives separated by male and female.It is called Actuarial Life Table and is dated 2017 (based on statistical data from 2016). The data at that time tells us that about 50% of the males in the original 100,000 sample have passed away by age 80. About 66% of the males have passed away by age 85. And, about 82% of the males have passed away by age 90. So, more than half of the males do not live to the average life expectancy (ages 83 to 84). The females do live longer which is a contributing factor to increasing the average life expectancy statistic for males. On the other hand, males passing earlier is a contributing factor to decreasing the average life expectancy for females. As  you know, social security benefit calculations are gender neutral. In other words, there is one formula for both males and females. If you follow the math, it  is a slight advantage to females which is OK. Lastly, life expectancy is calculated every year based on the demographics of the group. For example, if you use the life expectancy of an age 66 male, it may be 17 years or age 83. However, if that male lives to age 80, the average life expectancy may be 8.28 years or ages 88 to 89. Life expectancy changes from year to year.

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Gold Conversationalist

My initial reaction was "well, good luck with that". Even my liberal sensibilities know that somehow the expense of the SS benefits must be paid for somehow. But let's consider this a bit more.

 

If I'm not mistaken, someone else posted a similar thought recently (within past several months). There was a good discussion about how someone getting SS retirement benefits at such a young age would likely have to get pretty low monthly benefit based on actuarial principles...the process of the SSA's making its "income" match its "expenses" of paying out benefits. You might hunt down this discussion.

 

One factual quibble I have is your bullet point that SS retirement benefits are determined by the last 10 years of one's work record (and SS payroll taxes). This isn't true. The retirement benefit is based on the 35 years of your work history that have the highest income (and corresponding SS payroll tax). These numbers of modified with some factors to account for inflation so that income from 45 years ago is more fairly compared with income from 2 years ago. This page should give a good general discussion of how the benefit is calculated: https://www.ssa.gov/oact/cola/Benefits.html

 

You do make good points that many workers in the last 10 years or so of their working career may be in a vulnerable, precarious position. Workers with physical jobs may find their bodies breaking down and they are unable to do the sort of work they had previously. Office workers, professionals or otherwise, won't find their bodies breaking down from job-related wear and tear, but they need to keep their skills up and they may face real difficulties in finding new work if they are laid off in the last years of their career. I have known such guys who were laid off around age 60 and they often did not have good alternatives.

 

Edit to add:  okay, that other post was about a year ago, April, 2020. At my age time is somewhat elastic. The similar thread was this https://community.aarp.org/t5/Social-Security/Proposing-a-change-to-Social-Security-in-light-of-COVI...

 

 

Gold Conversationalist

A new day, some more comments. Not that disagree with your intent, or what I perceive to be your intent. Or what is your intent, by the way?

 

Bullet Point:

 

1 - Interesting.

 

2 - I think other people have addressed this in posts. It is an interesting subject, how life expectancy at birth is one measured rate but life expectancy at older ages is different. The US is not great with infant mortality, so I expect that it won't look great for life expectancy at birth. But life expectancy at older adult ages is likely quite good for the US.

 

My wife was born in a third world Asian country and we have been there for a number of extended visits. It is very disconcerting to see the level of medical care there, the doctors' offices and their poor equipment, the hospitals (oh, very woeful indeed). Some research on the web just now gives me this comment "The average male in the Philippines lives until he attains 66.2 years of age. ... In the United States, where the greatest number of Filipinos permanently relocate, the average male lives to be 10.7 years older than in the Philippines." well, that's not quite what I first interpreted, I thought that Filipino male expatriates lived that extra 10.7 years, but it sounds like the statistic for the "average US male" (of what age? etc?) Anyway, it sounds like the US has better longevity than this third world country.

 

3 - I won't quibble with that. I wonder if discrimination based on other criteria may not still exist in hiring practices? Probably some, somewhere. I wouldn't have any idea how big a problem that is (except to its recipients). And that's a topic for an entirely different location than this SS forum.

 

I believe I myself was a victim of age discrimination at the last job of my working career: a very small tech company, I was there for 22 years, worked hard, helped the company develop itself, got paid quite well after the very early lean years of the company, and later shared in very large bonuses. But the last few years: no raises, no bonuses, management barely said "boo" to me. In the past I'd been told they were so pleased with me I could work there as long as I wanted to! Due to my personal situation I somewhat planned to work beyond my FRA, maybe even to 70. But I bailed out at my FRA plus one month. Haven't looked back.

