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Should we raise the retirement age?

A new survey indicates that affluent Americans favor raising the age for Social Security eligibility.

By Karen Datko Feb 29, 2012 7:14PM

Well-to-do Americans think the government should raise the age at which people can begin receiving Social Security benefits, considering how long people are living these days, according to a new survey by Bank of America.

 

About 59% of the 1,000 people with investable assets of $250,000 or more who were surveyed felt that way.

 

Not surprisingly, that view wasn't welcomed by all who commented on the Bloomberg article about it.

 

"How about if the More Affluent start paying into Social Security on all their wages and income, not just the first $92K (or whatever the cap is)?" one reader wrote. Actually, the cap this year is $110,000, but we get your point. (Post continues below.)

The recommendation of the affluent makes sense within their personal context. The survey found that:

  • Only one in four define retirement as "never working again."
  • Only 14% of those over 50 and still working tie retirement to "hitting a certain age," and 19% don't plan to retire at all.
  • Only 20% of those under 62 said they plan to begin collecting Social Security before they reach their full retirement age, which is 66 now and will gradually increase to 67 under current rules. (When is your full retirement age? Try Social Security's calculator.)

On average, those who responded to a separate Wells Fargo survey of people with at least $100,000 in investable assets said Social Security will provide only 23% of their retirement income.

The B of A survey didn't ask respondents to pick an age they'd raise Social Security eligibility to. However, age 70 has been tossed about. And there are objections to doing that. Among them:

  • Those who take Social Security early -- at age 62 -- are already penalized by getting only 75% of the full benefit, and that percentage is already set to decline as the full retirement age rises.
  • Many workers -- 39% in one recent survey -- are already planning to stay in the workforce longer. (It should be noted that those who delay taking Social Security until after their full retirement age get a bigger check.)
  • People with physically demanding jobs may not be capable of working longer, and they might not have the savings to see them through if Social Security begins later. In 2008, Social Security represented 90% or more of retirement income for a third of retirees, U.S. News & World Report says.

What do you think? Are these affluent people on to something? Perhaps. But, that B of A survey also found that "62% of respondents over the age of 50 have not estimated what their health care costs may be during retirement -- despite the fact that rising health care costs are their top financial concern." Thank goodness there's Medicare.

 

Some affluent people have other ideas about how Social Security and Medicare could be changed. Bloomberg also said that 47% of those in the Wells Fargo survey "were willing to take a cut in Social Security or Medicare benefits if the money went to reducing the U.S. debt."

 

More on MSN Money:

7Comments
Mar 1, 2012 4:06PM
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That is not true, only the Military gets to retire at 20 years and they still have to work when they are done. they get 50% of just their base pay not their total pay after 20 years. So do your research before posting erroneous info.
Mar 2, 2012 11:16AM
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People with physically demanding jobs may not be capable of working longer

 

the problem is, that it's very hard to get Social Security disability, and most people don't have savings to make up for it.  It takes years to get SSD approved.  My spouse and I both 'retired' early (although I still do taxes in the busy season) due to health issues.  We lived off savings until we could get 'early' SS at 62.   I have had 5 ops for arthritis (3 hip replacements, a neck fusion and knee 'scope), have asthma and high blood pressure, Spouse has arthritis, and high BP.  I have a client who can barely walk due to a car accident and works as a greeter at Wal-Mart while waiting to turn 62.  Another whose body is so twisted and uses a walker due to something I can't pronounce was finally awarded disability after almost three years and spending his entire life-savings.

Mar 1, 2012 6:58PM
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when ss was developed, it was intended to have regular adjustments based on life expectancy. those adjustments never happened.
Apr 18, 2012 3:10PM
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Sure,go ahead and raise the age for SSI. All that will do is drive more people to hire a ambulance chasing lawyer and have him sue for SSI disability. There is no age eligibilty for disability. It causes justified disability claims to be delayed, until you hire a lawyer. Then he cleans up on the back pay, and goes on to his next  easy paycheck. People should not have to hire a lawyer to receive legitimate disability claims.
Mar 2, 2012 12:42AM
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Please define "very little" for government employee benefits. My husband is required to contribute 7 percent of his income just for his pension, plus the cost of health insurance both now and in retirement and so on. We cannot afford to add me to his health insurance because it would cost 12 percent of our yearly income. 
Please also note that government employee pay is quite low compared to the private sector, especially for the education and experience required. For example, I used to apply for office assistant positions at our local university, but gave up when they raised the minimum requirements to a bachelor's degree and three to five years experience. This is for a position that pays $1500 per month. It's not worth it. 
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Social security will provide just over half of my retirement if I wait until age 70 to collect. I like the idea of no cap. Everyone pays social security on all of their income. I think the great depression and the recent continuing recession has taught us that we need the social safety net. I would not trust the private sector for all of my retirement.  We had to bail out the private sector and they'll snooker us again unless we're vigilant. Ending exclusionary zoning would also help maximize the probability that people could take care of themselves. Just go  to change dot org and do a search of 'exclusionary zoning' and my petition to end it will come up.
Mar 1, 2012 12:21PM
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I think the all the government employees should be held to the same retirment age as the rest of us working folk.  Public employees only have to work 20 years they can retire and receive full benefits on the backs of the rest of us that have to work until our mid to late 60's is just very unfair.  Hey Mr. Obama where is the fairness and everybody do their fair share with this group of employees?  Oh yeah, did I mention that public employees contribute very little to their own benefits?

 

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