Summary of Provisions That Would Change the Social Security Program
Description of Proposed Provisions:
Provisions Affecting Retirement Age
Estimates based on the intermediate assumptions of
the 2024 Trustees Report
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|
Change from current law [percent of payroll] |
Shortfall eliminated | |||||
|---|---|---|---|---|---|---|
|
Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
|||
| Current law shortfall in long-range actuarial balance is 3.50 percent of payroll and in annual balance for the 75th year is 4.64 percent of payroll. | ||||||
| C1.1 |
Starting with those age 62 in 2025, increase the normal retirement age
(NRA) 1 month every 2 years until the NRA reaches 68.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
0.43 | 0.71 | 12% | 15% | |
| C1.2 |
Increase the normal retirement age (NRA) 2 months per year for those age 62
starting in 2025 and ending in 2030 (NRA reaches 68 for those age 62 in 2030).
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick 2005) |
0.53 | 0.71 | 15% | 15% | |
| C1.3 |
Starting for those age 62 in 2025, index the normal retirement age (NRA) to
maintain a constant ratio of expected retirement years (life expectancy at NRA)
to potential work years (NRA minus 20). We assume the NRA will increase 1 month
every 2 years.
graph | table | pdf-graph | pdf-table | memo (Ryan 2010) | memo (AARP 2008) | memo (Ryan 2008) | memo (Social Security Advisory Board 2005) |
0.68 | 1.80 | 19% | 39% | |
| C1.4 |
Increase the normal retirement age (NRA) 2 months per year for those age
62 starting in 2025 and ending in 2036 (NRA reaches 69 for those age 62
in 2036). Thereafter, increase the NRA 1 month every 2 years.
graph | table | pdf-graph | pdf-table | memo (Ribble 2016) | memo (Chaffetz 2011) |
1.32 | 2.56 | 38% | 55% | |
| C1.6 |
Starting with those age 62 in 2025, increase the normal retirement age
(NRA) 1 month every 2 years until the NRA reaches 69. Also increase the
age up to which the delayed retirement credit may be earned at the same
rate (from 70 to 72). No change to earliest eligibility age.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.64 | 1.35 | 18% | 29% | |
| C1.7 |
Increase the normal retirement age (NRA) 3 months per year for those age
62 starting in 2025 and ending in 2032 (NRA reaches 69 for those age 62
in 2032). Increase the age up to which delayed retirement credits may be
earned from 70 to 72 on the same schedule. Increase the widow(er) NRA in
the same manner. The earliest eligibility age (EEA) for worker's and widow(er)'s
benefit is unchanged.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
1.01 | 1.36 | 29% | 29% | |
| C2.1 |
Increase the earliest eligibility age (EEA) by 2 months per year for those
age 62 starting in 2026 and ending in 2043 (EEA reaches 65 for those age
62 in 2043).
graph | table | pdf-graph | pdf-table | memo (AARP 2008) |
-0.10 | -0.44 | -3% | -9% | |
| C2.2 |
Starting for those age 62 in 2025, index the normal retirement age
(NRA) to maintain a constant ratio of expected retirement years (life
expectancy at NRA) to potential work years (NRA minus 20). We assume
the NRA will increase 1 month every 2 years. Also, raise the earliest
eligibility age (EEA) for retired-workers, aged widow(er)s, and disabled
widow(er)s by the same amount as the NRA starting for those attaining
62 in 2025.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA 2010) | memo (Warshawsky 2008) |
0.66 | 1.51 | 19% | 33% | |
| C2.3 |
Starting for those age 62 in 2025, index the normal retirement age (NRA)
to maintain a constant ratio of expected retirement years (life expectancy
at NRA) to potential work years (NRA minus 20). We assume the NRA will
increase 1 month every 2 years. Also, increase the earliest eligibility
age (EEA) by the same amount as the NRA starting for those age 62 in 2025
so as to maintain a 5 year difference between the two ages. Include a
"hardship exemption" with no EEA/NRA change for a worker with 25 years
of earnings (with 4 quarters of coverage each), and average indexed monthly
earnings (AIME) less than 250 percent of the poverty level (wage-indexed
from 2013). The hardship exemption is phased out for those with AIME above
400 percent of the poverty level.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission 2010) |
0.49 | 1.15 | 14% | 25% | |
| C2.4 |
Starting for those age 62 in 2025, increase both the normal retirement age
(NRA) and the earliest eligibility age (EEA) by 36/47 of a month per year
until the NRA and EEA reach 70 and 65 respectively. For each year, the computed
NRA and EEA round down to the next lower full month.
graph | table | pdf-graph | pdf-table | memo (Lummis 2011) |
0.91 | 1.81 | 26% | 39% | |
| C2.5 |
Increase the normal retirement age (NRA) 3 months per year for those
age 62 starting in 2025 and ending in 2036 (NRA reaches 70 for those
age 62 in 2036). Thereafter, index the NRA to maintain a constant ratio
of expected retirement years (life expectancy at NRA) to potential work
years (NRA minus 20). We assume the NRA will increase 1 month every
2 years. Also, increase the earliest eligibility age (EEA) from 62 to
64 at the same time the NRA increases from 67 to 69; that is, for those
attaining age 62 in 2025 through 2032. Keep EEA at 64 thereafter.
graph | table | pdf-graph | pdf-table | memo (Graham, Paul, Lee 2011) |
1.65 | 2.93 | 47% | 63% | |
| C2.6 |
Increase the normal retirement age (NRA) and the earliest eligibility
age (EEA) for those age 62 in 2025-2026 to 68 and 63, respectively, and
then by 3 months per year in 2027-2030 to 69 and 64, respectively.
graph | table | pdf-graph | pdf-table | memo (Hutchison 2011) |
0.92 | 1.05 | 26% | 23% | |
| C2.7 |
Increase the normal retirement age (NRA) and the earliest eligibility
age (EEA) for those age 62 starting in 2025 by 3 months per year until
EEA reaches 64 in 2032 and NRA reaches 69 in 2032.
graph | table | pdf-graph | pdf-table | memo (Hutchison 2011) |
0.86 | 1.05 | 25% | 23% | |
| C2.8 |
Starting in 2027, convert all disabled-worker beneficiaries to
retired-worker status upon attainment of their earliest eligibility
age (EEA) rather than their normal retirement age (NRA). After
conversion, apply the early retirement reduction for retirement
at EEA (currently 30 percent for those age 62 in 2027) phased
in over 40 years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky 2008) |
0.38 | 0.68 | 11% | 15% | |