 

Thank Heavens I wasn't treated like some guys I had worked with previously (professionals with degrees and certifications) who were laid off or terminated at ages 58-60 or so. Horrible for them. (Their experiences certainly were object lessons for me to plan accordingly.)


4 - Interesting. I don't doubt this. It would be interesting to see some statistics about this.

I do recall around 1992 that I began to see more and more elderly people working in stores, shop clerks, and all. I'd seen some in the past but around then there was a noticeable large increase. And I began to see more and more elderly people out on the street holding cardboard signs, "hungry, please help". Golly, that was frightening (need I explain). I really had never seen this before then.

 

5 - I wonder how this would boost the economy? It could have the benefit of clearing out the deadwood in the job market so that younger people would have more opportunity to advance. Some major firms even had unofficial official policy to hire only young people and to try to clear out the dead wood any way possible. Major lawsuits resulted. But if the system is set up have people retire at 55 then it might work out. Anyway, perhaps companies would become generally more productive.

 

Oddly enough, where I live now, my dentist is well north of 70. He had retired once to this retirement town, got bored and started a new practice. Same thing with my rheumatologist; he recently retired again at age 82.

 

6 - What you describe is true. In the "olden days" Social Security retirement benefits were to be one leg of a three-legged stool, with the others being employer's pension and personal savings. These are no longer the olden days and most people do not spend their working careers at a single employer (was that ever the case? after recently reading a publication by the SSA of their history I have reason to doubt this necessarily so true). The switch from pensions to 401K certainly increases the likelihood of a working collecting on these retirement benefits.

 

But I don't see how this is cause and effect to the conclusion of your bullet point. I would agree that many working people are financially vulnerable and would be in bad shape if they lost their paycheck.

 

7 - I addressed that in my previous post.

 

8 - Public employees often get a great retirement plan. Often this was in exchange for getting lower pay than the private sector. My own observation is that many of these public entities may not have set up plans based on good acturial and funding principles, because so many of these have experienced severe financial crises. That's my own casual observation having been an avid reader of news for many years.

 

9 - Here's my own opinion: Congress has long seemed to be eligible for overly generous benefits. I guess that's what happens when you can vote your own retirement. Admittedly, I haven't done much research on this but that's been my impression over many, many years of reading the news.

 

 

I think in the end it comes down to a larger discussion, as I mentioned in another post. The divvying up of the entire economic pie may need to be reconsidered. No one area of the economy can be considered in isolation, certainly not one as major as Social Security. Unfortunately, the "pie" is limited in size, benefits cannot be given away without distorting something else. But the pie can be grown certainly. Will this consideration of the whole pie ever happen? I doubt it.

 

In conclusion:  We all gotta remember "there's no such thing as a free lunch"

 

 

 

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Honored Social Butterfly

@fffred 

Now we need another retirement thread - cause you bring up some interesting points of your own - in a much wider net.

 

Maybe the reason for the penalty for early withdrawal of an IRA was set as 59.5 for those who want to or have to retire early.  Actually there is a way to avoid the penalty even at 55 for those who can mathematically work it.  So for those who have that TIRA - you could use one of those stool legs for a few years or for many years depending upon the balance, growth and use.

 

Congressional pensions are the same as any other federal employee - they do have to be vested and since "the vote" determines who stays and who goes at the Congressional level, that's a little different than most federal employees.

Congressional Research Service Report RL30631: updated 08/08/2019 Retirement Benefits for Members of... 

 

Interesting concept - "The Pie" - personally, I have always had a problem with people who work for an employer (private or public) wanting to be paid in benefits rather than in cash so that the person doing the work can manage their own and all their money.  Do you think we went wrong here in this concept?  It is still part of "the pie" but yet is not taxed as much as "real" 💸 wages. 

Neither does the worker earn wages included in their SS formula for benefits on some of these benefits. 

Yep, there is enough of special interest and tax loopholes to go all around - enough to help pay for that lunch !

It's Always Something . . . . Roseanna Roseannadanna
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Conversationalist

@fffred 

I believe Congress would need to approve any SS changes. I would not overestimate their financial and/or fiscal skills. With regard to one's Primary Insurance Amount (PIA) payable at Full Retirement Age (FRA), the current formula chooses 35 years with the highest indexed earnings. It does not use your highest earnings or your corresponding FICA taxes paid. You may recall that inflation in the 1970s and 1980s was very high. Some of those years with indexed earnings may replace higher earnings from the 1990's when inflation was less. You are correct with regard to actuarial reductions for starting at age 55. If your FRA is age 67,your age 62 benefit is only 70% of your PIA. I suspect an age 55 benefit would be in the area of 30%. Hope this helps.

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