Increasing The Retirement Age Isn’t The Answer

by Elizabeth on January 7, 2013 · 5 comments

If you need to know three things about Lloyd Blankfein, know this: the Goldman Sachs CEO is worth an estimated $450 million, he’s worked at a desk job most of his adult life, and he doesn’t think you should be able to get your Social Security benefits when you turn 62:

“You can look at history of these things, and Social Security wasn’t devised to be a system that supported you for a 30-year retirement after a 25-year career. … So there will be things that, you know, the retirement age has to be changed, maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised. But in general, entitlements have to be slowed down and contained.”

-Lloyd Blankfein from Nov. 19, 2012 interview with CBS News‘s Scott Pelley

Blankfein, who just celebrated his 58th birthday in September, won’t even be able to file for early Social Security benefits for another four years. Of course, judging by his estimated net worth, he won’t need to collect those benefits to make ends meet after retiring, but that isn’t stopping him from trying to keep everyone else from having to wait to get their hands on a benefits check from the Federal Government.

Right now, the earliest age where you can collect Social Security is 62; however, delaying your retirement for just three years can increase your monthly check by nearly 40 percent. Waiting until you’re 70 can almost double the benefits you would have received at age 62.

My father is on the cusp of retirement; he turned 61 earlier this year, meaning he (and my mother, for that matter) could collect his Social Security benefits starting on his next birthday. However, he’s decided to hold off both on receiving Social Security and on retiring. The reason? Even though he’s had a tough year medically, his job is largely done from behind a large mahogany desk – in other words, being at home and tending to his garden and the 3/4-acre lawn is more laborious than his career has basically ever been.

But not every job is as physically non-taxing – and this is why I think Lloyd Blankfein’s call to increase the retirement age isn’t fair. My husband, for example, is already seven years into a career in law enforcement. Unlike the stereotype of cops eating donuts and drinking coffee, my husband’s job keeps him constantly on the move; to prove the point, he goes through two to three pairs of work boots every year on the job. My husband comes from from a 12-hour shift on patrol complaining of knee pain, then goes straight to sleep; my father, by comparison, comes home from his 8-hour desk job and heads outside for a long walk with the dog.

From a purely physical point of view, my dad could probably do his current job for the rest of his life. My husband’s knees won’t last that long, at least not without a total joint replacement. I think Blankfein’s suggestion that raising the retirement age would put less of a burden on the entitlement system is short-sighted; it overlooks those with labor-heavy jobs and the impact those jobs have on a person’s body.

Even though Social Security benefits increase the longer a person delays retirement, most people don’t do that; most Americans start collecting those monthly checks sooner rather than later. Some people may ultimately have to retire early for health purposes, or because their bodies simply can’t do their jobs any longer; delaying the retirement age for this population could be disastrous. It isn’t the answer. Instead, I think the government needs to do more to help workers delay the collection of their benefits – whether this means they extend their careers or not – to put less of a burden on the system. But making universal changes that, in my opinion, would disproportionately affect blue-collar workers who are more likely to rely on those government benefits, isn’t the right way to go.

Reader, do you think increasing the retirement age is the right move for the U.S. Government?

{ 5 comments… read them below or add one }

1 Money Beagle January 7, 2013 at 12:57 pm

I’m fine with it as long as it’s one step to a more complete plan. The reason I’m OK with it has nothing to do with the impact on the budget, it’s more to do with the fact that when Social Security was first put into place, people didn’t live as long, so the average person might collect benefits for 5-10 years before they died. Now, we live so long that many people can collect for 20-30 years, and I’m sure the average is way higher than it was when the program was enacted. This growth has hurt more than anything else, so if you take some years off the front, you’re bringing it back in line more with the original design of the program, when we had no problem affording it.

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2 krantcents January 7, 2013 at 1:26 pm

Unfortunately, changes need to be made! I do not expect Washington will do the right thing when it is all said and done. Increasing the age, means testing and changing they way they calculate CPI many help. They may even increase contributions by raising the limits. Imagine paying into Social Security and means testing excludes you.

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3 Squirrelers January 7, 2013 at 11:58 pm

I think that there may be some people living longer, but there are still plenty of people out there who simply break down physically and even mentally (alzheimers, etc) when they get older. Let people get their social security at the age they expected to!

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4 Paul January 8, 2013 at 9:40 am

I’m not sure what this sentence is supposed to mean in the context of this article:

“Instead, I think the government needs to do more to help workers delay the collection of their benefits – whether this means they extend their careers or not – to put less of a burden on the system.”

Isn’t that exactly what increasing the collection age is trying to accomplish? Or is this saying the government should have some slush fund for people who work physically taxing jobs to draw on while desk jockeys work til they’re 80?

I’m can’t pinpoint why I’m so fed up with the end of this article other than the idea the author could not stay consistent in their premise. Suppose that’s a me-problem.

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5 Brick By Brick Investing | Marvin January 8, 2013 at 2:42 pm

Unfortunately and I sincerely do mean unfortunately we cannot afford social security anymore as a nation. The first generation that paid into it received a great return on the their money, the next generation a fair return, our generation will be lucky to break even, and our children’s generation will only collect a fraction of what they contributed.

It’s a shame because your father was promised social security, has paid into it his entire life, and now is being yanked around by our politicians.

I’m not going to act as if I have all the answers but makes no sense to be forced to pay into a program that is insolvent. I truly hope your dad is able to collect but as I previously stated our country cannot afford the promises that we have made to so many.

And btw, please thank your husband for the service he provides to his community. As a former soldier I can relate and definitely respect the sacrifices law enforcement officers make to keep our streets safe.

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