Retirement News : Seniors : Waiting for retirement

Waiting for retirement

Date Added: 21-03-2005

IF THERE'S one thing the Baby Boom generation is noted for, it's a restive nature, the inability to sit still, a reluctance to wait very long for much of anything, including adulthood, sex, money, and so on. That's why proposals for raising the retirement age aren't likely to fly very far in the Social Security debate.
For one thing, the so-called "normal retirement age," the age at which full Social Security benefits can be collected, already has been raised. For those retiring now, it's 65 years and four months, but the oldest Boomers - those born in 1946 - will have to wait until they're 66. If you were born after 1959, it will be 67, if the law isn't changed in the meantime.

Sen. Chuck Hagel, Republican of Nebraska, has proposed raising the retirement age to 68 as a means of solving Social Security's long-term funding problem.

Did you hear that sound? We didn't think so. Senator Hagel's brainstorm received a deafeningly silent show of approval and arrived on Capitol Hill on life support, with little pulse.

That's because Baby Boomers, regardless of political affiliation, aren't expecting to wait until they're 66 to hang it up. More likely, they will follow in the footsteps of their parents, who have retired at ever-increasing younger ages since early-out with reduced benefits was made available to women in 1957 and men in 1961.

In 1965, less than 15 percent of men opted for retirement at 62. Now it's more than half of all workers. The benefit loss for early retirement under Social Security is about 20 percent; for those for whom 67 would constitute normal retirement, it will be 30 percent.

Still, some observers contend that raising the retirement age to 68 or above is inevitable, mainly because it's the one sure way to slow the draining of the pay-as-you go Social Security fund at the hands of some 76 million restive Boomers.

By one calculation, the system could balance out immediately if the retirement age were raised to a (gray) hair over 73. Do we hear applause? Didn't think so.

The key argument for raising the retirement age is that people are living longer, which is true. In 1935, when Social Security was born, a 65-year-old man could expect to live, on average, another 11 or 12 years. Today, it's 17 years. But just because the Boomers will be around longer doesn't mean they want to spend the time still chained to a desk, or a shovel. They've got places to go and things to see, and they've been waiting a long time to do it.

As long as the Social Security system encourages early retirement with only a modest cut in benefits, it is as likely as the sun shines in Miami in the summertime that retirees will take advantage of the opportunity. And the politicians in Washington don't seem particularly inclined to stand in their way.

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