Gene Steuerle: Raising the Retirement Age is a Progressive Reform

On the front page of the Washington Post on March 11, 2013, Michael Fletcher connects different the life expectancies of the poor and rich to the debate over whether Social Security should provide more years of retirement support as people live longer. He mistakenly leaves the impression that adjusting the retirement age for increases in life expectancy hurts the poor the most. In fact, such adjustments take more away from the rich. Let me explain how.

Source: The Government We Deserve blog.

Comments (12)

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  1. Roger Hall says:

    This would be much easier if we could come up with a close to exact accurate device that predicts our individual life expectancy and then devise a retirement plan according to that prediction. Too much reliance on technology? That’s the future…

  2. Ryan Goldman says:

    I think the argument against increasing the retirement age by adjusting it to life expectancy will lose strength and validity over time.

  3. Gabriel Odom says:

    If you peg retirement age to median life expectancy across all races and genders, then yes. You are correct.

    However, retirement age should be set to median life expectancy by both race and sex. This way, African-american males (shortest life expectancy) are not subsidizing Asian-american females (longest life expectancy).

  4. Benedict Popplewell says:

    I agree with Gabriel and Ryan. If we raise the eligibility age two months per year from 2017 to 2035, the federal governemnt will save more than $100 billion. There’s a whole sequester cut plus a defense program right there!

  5. steve says:

    Gabriel is close. It should be set to income and sex. hose two account for most of the difference. Pick a length of time to cover, say 17 years, and set retirement age accordingly, but with a minimum age of 62. Those with life expectancy of 89 years start collecting at 72.


  6. Corey says:

    I think the Fletcher article was simply talking about accross the board increases or a flat increase for all payees. This would be unfair to the poor, for whom gains in life expectancy are not nearly as pronounced as the wealthy.

    I feel like what Gabriel proposes would make sense if the “pegging” also took income into account.

  7. Gabriel Odom says:

    I was simply hoping to leave income out of the equation completely. After all, “rich” people rarely have large incomes, but rather large stores of wealth and assets. If we tie Social Security to income, then we have to once and for all recognize it as nothing more than a transfer payment or welfare programme.

  8. ColoComment says:

    If you start selecting by grouping & subgroup, then eventually it will devolve into the sort of thing we have now in politics, where technology allows us to slice and dice ethnicities, genders [hetero-, LGBT, wannabe T, and as yet undiscovered “other”], ages, occupations, etc., ever smaller and thinnner.

    How will you prevent politicians from unwarranted (by actuarial evidence) favoring some group over another?

  9. Jack says:

    The right of way fees for telephone service result in hundreds of millions of dollars in effective regressive taxation in Texas alone. There’s no huge outcry about that one though. This article is too funny.

  10. Patel says:

    People are living longer, and so, collectively we should have an understanding that if people want to work into their 70’s, they are more than welcome to. Where appropriate, referring to workers who work at an office setting, people should be expected to work and work until they drop.

  11. Studebaker says:

    Interesting take on this. I like Gene Steuerle.

  12. Floccina says:

    Life style is a large contributor to longevity. So if the goal is to increase longevity, and it seems true that for blue collar workers that the earlier they retire the younger they die (it is thought that this id due to the fact that retirement allows for more time to drink, doesn’t shouldn’t this reduce our concern about raising the SS eligibility age? Perhaps
    postponing Social Security and Medicare eligibility and making harder to get on disability would cause some to work longer and increase their longevity.

    I think that we can agree that leisure does not increase longevity in everyone but that some people respond to having more work free time by engaging in behavior that reduces longevity.

    BTW when I was growing up I knew a man who on almost everyday when he did not need to work the next day would drink all night and into the next day. If he was off 2 days he would be drunk 2 days. If he was off 3 days he would drunk for 3 days. He would be falling over drunk and would sometimes loose his car and his family would have to go look for it. (I for one do not understand how he lived as long as he did). But he would always sober up for work. What would a delay in SS and Medicare do to the life expectancy of such a man?

    BTW in Calton a low SES part of Glasgow Scotland the male life expectancy is 54 years. Clearly these people are drinking themselves to death and access to healthcare is universal in the UK.