Promoting Work: Implications of Raising Social Security’s Early Retirement Age
Preparing for retirement is becoming more challenging for today’s workers as traditional sources of income, such as Social Security and employer-sponsored pensions, are declining while life expectancy and health care costs are rising. One powerful antidote to income shortfalls in retirement is working longer. But many analysts believe that the availability of early Social Security benefits at age 62 induces many workers to leave the labor force at or near that time. In fact, over 50 percent of both men and women do claim Social Security at 62 and the average retirement age is 63 for men and 62 for women. Therefore, raising Social Security’s Early Eligibility Age (EEA) could encourage many to work longer.
This brief addresses the question of whether today’s workers would be able to work longer without undue hardship if the EEA were raised. Answering this question requires exploring trends in both the health of older workers and the nature of jobs. In examining these areas, the brief focuses in particular on economically vulnerable groups — women and minorities.