70 is the New 65

The Center for Retirement Research at Boston College has published a new paper proposing that Social Security’s real retirement age is 70. It is about time someone raised their hand and pointed out the obvious.
Not only are people living longer, they are healthier and capable of working beyond 65 and into their 70’s if they so chose.

Alicia Munnell, Director at the Center, summarizes the paper this way:

  • Due to increases in Social Security’s Delayed Retirement Credit, the effective retirement age is now 70, with monthly benefits reduced for earlier claiming.
  • Benefit levels at 70 appear appropriate given that rising deductions for Medicare and greater benefit taxation have reduced Social Security’s net replacement rates.
  • The shift to 70 should be feasible for many workers given increases in lifespans, health, and education.
  • But vulnerable workers forced to claim early will have low benefits and will be particularly harmed by any further cuts.
  • Policymakers need to inform those who can work that 70 is the new retirement age and devise ways to protect those who cannot work.

Had the Mensch been aware of the benefit of waiting until 70, he would have delayed filing for Social Security for three years and found another source of income.  You can read the whole report at: http://crr.bc.edu/wp-content/uploads/2013/10/IB_13-15.pdf, and determine for yourself if it is applicable to you or clients.

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