This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

The Debate Over Raising The Retirement Age Should Account For Income Differences: NCPA

DALLAS, Feb. 25, 2013 /PRNewswire-USNewswire/ -- Over the past 30 years, life expectancy beyond age 65 for retiring men with below average income has risen only one year compared to an increase of six years for men with above average income, according to a study from the Social Security Administration.

(Logo: http://photos.prnewswire.com/prnh/20130225/DC65817LOGO)

"Life expectancy at birth has increased seven years since 1970, so should the eligibility age be raised seven years as well?" asked National Center for Policy Analysis President John C. Goodman. "The problem with raising the age of eligibility, however, is the five-year difference between life expectancies for above- and below-average income men."

A new NCPA study explains how to solve the problem: raise the age of eligibility for Social Security but at the same time make the benefit formula more progressive. For Medicare, the premium payments can be made more progressive.

The study, co-authored by NCPA Senior Fellow Thomas R. Saving, a former Public Trustee of Social Security and Medicare, suggests that progressive price indexing combined with raising the eligibility age could retain the program's progressivity while slowing the growth in spending.  The study found:

  • Once longevity differences are accounted for, Social Security's progressivity is lessened, relative to estimates based on average longevity estimates by birth year.
  • However, even for the most recent group of new retirees analyzed, the program remains progressive.
  • Further, the study finds that within birth years, the program redistributes from high to low earning workers, even after accounting for income-related differences in longevity.

"Combining an increase in the retirement age for all workers with an adjustment to the benefit formula would result in a program that could be financed in the long run at the current tax rate and would retain the program's relative lifetime progressivity," said Goodman.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs