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.
"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.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV