Much of the discussion about the Simpson-Bowles Social Security proposal has centered around its provision to gradually increase the benefit eligibility age.  One would be hard-pressed to accurately understand this provision given the nature of much public commentary about it.  As the piece at the attached link explains, the provision is extremely gradual.  It's four times slower than the age increase that recently occurred at the beginning of this last decade, and is slower on average than the current-law changes taking place over the first quarter of the 21st century.  Today's 26-year-old worker would see his/her eligibility age altered under the provision by all of one year.

The plan's alterations to Social Security's early eligibility age (EEA) would still allow workers to claim benefits younger than they could earlier in Social Security history.  My four-year-old daughter would actually be eligible to claim benefits at a younger age than could the generation that fought the Spanish-American war, despite the gains in health and longevity since then.

Contrary to some criticisms, the co-chairs did not ignore the issue of differential mortality rates for those in physical labor jobs.  Social Security has various components, including a "disability" insurance program for those physically unable to work, and an "old-age and survivors" insurance program in which benefits are paid irrespective of one's ability to work.  The proposed eligibility age changes pertain to the "old-age" program, not to the component of Social Security aimed at those suffering from job-related physical difficulties.  Moreover, as my attached piece details, the plan also includes various provisions to increase retirement benefit claim flexibility for those in physical labor jobs.

Finally, it needs to be understood that under both current law and regulation, advanced age is a factor that explicitly allows for more lenient determinations of eligibility for disability benefits.  To the extent that the proposal increases the retirement eligibility age, more workers would be able to benefit from these features of current law.

This is my attempt to clear up some of the misconceptions about the Simpson-Bowles retirement age provision.

Read Charles Blahous’ full comment at e21

(photo credit: Brad Herman)

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