Study: Boosting retirement age would be boon to retirees

“Increasing the EEA (Earliest Eligibility Age), while of small importance to Social Security’s finances, could significantly increase retirement incomes while boosting the economy and federal tax revenues,” states the report, the Retirement Policy Outlook.  

“Some individuals could not work longer due to poor health, but the health status of older Americans has improved significantly while the physical demands of work have declined,” the report adds. “The evidence indicates that most Americans could work longer and would benefit from doing so.” 

The report states increasing the early retirement age from 62 to 65 would: 

• Prolong the Social Security trust fund by roughly five years, from 2037 to 2042, which it deems a modest improvement 

• Significantly increase (by about 16 percent, or $7,500 per year) both Social Security benefits and private pensions once individuals do retire.

• Boost GDP by around 5 percent, adding billions to the economy and tax revenues. 

The report notes that raising the early retirement age might “be one of the most effective options available for improving retirement-income security and would improve the federal budget in one year as much as the recent health reform bill was projected to do over ten years.”

A copy of the report can be found at: http://www.aei.org/docLib/RPO-2010-10-No.-3-g.pdf.