How much does changing retirement age ease the burden in the current system? Say we move it back one year from 67 to 68.
I don't have anywhere near enough data to answer this but I can point out a few things:
One advantage of raising the age as opposed to raising the rate is the increasing the age helps you on both sides of the equation. It decreases the payout by decreasing the number of retirees (because they have to wait longer to collect) AND it increases the receipts by increasing the amount of contributions because the people who continue to work for extra time while awaiting SSI eligibility are contributing longer. Raising the rate only helps on the revenue side of the equation, not both.
When the program was established (1937) US Life expectancy was 59.7 (58.0 for men, 62.4 for women) and the retirement age was 65 which was MORE than life expectancy. To match that we'd have to raise the age today to beyond 80.
That said, I don't think that makes sense. Opponents of raising the age point out that quality of life still declines past a certain age and they have a point. A BIG part of the reason that LE has increased so much is that we have things like antibiotics so basically nobody dies of mumps, scarlet fever, etc anymore. Those things REALLY pulled down LE because they could kill people in their 30s and 40*s. However, back then when LE was <60 we did still have some 90 and 100 year olds which is up to 67% beyond LE but today with LE at almost 80 we do NOT have any 133 year olds. Why? The reason is that the human body simply wears out at a certain point. Back before modern medicine if you managed to get lucky and avoid mumps/measles/scarlet fever, etc you could still be a healthy worker at 65 even though that was OVER the existing LE but today there aren't a lot of healthy 85 year old workers.
Just based on what I've seen in my family (which admittedly is anecdotal) I don't think a retirement age north of about 70 is realistic. Neither of my parents would have been able to work much past 70 regardless. My dad's dementia/Alzheimer's started to be noticeable in his early 70s and my mom's general health situation wouldn't have permitted her to work much past 70 either. I think that is true for a lot of people. There obviously exceptions who couldn't functionally work much past 50 and exceptions on the other end who could still be clocking in every morning at 85 but those are, IMHO, exceptions not the rule.
*An example from my family:
I've mentioned my 2-great Grandfather who fought in the Civil War. His father (my 3-great Grandfather) was born in 1809 and died at 36 years old in 1845. He died of Scarlet Fever. Here is the part that interests me, he *should* have lived much longer:
- 55 - His Grandfather was born in 1751 and died in 1806
- 69 - His Father outlived him, born in 1780 and died in 1849
- 36 - He was born in 1809 and died in 1845 of Scarlet Fever
- 76 - His son was born in 1842, served in the Civil War and lived until 1918
- 98 - His Grandson (my great-grandfather) was born in 1875 and died in 1973
- 103 - His Great-Grandaughter (my Grandmother) was born in 1909 and died in 2012
This kind of thing REALLY pulled LE down. If you just average his father and his son you get 72.5 and he died at HALF that age.
Note that the average for those six individuals is 73 but if you take out the one who died of Scarlet Fever at 36 the average increases to 80 so it makes a big difference.
