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 2020 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 |
|||
Current law shortfall in long-range actuarial balance is 3.21 percent of payroll and in annual balance for the 75th year is 4.51 percent of payroll. | ||||||
C1.1 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase the NRA 1 month every 2 years until the NRA reaches 68.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.41 | 0.69 | 13% | 15% | |
C1.2 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase the NRA 2 months per year until the NRA reaches 68.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.50 | 0.69 | 16% | 15% | |
C1.3 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
index the 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) | memo (Ryan 2008) | memo (Social Security Advisory Board) |
0.62 | 1.67 | 19% | 37% | |
C1.4 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase the NRA 2 months per year until it reaches 69 for individuals attaining
age 62 in 2034. Thereafter, increase the NRA 1 month every 2 years.
graph | table | pdf-graph | pdf-table | memo (Ribble) | memo (Chaffetz) |
1.23 | 2.39 | 38% | 53% | |
C1.5 |
Starting in 2021, allow workers to choose whether to have their payroll
tax rate reduced by 2 percentage points. For each calendar year that a
worker chooses to have their payroll tax reduced, their normal retirement
age (NRA) increases 1 month. We assume 2/3 of workers each year will choose
this payroll reduction. The General Fund of the Treasury reimburses the
OASI and DI Trust Funds for the reduction in payroll tax revenue.
graph | table | pdf-graph | pdf-table | memo (Landry) |
0.68 | 1.25 | 21% | 28% | |
C1.6 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase the NRA by 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) |
0.59 | 1.31 | 18% | 29% | |
C1.7 |
After the normal retirement age (NRA) reaches 67 for those attaining age 62
in 2022, increase the NRA by 3 months per year starting for attaining age 62
in 2023 until it reaches 69 for those attaining age 62 in 2030. 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) |
0.95 | 1.33 | 30% | 29% | |
C2.1 |
Increase the earliest eligibility age (EEA) by two months per year for
those age 62 starting in 2022 and ending in 2039 (EEA reaches 65 for
those age 62 in 2039).
graph | table | pdf-graph | pdf-table | memo (AARP) |
-0.09 | -0.43 | -3% | -9% | |
C2.2 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
index the 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 2021.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) | memo (Warshawsky) |
0.58 | 1.48 | 18% | 33% | |
C2.3 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
index the 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 2022
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) |
0.46 | 1.17 | 14% | 26% | |
C2.4 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase both the NRA and the earliest eligibility age (EEA) by 36/47 of a
month per year until the NRA and EEA reach 70 and 65 respectively. For each
year, the computed NRA and EEA round down to the next lower full month.
graph | table | pdf-graph | pdf-table | memo (Lummis) |
0.84 | 1.84 | 26% | 41% | |
C2.5 |
Increase the normal retirement age (NRA) 3 months per year starting for
those age 62 in 2021 until the NRA reaches 70 in 2034. Thereafter, index
the 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) from 62 to 64 at the same time the NRA increases from 67 to 69;
that is, for those attaining age 62 in 2022 through 2029. Keep EEA at 64
thereafter.
graph | table | pdf-graph | pdf-table | memo (Graham, Paul, Lee) |
1.51 | 2.91 | 47% | 64% | |
C2.6 |
Increase the normal retirement age (NRA) and the earliest eligibility age
(EEA) for those age 62 in 2021-2022 to 68 and 63, respectively, and then
by 3 months per year in 2023-2026 to 69 and 64, respectively.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.90 | 1.11 | 28% | 25% | |
C2.7 |
Increase the normal retirement age (NRA) and the earliest eligibility age
(EEA) for those age 62 starting in 2021 by 3 months per year until EEA reaches
64 in 2028 and NRA reaches 69 in 2030.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.83 | 1.11 | 26% | 25% | |
C2.8 |
Starting in 2023, 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 2023) phased
in over 40 years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.43 | 0.76 | 13% | 17% |