The Problem With the Retirement Age Is That It’s Too High

The richest society in human history should prioritize earlier eligibility for Social Security.

A "happy retirement" balloon tied to a rock that impedes its flight
Illustration by The Atlantic. Source: Getty

As France is racked by furious protests over President Emmanuel Macron’s plan for pension cuts, a bipartisan group of legislators on Capitol Hill is discussing how to make Social Security available to a smaller group of workers. People are living longer, the argument goes, and benefit programs are running out of money. Shifting the retirement age higher is a reasonable, desirable, and necessary fix.

Except it is not reasonable. It is not desirable. And it is not necessary. Indeed, the opposite is true: Politicians should let Americans retire with security and dignity by making retirement benefits more generous and by promising to lower the retirement age.

Lifting the age at which retirees can receive their full Social Security benefits is one of those policies that sound sober and prudent on the face of it. The Congressional Budget Office projects that the Social Security trust fund will run out of money 10 years from now in part because current beneficiaries got such a large cost-of-living adjustment this year. The ostensibly obvious solution is to have Americans work a little longer before they can access their full benefits—something that will help the country avoid turning into Japan, whose productivity and GDP have sagged as the elderly make up an ever larger share of the population.

In reality, raising the retirement age is the fetishistic obsession of a tiny sliver of Beltway wonks, people wholly out of step with what average Americans want and need. There is more than one way to keep the United States from turning into Japan. One is to admit millions of additional immigrants—something proven to increase the number of start-ups and help the rate of economic growth. The U.S. could also establish a child allowance and a rational paid-leave policy to help families that want more kids.

Similarly, there is more than one way to fix Social Security’s eventual financing challenges. Right now the payroll tax that raises money for the program applies to only the first $160,200 of a person’s wage income; if you make $300,000 a year, $139,800 of that money remains untouched by the relevant tax. This is unfair: There’s no good reason that millionaires should pay a lower tax rate than their assistants do to help finance the country’s retirement benefits. (And there’s no reason to make the tax liability max out even if benefits do; we want progressive taxes and progressive spending.) It is also silly, given the importance of Social Security in ending elderly poverty and letting people retire with confidence. Lifting the payroll-tax cap would secure the program’s financing for decades, depending on wage and longevity trends.

Those longevity trends do not really show all Americans enjoying a long and healthy life. In 1980, 50-year-olds in the top income quintile could expect to live four or five years longer than 50-year-olds in the bottom income quintile. In 2010, the rich were living 13 or 14 years longer than the poor. And now average life expectancy is dropping because of the coronavirus pandemic, the opioid epidemic, and the prevalence of gun violence.

The number of healthy years that lower-income Americans can expect to enjoy by the time they hit middle age is also lower than you might think. What some researchers call health span—meaning the length of time a person spends living without major illness or disability—is heavily predicated on a person’s socioeconomic status. The rich get to retire and have fun; the poor have to work until their body starts to give out.

The people arguing that Americans should work until they are 70 are typically people with cushy, remunerative white-collar jobs—the types of jobs that are fun and intellectually engaging for octogenarians. Most people do not have those jobs, especially not older workers without a college degree. That’s why the average lower-income American quits working and applies for Social Security as soon as they are eligible, trading a lower monthly benefit for the ability to stop changing car tires or working a cash register for $11 an hour at age 62.

That is perhaps the strongest argument for lowering the retirement age rather than raising it: Earlier retirement is what the American people obviously want, given how they behave. Poll after poll after poll shows that both Democrats and Republicans strongly support leaving benefits alone. And survey after survey shows that older Americans seek retirement as soon as is practical, with one-third of people taking benefits at 62 and more than half accepting reduced benefits for the chance to quit working before the current “full” retirement age of 66.

There is no good reason for the government to force such people to continue toiling away at their job toward the end of their life. We live in the wealthiest society the world has ever known. We have dozens of policy options available to increase employment among prime-age workers, help all Americans live a healthier life, and lift productivity and GDP. It would be straightforward to fully finance Social Security with some simple tax changes, ones that would have the benefit of making the tax code fairer and more progressive. And it would be straightforward to give workers what they want by letting them accept full retirement benefits at age 62 or 65 rather than at 67.