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"Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65. But life expectancy at birth in the early decades of the 20th century was low due mainly to high infant mortality, and someone who died as a child would never have worked and paid into Social Security"
"the average life expectancy at age 65 (i.e., the number of years a person could be expected to receive unreduced Social Security retirement benefits) has increased a modest 5 years (on average) since 1940. So, for example, men attaining 65 in 1990 can expect to live for 15.3 years compared to 12.7 years for men attaining 65 back in 1940"
"This is an archival or historical document and may not reflect current policies or procedures."
They are likely to take a multipronged approach to fixing SS. FRA is likely the least of the worries. I think if you are probably 55 and over at the time of the change the FRA changes will not affect you. SS tax increase and wages subject to SS will affect everyone working. They could change the overall calculation and they can choose to do nothing and let the payouts drop by 25%.
I think it is one of those issues they like to leave undone to keep attention focused on them and their reelections and such.
In the end, while it is good to be aware worrying doesn't help.
My thinking is an increase in FRA is definitely coming.... just wondering which group of future seniors need to be planning for it.
Nope. It will never happen.
As the data shows, increasing FRA to 70 will do 2 things:
1) Cause people to take benefits earlier which reduces any potential cost-savings; and
2) Cause more people to obtain OADI benefits which totally negates any cost-savings; and
3) Result in perpetually high unemployment rates.
When France (and every other country) raised its FRA, UE rates went up and France was forced to capitulate and restore the original rate.
In advanced economies that are affluent, the demographics are rectangular.
In plain English, the majority of jobs "created" are not new jobs rather they are new-hires replacing retiring workers.
If any of you bothered reading BLS labor projections between 1998 and 2018, you'd know that for every 3 jobs "created" only 1 job was a new job created as the result of an expanding economy and 2 jobs were simply younger people replacing retirees, which is not "new" job.
Quote:
Originally Posted by jetgraphics
When FICA / SocSec was first introduced, in 1935, the Actuarial tables listed the expected lifespan for males to be 55-57, so the bulk of the taxpayers would be dead before they received a dime.
Not on this planet.
The retirement age of 65 was chosen because:
1) 29 States had social security programs and chose 65 years, while 6 States chose 70 years for their social security programs and that was years before FDR pulled a Britain and nationalized all the State social security programs; and
2) The actuarial data used by the commission that drafted the Social Security Act of 1935 was Life Expectancy from Age 65 and not Life Expectancy from Age 35 or Life Expectancy from Birth.
they can choose to do nothing and let the payouts drop by 25%.
They cannot let SS drop by 25% for the lower income group otherwise those people will starve, I think a huge number of people barely survive on SS since they have nothing else saved. Cutting that lifeline off is sure to result in a lot of societal upheaval.
If say the bottom half cannot support the 25% drop then the top half has to be cut a lot more than 25%, raising taxes may cause other issues such as higher unemployment - the net result could be no new revenue generated.
If they wait until the 11th hour the policies to save the program would have to be radical and have disastrous consequences. Or perhaps they may have an asset test, anyone over $1M in assets gets zero.. maybe.
1) Cause people to take benefits earlier which reduces any potential cost-savings; and
AFAIK, taking the benefits earlier after an FRA change will not save you because it will be based on birth year as it was done in the past. Based on your FRA for your birth year your benefits would be reduced accordingly at every age you claim, so if FRA is 70 then I am assuming if they keep the earliest claimable age as 62 then it would be 8 years off the FRA at 70 so drastically reduced from the current benefit at 62. I believe benefits are reduced 8% each year you're below the FRA.
Currently at FRA of 67 if you got $1500 in benefits, then at 62 you'd get approx $988. If FRA moves to 70 your same $1500 benefit at 62 would be $769 which would be a 22% cut. If there are additional cuts even over and above the FRA then you'd get even less.
They cannot let SS drop by 25% for the lower income group otherwise those people will starve, I think a huge number of people barely survive on SS since they have nothing else saved. Cutting that lifeline off is sure to result in a lot of societal upheaval.
If say the bottom half cannot support the 25% drop then the top half has to be cut a lot more than 25%, raising taxes may cause other issues such as higher unemployment - the net result could be no new revenue generated.
If they wait until the 11th hour the policies to save the program would have to be radical and have disastrous consequences. Or perhaps they may have an asset test, anyone over $1M in assets gets zero.. maybe.
you can bet who ever proposes or votes for a cut off point based on assets will make sure what ever level is selected will enable them to collect theirs.
just about anyone with a house and a 401k in the tristate area would be over a million
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COLA History
Colas - 2009 & 2010
