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A Bit More on Raising the Retirement Age for Social Security

James Garren writes in with a response to Wednesday's post opposing an increase in the Social Security retirement age:

I am actually for raising the retirement age to 70, for essentially all the familiar reasons. However, I think your point about the real hardship this would impose on people with relatively strenuous occupations is worth answering.

As someone who used to represent disabled workers before the SSA, I would simply remind you that Social Security retirement benefits are not the only kind of Social Security benefits out there, as people often forget. The truth is that right now a quite significant number of individuals in the 60-65 age range qualify for disability benefits. The requirements for qualifying at that age are extremely light (specifically, you need only show that you are no longer capable of performing your old job, or another one with directly transferable skills). Presumably, with the retirement age rising to 70, there would be a large number of individuals 65-70, the people that you are concerned about, that would qualify for disability benefits anyway. I would certainly advocate that any bill raising the retirement age to 70 would contain another provision adding that age bracket to disability law with more relaxed disability standards.

As for the rest, who are in relatively good health, they will certainly not like having to work another five years, but can at least take solace in the fact that their plight is in part caused by their drastically improved life expectancy.

I don't really like the idea of stretching the disability program so aggressively, in part because there could be political dangers to that: 10 years later, when Republicans take aim at that program and begin filling the papers with stories of able-bodied seniors collecting something called "disability benefits" which they occasionally use to go skiing, you could see that move create a vulnerability at the center of a really important program. But it's an interesting idea, and the larger point is that there are certainly a lot of clever ways to construct the program such that workers with lower incomes and rougher jobs aren't penalized by an increase in the retirement age. But clever programs are also vulnerable programs, and one of the things that accounts for the public's confidence in Social Security is that it's admirably straightforward.

By Ezra Klein  |  August 20, 2009; 12:57 PM ET
Categories:  Social Security  
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On a related note I'd be curious the get James' take (and your take Ezra) on whether the proposed health reform might funnel off the people who apply for SSDI as a means to eventually getting on Medicare; particulary those who might be able to still work, just maybe not at something as high-paying as they once did? Once the new plans have guaranteed issue, is there any possibility that this subset of people (I have no idea how common this is, I only know of it anecdotally) will forego SSDI (and, therefore, keep working and contributing the economy) and Medicare?

Posted by: ThomasEN | August 20, 2009 1:38 PM | Report abuse

Pull a George Bush and just change the name to "Difficulty Benefits."

Posted by: JEinATL | August 20, 2009 1:40 PM | Report abuse

So basically now people in rough and tumble jobs have to work until they are 70 or they are literally too broken down to do their job? No thank you!

Posted by: Drew_Miller_Hates_IDs_That_Dont_Allow_Spaces | August 20, 2009 1:51 PM | Report abuse

Honestly! Disability! It is incredibly difficult to get SS Disability. You need to hire a lawyer to get it. And you want to put even more people through this arduous process and legalistic jungle? 70% of initial claims get turned down. 50% of adjudicated claims get turned down. That means 35% of all claims get turned down completely. Rates of rejection also vary wildly be region, so that a person with a disability in one part of the country might get turned down for the same disability somewhere else.

If you have to hire a lawyer to get your social security and you have a substantial risk of failure, that is NOT a safety net or a palliative or alternative for raising the retirement age. The incredible callousness of the comfortably off staggers me. The majority of workers need to retire BEFORE age 70; the comfortable fanny workers who delight in their argumentation online may be allowed to voluntarily retire at 70. Which incidentally you can do right now. Forgo retirement until 70, get higher benefits.

Posted by: carolcarre | August 20, 2009 2:10 PM | Report abuse

Wouldn't that raise the cost of disability benefits and not help SSA solvency?

Posted by: ideallydc | August 20, 2009 2:12 PM | Report abuse

i know its impossible to do but I'd love to see a system that had 65 for blue collar jobs and 70 for white collar. White collar can handle it but i agree that blue collar may not be able to and in fact 65 is difficult for many in blue collar.

Posted by: visionbrkr | August 20, 2009 2:17 PM | Report abuse

Hello, this is James, I just wanted to respond to one or two of the points in the comments here. To Carolcarre's point, I know very well how difficult applying or SSDI or SSI is, but it should be mentioned that the statistics you cite on denials takes in to account all age groups. I don't know the statistics for denials at 60+, but let's just say that as a rep, I did not have many folks over 60 as clients, because they very seldom require representation. That said, the point is well taken, and we should absolutely be working to improve the adjudication process.

As to IdeallyDC's point on costs, I don't really think so... Under any scenario where we raise the retirement age, some number of additional people 65-70 would claim disability benefits. The only thing I'm proposing which would reduce the cost savings is creating a new 65-70 bracket with easier disability requirements, and that, I think would be relatively minimal, but I'd love see someone run the numbers on that.

