Tag: Aging

The Social Security Conundrum

Sorry to hit you with two egghead posts in one day, but there’s a lot of bullshit out there needing to be countered.

The Liberal Echosphere has erupted in response to Alan Simpson’s suggestion that we raise the retirement age. They point out that the rise in lifespan is mainly due to drops in infant and child mortality. The number of years one can expect at age 65 has risen much more modestly.

A man who turned 65 in 2010 has a life expectancy of 83.1 — barely five years more than he had in 1940. Women have increased their life expectancy at roughly the same rate. Since 1940, the retirement age for drawing Social Security benefits has been lifted from 65 to 67, meaning that people are receiving a net of only three extra years of benefits than they were 70 years ago.

First of all, three years of benefits multiplied by millions of seniors is a lot. It’s at least 20% of the Social Security bill.

But second, this ignores something more important. In 1940, far more seniors were poor and disabled then are today. If you got to 65, you were not in good shape. Over a third of seniors were living in poverty and at least that many were disabled. Those numbers are dramatically lower today. In fact, seniors are the wealthiest demographic by age.

The solutions seems quite simple to me (assuming that privatization is off the table):

First, Social Security pays out larger benefits to those who delay retirement. That slope should be made longer and steeper, especially in the early years. Seniors who can’t work shouldn’t be in poverty. But there should be greater benefits to delaying retirement. I would even extend this to dramatically improved survivor benefits for those who never retire.

Second, the program should be means-tested. No one should be cut off having paid into the system. But benefits should be tapered with the principal goal being keeping seniors out of poverty.

Or, we can stick with option three — the one preferred by the Left. We can stick our heads in the sand and pretend the problem doesn’t exist.