‘They should plan on their retirement age being increased': Nikki Haley said at the recent GOP debate that she wants to raise the retirement age above 67 — should you be worried?

Why does Haley want to raise the retirement age?

Haley assured current and soon-to-be-retirees that they will receive their full Social Security entitlement at the current retirement age of 67. But she remained vague during the debate about the exact age she would increase it to.

“We want to make sure that everybody who was promised, gets it,” she said. “But we also want to make sure our kids have something when they get it too.”

Haley’s statements come in light of the fact that Social Security may not be able to hand out full entitlements in the near future. According to this year’s Social Security and Medicare Trustees Reports, the fund supporting Social Security will, at current funding levels, only be able to pay 100% of “scheduled benefits until 2033.” After that, the funds will become “depleted” and older Americans would only receive 77% of their total scheduled benefits.

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DeSantis’ take

One big reason why DeSantis doesn’t agree with Haley about raising the retirement age is life expectancy. Haley insists that life expectancy is increasing, so raising the retirement age just makes sense. But DeSantis says that this isn’t true: life expectancy has decreased in the past five years.

“I will never raise the retirement age in the face of declining life expectancy,” DeSantis said in the debate. “That hurts blue collar folks. You get taxed your entire life, life expectancy’s down, you may not even be recouping very many benefits.”

Both are right — to an extent. Longer life spans tend to belong to rich Americans, such as Haley and DeSantis. Poorer Americans don’t tend to see the same life expectancy increases as wealthier Americans, according to a 2021 paper from the Congressional Research Service.

But something needs to be done

Haley isn’t wrong to raise the alarm bells over Social Security’s impending insolvency. And even current benefits often aren’t enough for many seniors to live on.

But some commentators have other ideas for improving Social Security’s fiscal position. Nobel Memorial Prize-winning economist Paul Krugman wrote in a recent New York Times column that the best way to increase Social Security funds is to do what the majority of GOP candidates refuse to do: raise taxes.

The U.S. has one of the lowest tax revenue rates in the world, according to the OECD. Higher taxes are the way that countries like Canada or Denmark provide more health care and financial support for retirees. You may not like higher taxes, but it could help out with your retirement savings long-term.

In the meantime, the best thing you can do is make sure that you have enough money in the bank to fund your own retirement.