RE: Raising the Retirement Age

[National Dialogue Moderator <moderator>]

Raising the retirement age has a lot of appeal. It is a demographic 
solution to a demographic problem. If the retirement age had been indexed 
to increases in life expectancy since the program was established, the 
current normal retirement age would be over age 70. People are not only 
living longer -- they are healthier. And with fewer young people, the labor 
market is going to need to use the talents of older workers. Can we really 
afford to have people spend less than a third of their lives in the 
workforce? 

That being said, raising the retirement age is one of the most unpopular 
policy options being considered. The public wants to retire earlier -- not 
later. In fact, a recent survey indicated that few people are aware that 
the normal retirement age will begin to increase next year! Organized labor 
opposes the idea and many employers, especially those in the manufacturing 
sector, also object. They are concerned about the added cost of providing 
pension plans and health care for older workers. There are legitimate 
concerns about the ability of some workers to continue working. Disability 
programs would have to be expanded to accommodate these workers. Other 
workers may be willing and able to delay retirement. An increasing share of 
our economy is made up by service industries. Workers in this sector have 
fewer physical demands put on them and may be in a better position to work 
longer.

What we need to do is start developing a more flexible policy toward 
retirement. At a minimum, we should remove barriers to people delaying 
retirement. Perhaps there should be incentives to wait. The earnings limit 
should be repealed. Workers who delay collecting benefits altogether should 
have their benefits adjusted upward to reflect the fact that they will be 
collecting them for a shorter period of time. We need to think about ways 
to make it easier for older workers to phase into retirement. Perhaps they 
should be able to collect partial benefits from Social Security and private 
pensions while they continue to work part-time.

We have to figure out how to balance people's desire for more leisure with 
the demands of an aging society and an economy strapped for workers.

Ann Combs