Yale Law School professor Anne L. Alstott has made the shocking recommendation that the Social Security retirement age should be raised to 76 to make it fairer.
She has made a number of other recommendations to go along with raising the retirement age in stages to what may seem like a late age, all of which are designed to make modern retirement benefits fit the new realities of aging.
Social Security should be made fairer for low wage earners, who often are forced to retire earlier because of health reason than their affluent counterparts, Alstott says, and spousal benefits should be eliminated to reflect a society where most women now work and have their own benefits.
Alstott is the Jacquin D. Bierman Professor in Taxation at Yale Law School and the author of a new book A New Deal for Old Age: Toward a Progressive Retirement, published by Harvard University Press.
The inequality that has transformed America’s workplace has also unfairly transformed retirement, she says.
“Americans at the top enjoy secure jobs, stable families and ample opportunity for their children, while those at the bottom struggle with low wages, disrupted families and dismal prospects for the next generation,” Alstott says.
“The stakes for the nation could not be higher,” she says. “The budgetary cost of Social Security retirement benefits and retirement tax subsidies is formidable -- more than three-quarters of a trillion dollars annually.” But the real problem is the injustice between and within age groups.
“What has largely escaped notice is that the hard-core inequality that has divided America is also undermining our nation’s proudest experiment in equality -- the Social Security retirement system,” she says. To return that system to fairness, not just fiscal soundness, a number of reforms are necessary.
For the well-off, 65 now represents late middle age, while many low wage earners struggle to stay in the workforce until age 65. At the same time, Social Security spousal benefits are based on the old assumption that the wife does not work and needs to get money (usually half of what the husband receives) under his earnings record.
While the retirement age is raised to 76, consideration should be given to low wage earners and those with physically demanding jobs. “The result is that the system would remain universal in the options it offers: Everyone could choose the retirement timing that works for her. But baked into the benefit calculation would be a timing preference for low-earning workers,” she explains.