Why There’s No Longer a Standard Retirement Age

There is no longer a set or standard retirement age in this country. According to an article by USA Today, there are now four acceptable ages, depending upon each individual’s circumstances.

Here’s a look at each one and why someone might choose to retire at that particular age:

• 62 – According to two respected annual surveys, from the Employee Benefit Research Institute and the Transamerica Center for Retirement Studies, this is the most common retirement age in the country. Additionally, 62 is also the most popular year for claiming Social Security. 
• 65 – Years ago, 65 was viewed as the expected retirement age. That’s probably because that was when you could start receiving Social Security. Things changed in the 1980s when Social Security started raising the full retirement age to 67. However, 65 remains a popular age to retire because that is when you can start taking Medicare.
• 67 – This is now considered the “normal” retirement age for anyone born in 1960 or later. If you claim Social Security at 67, you will receive your “full” benefit. If you claim earlier, you will receive less.
• 70 – Some people choose to wait until 70 to retire so that they can receive bigger Social Security benefits. If you do not start collecting at 67, you get an 8 percent bonus each year, but that ends at 70.

Many experts believe that raising the full retirement age beyond 67 will help shore up Social Security’s solvency issues. Right now, it’s facing a major funding shortfall, and the trust fund could reach a deficit in the next few years. When that happens, benefits will be cut by more than 20 percent.

A Better Solution

The Seniors Trust believes the best solution to solving the Social Security solvency issue is The Social Security Expansion Act. This landmark bill buttresses the long-term solvency of Social Security by expanding benefits for seniors — not cutting them — and not making seniors work more.

If passed, this legislation will make four major changes to Social Security for retirees:

• Benefits will be increased for most recipients by about $200 per month.
• The Consumer Price Index for the Elderly (CPI-E) will be used to calculate Social Security Cost-of-Living Adjustments (COLAs) instead of the Consumer Price Index for Urban Wage Earners (CPI-W) used currently. The CPI-E takes the unique spending habits of seniors into account — particularly regarding the cost of healthcare — and offers a more realistic COLA for retirees.
• The minimum Social Security benefits would be increased to provide higher payments to seniors and greatly reduce senior poverty.
• The long-term solvency of the Social Security program would be guaranteed.