With the new administration taking office, many Republicans are seizing the opportunity to express their views on Social Security and its funding shortfall.
One example is Missouri Republican Congressman Mark Alford, who appeared on Fox News and promoted the idea of raising the retirement age to help reduce federal government costs.
He described a recent meeting with Elon Musk and Vivek Ramaswamy, who will lead the unofficial Department of Government Efficiency [DOGE] under Donald Trump beginning in January, and the ideas discussed.
Alford stated on Fox. “I think there’s a way, when people are living longer, they’re retiring later, then on the front end, we can move that retirement age back a little bit” According to him, the “$36 trillion” national debt and its interest payments are “unsustainable,” and government spending must be reduced to “right the ship”.
And, of course, those cuts must come from social programs, which have no value to Republicans. “It’s going to mean cuts to the 24 percent of the discretionary spending that we have, and it’s also going to mean looking long-term at the front end of some programs like Social Security and Medicare.”
Would raising the retirement age be a positive for Social Security?
The current full retirement age for those born in 1960 or later is 67, up from 65, but even if it rises further, it is unlikely to be popular and may reduce overall lifetime benefits for recipients. Furthermore, it would not alleviate the current funding crisis.
According to Stephen Kates, principal financial analyst for RetireGuide.com, raising the age at which people can claim benefits “is a backward way of simplifying and reducing benefits.”
According to him, “The earliest age someone can claim benefits is 62, and this usually results in a [roughly] 30% decrease in monthly benefits when compared to their expected benefits at full retirement age, which is 67 for people born after 1959.”
Increasing either the earliest or full retirement age would result in benefits starting later and being smaller than they are now for future retirees.
Lisa Whitley, a financial coach and planner at Money By Lisa, agreed with the assessment and went on to say, “I do not believe that there is a constituency among the public for raising the retirement age.
The reality is that most people already receive a ‘discounted’ benefit by claiming before reaching full retirement age. Raising the FRA will exacerbate the wealth disparity between low- and high-income households.
Even for those who are content to wait until FRA, the dream of a longer life expectancy is not synonymous with working longer.”
Other alternatives, such as raising or even eliminating the salary cap subject to FICA taxes, would be better for the program than federal budget cuts, but because this would tax the wealthy, no Republican administration would support the bill.
Regardless, the new full retirement age is unclear, but Rachel Greszler, senior research fellow at the Roe Institute, suggested 70 in an article for the Heritage Foundation.
According to her article, it would help address the funding cliff and would be consistent with the Republican Study Committee’s March 2024 budget, which proposed the same thing.
The measure has a lot of Republican support, with Georgia Representative Richard McCormick also suggesting cuts. “We are going to have to make some difficult decisions.
We need to bring in the Democrats to talk about Social Security, Medicaid and Medicare. There are hundreds of billions of dollars to be saved, and we know how to do it; we just need the stomach to face those challenges.”
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