Posted by: Nemo1342 | August 20, 2009 2:31 PM | Report abuse

There is also early benefits starting at age 62. Yes, the benefit is smaller, but you get it for three-five years before the max age is reached. I figured that it would take me 11 years on maximum benefits to make back what I could have gotten applying at age 62, and took the early benefit. If they added Medicare at 62, that would really open up jobs for younger people.

Posted by: Mimikatz | August 20, 2009 2:50 PM | Report abuse

Frankly, I don't mind this but part of the calculation must include the likelihood of any of these people actually being able to find employment up to their 70th year.

That's not a sure thing even for people over fifty (hint: check the stats).

Posted by: leoklein | August 20, 2009 2:56 PM | Report abuse

Checked out SSI rates lately? 2009: "$674 for an eligible individual, $1,011 for an eligible individual with an eligible spouse"
Think you could live on that?

Posted by: bjones22 | August 20, 2009 2:59 PM | Report abuse

Let's be clear about what's going on here. Social Security is solvent and will remain so with no changes for at least a couple of decades. Social Security has been overfunded and subsidizing the rest of the federal government for 25 years. All the various proposals to "reform" Social Security are just attempts to keep that gravy train going. The rest of the government has been borrowing money from SS for decades and now they just don't want to pay it back. The problem isn't Social Security, it's that the rest of the government is chronically underfunded.

Posted by: tl_houston | August 20, 2009 2:59 PM | Report abuse

Yeah, I actually did the math on taking early retirement v. full retirement once, and found that it came down to sorting out how long you thought you were going to live. The longer you live, the better full retirement is... wish I'd saved the numbers, but yeah, it's can be a good option.

Posted by: Nemo1342 | August 20, 2009 3:01 PM | Report abuse

I always thought a good solution would be to raise the age of SS eligibility, but offer people the option to waive SS over the age of 65 with the benefit of paying no income tax on primary incomes.

There are details that would make it tricky, but I think it's a good starting point. Offering incentives to people to voluntarily defer SS in the form of a tax waiver they would not have otherwise used.

Posted by: jdi450 | August 20, 2009 3:18 PM | Report abuse

Actually, to answer Ezra's political concern, one of the things that makes the idea attractive to me is that it broadens the constituency with "skin in the game", so to speak, which might hasten a push to reform the adjudication process that Carolcarre is so upset about. Isn't that sort of the flip side of the concern you raised some days ago about lowering the Medicare eligibility age?

Posted by: Nemo1342 | August 20, 2009 4:54 PM | Report abuse

James: I believe that the trend on disability benefits is to tighten them so "malingerers" won't get them. The judge's personal definition of malingerer is what makes the process so uneven. If the goal is to push retirement out to age 7o to "save" SocSec, I don't believe that there would be a simultaneous drive to ease the disability requirements for those over 60. Au contraire.

The fact that SocSec could easily be saved as it is by lifting the cap on taxed salaries, and by taxing benefits (to be considered a part of retirement income from all sources) for those making (whatever form of income)in excess of the highest SocSec disbursement (so that by a certain income level, the benefits are in effect zeroed out by the resultant taxes) makes the discussion about raising the retirement age silly and peculiarly mean-spirited.

Posted by: carolcarre | August 20, 2009 5:59 PM | Report abuse

taking what nemo said in a different direction, if life expectancies are rising (and I hope it's years of non-befuddlement and decent mobility that are rising, not just years however experienced), then there could be both rising retirement ages and increasing years spent retired.

Posted by: gagkk | August 20, 2009 10:23 PM | Report abuse

...But clever programs are also vulnerable programs, and one of the things that accounts for the public's confidence in Social Security is that it's admirably straightforward...

Excellent insight. You might consider applying it to the Democrats' troubles in the current health care reform debate.

Posted by: amileoj | August 20, 2009 11:29 PM | Report abuse

Where are all the jobs for people over 50 going to come from?

Truly, raising the retirement age is a proposal that only a pundit or congressman could love.

Posted by: serialcatowner | August 21, 2009 10:16 AM | Report abuse

Disability is not the same thing as being 65 and not being able to work on a road gang or in roofing any more. James Garran should perhaps work in that job for a couple of years before he shoots his mouth off.

Posted by: pj_camp | August 21, 2009 7:40 PM | Report abuse

you young whippersnappers, got no idea what it's like. you don't have to work in construction not to be unable to work past 62. in fact, even retiting at 62 is pushing the envelope of productivity. ask your Walmart greeter how easy it is to stand on your feet all day. and, you have to be unemployable for 1 whole year to qualify for s.s. disability. i've always wondered what a disabled person's supposed to do to survive in that year. i guarantee you kids, once you reach 55, you'll regret you ever suggested such an idea.

Posted by: marydem | August 23, 2009 10:30 PM | Report abuse

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