Raising the Retirement Age, Fairly

Abstract

A growing chorus of policy analysts is calling for an increase in the Social Security retirement age. Even staunch defenders of Social Security have begun to concede that the retirement age of 66 is too low, in light of the increasing longevity, improving health, and expanding work options of older Americans. Still, some progressives worry that the only way to protect disadvantaged workers is to leave the early and full retirement ages as they are. The result is a debate that pits intergenerational fairness against intragenerational fairness: either we shortchange the young (by paying unneeded benefits to the old) or else we shortchange the disadvantaged (by raising the retirement age to levels that are unrealistic for low-earners).

We can solve the policy deadlock by reframing the question. Policy debates tend to focus on how high the retirement age should rise. But age is, more and more, a contingent category, with shifting physical and social meaning. Instead of beginning with chronological age, we can and should start with a deeper account of the objectives of retirement policy.

These two chapters from A NEW DEAL FOR OLD AGE (Harvard University Press, 2016) lay out criteria for inter- and intragenerational justice and show that it is possible, both technically and politically, to preserve Social Security early retirement for workers who need it while creating financial incentives for better-off workers, still able to work, to delay their Social Security claims. And well-crafted reforms could accomplish this progressive goal while preserving the appearance of universality.

Keywords: Social Security, retirement policy, early retirement, retirement penalty, intergenerational justice

JEL Classification: H1, H2, H55