Rebecca Vallas, Jackie Odum and Rachel West of the Center for American Progress argue that increasing the Social Security retirement age – currently 66 – is a bad way to move the program toward solvency:
Social Security’s benefit structure is progressive—that is, benefits replace a greater share of wages for lower-income workers, in part because they contribute a larger portion of their earnings in payroll taxes during their working years. Yet when viewed across beneficiaries’ lifetimes, the program’s progressivity has been deteriorating due to the widening gap in life expectancy between rich and poor Americans.
As I’ve argued elsewhere, linking Social Security’s retirement age to differential mortality between rich and poor misunderstands how Social Security works, because an increase in the retirement age is nothing other than a uniform percentage cut in everyone’s benefits. I can think of many reason why you wouldn’t want to fix Social Security with an across-the-board benefit cut, but the link to differing longevity for rich and poor – while seemingly intuitive – isn’t one of them.Read more!