Last week the Wisconsin State Journal published an editorial entitled, "Slowly increase retirement age." In this editorial they make their case for raising the retirement age.
• [I]ncrease the retirement age for full Social Security benefits from 67 to 70.I agree with them on three points. Limit the growth of benefits for higher income people. I am all for a means test. If you are in the 1 percent you don't need to collect Social Security benefits. By all means the cap on the payroll tax should be eliminated and it should include all income, including capital gains. I also agree that worker contributions should be moved back to 6.2 percent, maybe not right now, but in the very near future. As for putting any of Social Security money in the stock market, not only no, HELL NO!
• Gradually raise the age, now 62, at which Americans can opt to receive earlier and smaller payouts.
• Return worker contributions to Social Security to 6.2 percent. The payroll tax for employees was lowered to 4.2 percent for 2011 and 2012 to help the economy. The cut was sold as a temporary — not permanent — change. This tax break should expire at the end of this year.
• Raise the amount of income that's subjected to the payroll tax for Social Security. The first $110,100 in wages are taxed now.
• Limit the growth of Social Security benefits for higher-income people.
• Allow young people to invest a third of their Social Security contributions into individual retirement accounts, similar to those federal employees now enjoy.
That being said, the retirement age should not be raised for a couple of reasons and if anything it should be moved back to 65. I am still somewhat bitter over the fact the retirement age was raised to 67 for my generation before we even had the ability to vote. I turned 18 in 1985 and just six days before my 16th birthday Ronald Reagan signed H.R. 1900 into law.
The argument today is that people are living longer and thus, should be able to work longer as well. Then, a year after retirement if they would be so kind as to croak so that the benefits they earned no longer have to be paid out. As it stands I will more than likely be unable to retire and will have to work until I die; however, I do have retirement fantasies. One of those fantasies is to be able to retire while I am healthy enough to enjoy it and with enough money that I can maybe go on a trip once a year and that I can afford to eat healthy food. In my retirement fantasy I have to wait until I am 67 to have that retirement (unless I win the lottery, but that is a different fantasy). If the Wisconsin State Journal editorial staff has their way I will now have to wait until I am 70 to retire. So I not only get screwed over by Ronald Reagan before I turn 16—the Wisconsin State Journal wants to screw me over again at 45.
The point that is missed when discussing raising the retirement age is that if I have to work until I am 70 then some kid out of college has to wait three more years for me to retire to get my job. According to the U.S. Census, in 2006 15 percent of the entire U.S. workforce was over the age of 65; 28.9 percent of those older workers were between the ages of 65-79 and 16.3 percent were between 70-74 years of age. Now think about that for a minute ... as of today the unemployment rate in this country is 8.1 percent and we have 15 percent of the population over the current retirement age still in the workforce.
Obviously some of those over 65 and still in the work force are their because they want to. Hey, if you want to work beyond 65 more power to you; however, if you cannot retire because you would not have a financially secure retirement that is another story.
I say lower the retirement age and allow younger workers to get into the workforce and paying taxes. Eliminate the cap on earnings and make damn sure every type of income is taxed. If you have the means to have a comfortable retirement without Social Security then you do not need to collect it. Honestly I would rather see 401k plans and company pensions eliminated and that a real honest to goodness national pension plan be introduced in this country. One that would allow us all to have the ability to retire at 65. Unfortunately that kind of plan would not get any traction in today's political climate.