The Retirement Age

Arnold Kling explains why the term should be dropped:

Klein’s thinking is that people do not want to work longer, so raising the Social Security “retirement age” is a bad idea. His conclusion does not follow from his premise. To avoid this sort of error, we need to stop using the term “retirement age” to refer to the age at which one becomes eligible for government benefits.

Instead, think of it as the age of government dependency. If Klein does not think we should increase that along with longevity, then he is arguing that as lives get longer and longer, taxes on working-age citizens should get higher and higher.

Keeping the age of eligibility low may not necessarily help people to retire sooner. It may have the opposite effect. By keeping taxes high, it may reduce employment and wages for people of working age, thus making it harder for them to retire when they would like.

3 Responses to “The Retirement Age”

  • I remember a point in my life, a long time ago, when I discovered that I had graduated into a higher income tax bracket and around November – voila! – my taxes were cut and my paycheck got bigger!

    “Strange”, I thought. I didn’t think it worked that way.

    It turns out I had passed the maximum threshold for social security contributions. Cool! And ever since then, every year I look forward to that wonderful time of year when my paycheck (and those of millions of other well compensated Americans) suddenly gets much larger.

    As much as I enjoy it though, I can’t help but wonder why it even exists. Is it really necessary to provide what is essentially a tax cut to the better off? And if we got rid of that maximum annual contribution how far would that go to resolving the future fiscal problems with Social Security?

    I guess my point is that given the choice – increasing the retirement age to bolster Social Security coffers, or simply doing away with the maximum annual contribution to accomplish the same purpose, I would definitely prefer the latter.

  • I would prefer the former. I enjoy that year end bonus…and will spend it better than the government would. 🙂

    Seriously though, pegging the “retirement age” to changes in life expectancy is not really changing social security – it’s merely keeping it up to date with the times.

    Whereas increasing the maximum cap is indeed a fundamental change, and I would argue, for the worse.

  • Reminds me of this:

Leave a Reply