YOU DECIDE: Is It Necessary to Raise the Retirement Age?

Nikki Haley is campaigning to win the Republican Party presidential nomination. She recently proposed raising the age when Americans can collect Social Security retirement benefits. The idea of making people wait longer to receive money after their working career ends is controversial. Haley believes this change is necessary in order to save Social Security. 

Social Security is a government program that provides Americans with a source of income when they retire. When the program began in 1935, people became fully qualified for retirement money when they turned 65 years old. In 1983, Congress raised the age of eligibility to 67 years old for anyone born in 1960 or later. Now, Haley proposes that the age should be pushed back again. Haley didn’t set a specific age, but others who support this change believe it should be adjusted to 69 or 70 years of age. 

How Does Social Security Work? 

Most Americans who work are required to pay part of every paycheck toward Social Security. Currently, 6.2 percent of the money an employee earns goes toward Social Security. Employers also pay 6.2 percent of an employee’s salary into the program. The government then uses that money to pay people currently receiving Social Security benefits. If there is any money left over after Social Security payments are made, it goes into a special fund. This fund, called the Old-Age and Survivors Insurance Trust Fund (OASI), is then used if there isn’t enough money coming from paycheck contributions. 

Currently, about 67 million Americans receive Social Security benefits. On average, they get about $1,800 per month. The most anyone can be paid is $3,627 per month. The amount someone earns in retirement is based on how much they made while working. Someone who had a higher salary during their working career will obtain a higher monthly Social Security retirement check than someone who earned less.  

Social Security’s Current Problems 

More people are now retiring every day than are entering the workforce. This is happening because Americans are having fewer children and living longer today than in the past. That trend is expected to continue. The payroll contributions are not keeping up with the withdrawals from the Social Security fund. The Congressional Budget Office predicts that OASI funds may run out as early as 2032. Americans then would experience a reduction in Social Security benefits of as much as 25 percent. That means someone currently receiving $1800 a month would only get $1350. 

So, YOU DECIDE: Is it Necessary to Raise the Retirement Age? 

YES 

• Under the current system, the fund to pay Social Security retirement benefits will run out soon.  
• When it does, the government might have to cut the monthly benefit retirees receive. 
• This cut could make it hard for many people to pay their bills. It also will hurt the economy in general. 
• Raising the age when people can collect retirement benefits will save a lot of money. This is because fewer people will receive Social Security payments every month. 
• By doing this, the government will not have to reduce the amount people earn in retirement each month. 

NO 

• Having to wait until 70 years old will be hard for many people who might not be able to work that long.  
• There are other options than raising the age. 
• Instead of raising the age, the government can increase the amount employers and employees pay from their monthly paycheck. Doing this will provide more money to pay retirees. 
• Another idea is to pay lower amounts of Social Security benefits to the wealthy. These individuals already are earning money in retirement from other sources, or they have gained enough wealth during their working careers. 
• Finally, the limit on the paycheck tax can be raised. Currently, wages above $160,200 are not subject to the tax. By raising the wage limit to $250,000 the government will have more available money to use toward Social Security.