Fact Check: Is Raising the Retirement Age Bad for the Poor?

Fact Check: Is Raising the Retirement Age Bad for the Poor?
Fact Check: Is Raising the Retirement Age Bad for the Poor?

It’s been reported recently that Speaker of the House Paul Ryan had proposed raising the retirement age to 70. A lot of people have complained about this and Ryan’s been called a hypocrite because he gets a government pension at 48. Some have said it’s unfair to make Americans work longer and have less time to enjoy retirement.
The most smoke and fire has been generated by Left, though. They’re claiming that this is an “attack on the poor”. Of course if this actually happens it won’t just be the poor who retire later, but since when did facts matter to the Left? Anyway, is this really an idea aimed at making life worse for the poorest Americans?

Highlights

  • Firstly, part of the proposed increase is happening anyway. Right now the retirement age is 65, but it’s slowly rising as people born in 1938 and later start to retire. Anyone born after 1959 is going to have to work until 67 before they can claim full Social Security benefits.
  • It isn’t just the US that’s raising the retirement age, either. For example the UK is also raising it to 67. That’s because this policy isn’t an attack on anyone; it’s an economic necessity that’s going to have to happen sometime. Any country that wants to still have a pension system in 20 years is going to need to make retirement happen later as people are living longer.
  • When the current retirement age was introduced, life expectancy for men in the US was 59.9 years; for women it was 63.9 years. This meant a lot of people never even claimed social security, and most of the ones who did only claimed it for two or three years. These numbers are now 76.1 years and 81.1 years; most people are getting Social Security for at least 10 years, and sometimes more than 30. This means the social security system costs more – a lot more.
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  • Many Dems argue that the poor have a shorter life expectancy than those who are financially better off, so raising the retirement age hits them harder. That’s sort of true, but why do the poor have a lower life expectancy? Part of the reason could be that they have less money when they retire, so they can’t afford to take care of their health. Working an extra few years would give them more chance to save for retirement.
  • There’s no fair way to adjust retirement age for income. What’s going to happen if the government starts saying “You earn $29,999 a year, so you can retire at 67, but you make $30,000, so you have to work an extra three years.”? How does that encourage people to be successful? And retirement age has to rise. If it doesn’t, the Social Security fund will dry up in around 2034. To prevent that, Social Security contributions would need to go up – and that won’t be good for the poor either.

Calling this idea an attack on the poor makes for good headlines, but it just doesn’t add up. We’re all living much longer than our grandparents do, so why shouldn’t we work a bit longer as well? We can’t expect other people to pay us for up to a third of our lives.