Friday, November 22, 2013
According to an October 2013 brief from the Center for Retirement Research at Boston College, 70 is the number....at least for when to start drawing Social Security. Alicia Munnell authored the brief, Social Security's Real Retirement Age is 70.
The brief provides an overview of the full retirement age (FRA) (formerly 65) and suggests that
70 has become the new 65. Moreover, the level of monthly benefits at 70 appears appropriate given the increased deductions for Medicare premiums, the greater taxation of benefits, the declining importance of the spouses’ benefit, and the diminished sources of other retirement income...
The report approaches the issues this way: (1) how 70 became the "new 65" for Social Security; (2) is 70 the "right" age when compared to 65, longevity, etc.?; (3) the replacement rates for various ages; (4) FRA "no longer describes the benefit structure; further increases in this benchmark simply reduce replacement rates"; and (5) three conclusions.
In examining the age 70, the report does some interesting comparisons and analysis, including how age 70 today compares to age 65 in 1940, the impact of life expectancy on a person's financial and societal status, and any correlation between 70 and real retirement activities. (pgs. 2-5)
If you cover Social Security retirement in your classes, read this report!