There is a possibility of rising the social security retirement age to 69 in coming years. The idea to increase the retirement age to 69 has been the matter of great concern recently provoked by the financial difficulties of the Social Security program.
The trust fund of the Social Security system that grants benefits to retirees is expected to be depleted by 2033. Due to this, there has been a major problem of deciding the supplement that the foundation can get.
In case this new issue of the retirement keeps its status, it would turn to be a threat of the Social Security benefits that the citizens could have been promised and those citizens’ retirement plans as well. Granting the proposal to raise the retirement age, it is evident that it might exert a severe impact on your Social Security benefits and retirement plans. People would have to work longer and, therefore, would be able to receive full benefits later than they planned, which, in turn, might reduce the amount of their monetary allowance and the years they can spend as retirees.
The Social Security Crisis: What’s at Stake?
Social Security has for many years been a system that worked well for retirees in the United States. But now social security crisis will affect the future generations in the united states. The Social Security trust, which covers old-age benefits, is expected to be empty in 2033. From that time on, the program’s capability of giving the full amount of the benefits that are expected to be paid will be just 77%. The impending disaster of this size naturally leads to talks of possible rescue plans; one of them is the increase of the full retirement age.
It happened in the last century that the social security retirement age was elevated from 65 to 67 which was a step-by-step procedure starting from 1980, if to be particular. The government is the initiator of this decision, and at present, suggestions to lift the retirement age to 69 can be found right among them. The authorities believe that the measure will add the possibility for the system to have its existence prolonged. The raised question is, what will the effect be should you be yanked by the hands from your Social Security benefits?
How Would Raising Social Security Retirement Age Affect You?
For people born after 1960, the full retirement age is currently set at 67. If the labor market were to see the social security retirement age moved up to 69, claimers of the maximum retirement benefits would need to wait for two more years. The age of 62 is considered an early retirement age if you start your own benefits; however, this will bring about a reduction in the amount of the benefits, the age of 69 is the stage at which there will be less time to collect benefits.
This would result in the lifetime benefits of those in the young who were born in the 1970s or 1980s being on average 8% lower. So, on the one hand it is helpful to the Social Security but on the other side, it would only offer the workers two choices that would be difficult to make: either work longer or accept the reduced benefits.
Is This The Solution To Social Security’s Woes?
Even though moving the retirement age up to 69 could take off some of the financial burden from Social Security, experts are skeptical that the system would be fully repaired. According to the Congressional Budget Office (CBO), the trust fund would still run out of funds in 2034, despite the changes proposed. The transition from a lower to a higher retirement age would mean a reduction in the deficit, but it would not be wiped out.
These inequalities can be seen vividly in this idea presented by many policymakers, which show favoritism to those who work in strenuous jobs. As an example such as construction workers, nurses, and factory employees are groups of people often having shorter life expectancies and may have logistical difficulties in continuing on with work when they become older. One of the ways recommended by experts is not for standard solutions that they feel won’t be effective for individuals in such positions as these, but some needing to retire sooner due to resting their bodies from the laboring efforts.
Although the discussions about retiring later are not over yet, the possibility of an increase in the retirement age now makes it even more urgent that you take steps to prepare for retirement. If you are at the beginning of your career or close to retirement, it is very crucial to review your financial plans. You might think of increasing your savings and splitting them into environments of retirement so that you enjoy a financially secure future even if your Social Security benefits are definitely postponed.
Suppose the proposal to raise the social security retirement age is approved and becomes a law of the land. Many Americans might be motivated to save more and at the same time, be more participative in retirement planning. However, there is a warning from the experts that the complexity of the system may hinder decision-making, and the users might take decisions that decline the benefit payment rates permanently and request early pensions.
The Future Of Social Security
Upgrading the Social Security retirement age to 69 seems a possible way of solving the financial inefficiencies of the program, but a part of the problem, it will be far from a panacea. Politicians are still trying to find the best way to deal with the worsening deficit, and the effect on the pockets of the retired people might be worse. This is the time that people should keep on getting updates and make remaining active on preparing for retirement their topmost priorities, whatever changes might occur.
Some states of U.S. are imposing taxes on social security, this could be a concerning matter if you are a retired person. You need to understand the states taxation on social security benefits to save your maximum benefits.
