A liberal public policy think tank has said that raising the retirement age by two years could lead to “drastic benefit cuts.”
The Center for American Progress (CAP) has warned that raising the retirement age from 67 to 69, a proposal earmarked by the Republican Study Committee (RSC) in its two previous budgets, could cost future retirees as much as $6,900 per year. The current retirement age of 67 is the earliest at which workers can begin claiming Social Security benefits without any financial penalty for claiming early.
The Republican Study Committee, comprising 170 GOP lawmakers including numerous allies of Donald Trump, published a budget proposal for March this year that would include “modest adjustments to the retirement age for future retirees, to account for increases in life expectancy.” The budget said it would not “cut or delay retirement benefits for any senior in or near retirement.” Near identical statements are made in the RSC’s 2025 budget proposal.
CAP said a two-year rise in the full retirement age would “cut benefits for all new retirees between roughly 12.5 percent and 14.3 percent by the time it is fully phased in.” It said that it would cost a “median-wage retiree who earned $70,000 in 2022 and turns 62 in 2034 thousands of dollars every year.” Newsweek has contacted the RSC for comment via email outside of normal working hours.
In the event of a full retirement age raise from 67 to 69, those who plan to retire at 67 would lose an average of $6,900 after one year. Those who retire at 62, the earliest age at which Social Security retirement checks can be claimed, would lose $4,140, and those who delay their retirement until they turn 70 would lose $8,892, according to CAP’s calculations.
The think tank reported that after accounting for Cost of Living Adjustment (COLA) increases each year, the median-wage retiree would lose between $46,104 and $99,252 after 10 years of receiving Social Security.
“The median-wage retiree turning 62 in 2034 would have their monthly benefit cut between $345 and $741, depending on the age at which they claimed benefits,” CAP explained.
“The data are clear: Raising the FRA would cut benefits by thousands of dollars per year for a population that has not shown significant interest in delaying retirement,” CAP said. “This is both a poor outcome for any American hoping to retire with enough resources to make ends meet and an example of how dangerous and extreme far-right policy ideas would pull the rug out from under America’s middle and working classes.”
Polling conducted this year shows the vast majority of Americans are against raising the retirement age. A Quinnipiac University national poll found 78 percent of respondents are opposed to raising the full retirement age for Social Security benefits from 67 to 70. A recent survey conducted by Prudential investments found that many pre-retirees are well behind on their savings for a life post-work, with the median average retirement savings of 55 year olds found to be $47,950.
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