Mar 22, 2024
Americans can start receiving their Social Security retirement benefit as early as age 62. But should they?
According to lawyer and political commentator Ben Shapiro on an episode of “The Ben Shapiro Show,” it’s “insane” that the U.S. hasn’t raised the official retirement age.
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“[President] Joe Biden has technically been eligible for Social Security and Medicare for 16 years, and he wants to continue in office until he is 86, which is 19 years past when you would be eligible for retirement,” Shapiro says.
Rather than raise the retirement age, however, Biden’s 2025 budget calls for raising taxes on high-earners to pay for Social Security and Medicare (and prevent a shortfall). But Shapiro says there aren’t enough high-income taxpayers for that.
“Frankly, I think retirement itself is a stupid idea unless you have some sort of health problem,” he says, adding that, once you lose your purpose in life, “things go to hell in a handbasket real quick.”
But aside from that, Shapiro argues that raising the retirement age makes sense on a fiscal level. Is he right?
Should the retirement age be raised?
According to Shapiro, there’s a straightforward reason the retirement age should be raised: average life expectancy has increased in the last few decades.
Back in 1935, President Franklin Roosevelt established 65 as the “official” retirement age under the newly established Social Security Act. At the time, the average life expectancy in the U.S. was 60.7 years — so, the average American would have been lucky to even reach retirement.
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Today, the average life expectancy is closer to 80 — with 76.4 years being the national average.
While you can start receiving your Social Security retirement benefit as of 62, you won’t receive your full benefit until you reach your “full retirement age,” as defined by the Social Security Administration (SSA). You can start receiving Medicare at age 65.
However, the idea that you can work for 45 years and then receive Social Security benefits sufficient enough to support yourself for another 20-plus years is “not fiscally sustainable,” Shapiro believes.
Not only that, but it’s probably not going to be enough to live on — at least not comfortably. The average monthly Social Security check is $1,907, according to the SSA. Over the course of a year, that isn’t much higher than the federal poverty level, which currently sits at $15,060 for individuals.
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Savvy ways to stretch your retirement savings
If you want to live out your golden years in relative comfort, you won’t want to rely solely on Social Security benefits. Rather, take charge of building your nest egg — the earlier you start, the better, since you can benefit from compound interest.
For example, max out any tax-advantaged accounts, like 401(k)s and IRAs, and take advantage of employer matching.
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If you’re self-employed, you still have options, such as the solo 401(k) and SEP IRA. And if you’re 50+, you can take advantage of catch-up contributions of up to $7,500 for 401(k), 403(b) and most 457 plans.
You can also stretch your retirement income by choosing to retire at age 70. You’ll receive 100% of your benefits at your full retirement age, which is 67 for anyone born after 1960.
However, for each year that you postpone the collection of your benefit, up until you turn 70, you’ll receive delayed-retirement credits. That adds up to a permanent bump in your payout by 8% per year, for each year you wait, until age 70. (If you were born before 1943, that credit decreases, depending on your year of birth.)
Whether you retire and live on less — say, selling your three-bedroom home and moving into a condo, or relocating to a less expensive state — you could also keep working if you’re willing and able. That means you’d still be receiving a paycheck to cover expenses while continuing to contribute to your retirement accounts.
It doesn’t mean you have to stay in the same job indefinitely. Perhaps you can pursue a second career in something you’re passionate about. You could also consider part-time work, so you don’t have to put in full-time hours — and you won’t have to dip into your nest egg, either.
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Vawn Himmelsbach is a veteran journalist who has been covering tech, business, finance and travel for the past three decades. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, Metro News, Canadian Geographic, Zoomer, CAA Magazine, Travelweek, Explore Magazine, Flare and Consumer Reports, to name a few.
