by Patrick Appel

Bruce Bartlett makes some valid points:

[R]aising the normal retirement age won't do much good because 62 has become the de facto normal retirement age. We will have to raise the early retirement age if we want to save money this way.

There are two other points I didn't have space to make that are important. First, I think many people who take early retirement foolishly have a use-it-or-lose-it attitude; they don't realize that benefits rise the longer one waits. I think many also believe that their benefits will be bumped up when they reach the normal retirement age. But the lower benefits one gets when taking early retirement are for life. Consequently, I fear a crisis of poverty among the very old in the not too distant future.

Second, there is an important cost associated with early retirement in the form of restrictions on earned income. Social Security benefits are reduced $1 for every $2 earned above $14,160. That's like a 50% tax that discourages people from working once they have decided to take early retirement. I think this also contributes to poverty among the elderly.

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