A liberal think tank, the Center for American Progress (CAP), has raised concerns about a proposed increase in the retirement age, warning it could bring about “significant benefit cuts.”
The Republican Study Committee (RSC), which represents a faction of 170 Republican lawmakers, has suggested pushing the retirement age from 67 to 69 in its recent budget proposals. CAP estimates that such a shift could result in potential losses of up to $6,900 annually for future retirees. The current retirement age of 67 allows workers to claim Social Security benefits without penalties.
In its budget draft for March, the RSC claimed that raising the retirement age is a necessary adjustment to correspond with rising life expectancies. They emphasized that it wouldn’t affect retirees who are already close to or within retirement. Similar claims were reiterated in their budget proposal for 2025.
If the retirement age were indeed increased to 69, those anticipating retiring at 67 could see an average annual loss of $6,900. Individuals who decide to retire at 62 would forfeit around $4,140, while those delaying retirement until 70 could lose approximately $8,892, based on CAP’s analysis.
Furthermore, considering annual Cost of Living Adjustments (COLA), median-wage retirees could stand to lose between $46,104 and $99,252 over a decade in Social Security benefits.
CAP highlighted that a typical retiree turning 62 in 2034 could face a monthly benefit reduction of $345 up to $741, depending on when they choose to start collecting benefits.
“The figures show that increasing the full retirement age would hit future retirees hard, with cuts in benefits that could hinder many from enjoying a secure retirement. This approach reflects the risky and extreme policies that threaten the financial stability of America’s middle and working classes,” CAP argued.
Public sentiment appears to resonate with CAP’s concerns, as recent polls indicate widespread disapproval of raising the retirement age. A Quinnipiac University poll revealed that 78% of Americans oppose increasing the full retirement age for Social Security. Additionally, a Prudential survey found that many nearing retirement age are struggling with inadequate savings, with the median retirement funds for 55-year-olds sitting at just $47,950.