Summary of Provisions That Would Change the Social Security Program
Description of Proposed Provisions:
Provisions Affecting Retirement Age
Estimates based on the intermediate assumptions of
the 2026 Trustees Report
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|
Change from current law [percent of payroll] |
Shortfall eliminated | |||||
|---|---|---|---|---|---|---|
|
Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
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| Current law shortfall in long-range actuarial balance is 4.42 percent of payroll and in annual balance for the 75th year is 6.57 percent of payroll. | ||||||
| C1.1 |
Starting with those age 62 in 2027, increase the normal retirement age (NRA) 1 month every 2 years until the NRA reaches 68.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
0.47 | 0.79 | 11% | 12% | |
| C1.2 |
Increase the normal retirement age (NRA) 2 months per year for those age 62 starting in 2027 and ending in 2032 (NRA reaches 68 for those age 62 in 2032).
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick 2005) |
0.57 | 0.79 | 13% | 12% | |
| C1.3 |
Starting for those age 62 in 2027, index the normal retirement age (NRA) to maintain a constant ratio of expected retirement years (life expectancy at NRA) to potential work years (NRA minus 20). We assume the NRA will increase 1 month every 2 years.
graph | table | pdf-graph | pdf-table | memo (Ryan 2010) | memo (AARP 2008) | memo (Ryan 2008) | memo (Social Security Advisory Board 2005) |
0.72 | 1.92 | 16% | 29% | |
| C1.4 |
Increase the normal retirement age (NRA) 2 months per year for those age 62 starting in 2027 and ending in 2038 (NRA reaches 69 for those age 62 in 2038). Thereafter, increase the NRA 1 month every 2 years.
graph | table | pdf-graph | pdf-table | memo (Ribble 2016) | memo (Chaffetz 2011) |
1.42 | 2.76 | 32% | 42% | |
| C1.6 |
Starting with those age 62 in 2027, increase the normal retirement age (NRA) 1 month every 2 years until the NRA reaches 69. Also increase the age up to which the delayed retirement credit may be earned at the same rate (from 70 to 72). No change to earliest eligibility age.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.68 | 1.49 | 15% | 23% | |
| C1.7 |
Increase the normal retirement age (NRA) 3 months per year for those age 62 starting in 2027 and ending in 2034 (NRA reaches 69 for those age 62 in 2034). Increase the age up to which delayed retirement credits may be earned from 70 to 72 on the same schedule. Increase the widow(er) NRA in the same manner. The earliest eligibility age (EEA) for worker's and widow(er)'s benefit is unchanged.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
1.08 | 1.50 | 25% | 23% | |
| C2.1 |
Increase the earliest eligibility age (EEA) by 2 months per year for those age 62 starting in 2028 and ending in 2045 (EEA reaches 65 for those age 62 in 2045).
graph | table | pdf-graph | pdf-table | memo (AARP 2008) |
-0.09 | -0.49 | -2% | -8% | |
| C2.2 |
Starting for those age 62 in 2027, index the normal retirement age (NRA) to maintain a constant ratio of expected retirement years (life expectancy at NRA) to potential work years (NRA minus 20). We assume the NRA will increase 1 month every 2 years. Also, raise the earliest eligibility age (EEA) for retired-workers, aged widow(er)s, and disabled widow(er)s by the same amount as the NRA starting for those attaining 62 in 2027.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA 2010) | memo (Warshawsky 2008) |
0.68 | 1.67 | 15% | 25% | |
| C2.3 |
Starting for those age 62 in 2027, index the normal retirement age (NRA) to maintain a constant ratio of expected retirement years (life expectancy at NRA) to potential work years (NRA minus 20). We assume the NRA will increase 1 month every 2 years. Also, increase the earliest eligibility age (EEA) by the same amount as the NRA starting for those age 62 in 2027 so as to maintain a 5 year difference between the two ages. Include a "hardship exemption" with no EEA/NRA change for a worker with 25 years of earnings (with 4 quarters of coverage each), and average indexed monthly earnings (AIME) less than 250 percent of the poverty level (wage-indexed from 2013). The hardship exemption is phased out for those with AIME above 400 percent of the poverty level.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission 2010) |
0.51 | 1.28 | 12% | 19% | |
| C2.8 |
Starting in 2029, convert all disabled-worker beneficiaries to retired-worker status upon attainment of their earliest eligibility age (EEA) rather than their normal retirement age (NRA). After conversion, apply the early retirement reduction for retirement at EEA (currently 30 percent for those age 62 in 2029) phased in over 40 years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky 2008) |
0.39 | 0.73 | 9% | 11% | |