As the government seeks to reign in federal spending, Social Security is often a focal point of the discussion. It is among the most costly federal programs and many have noted that trimming the costs of this program could go a long way toward addressing the overall federal deficit. However, the best means of reducing the costs of the program are hotly contested.
Some have suggested that the best way to reduce costs would be to raise the age of eligibility for retirement benefits. Currently, Social Security retirement benefits are available to those who are 62 or older and meet the income requirements.
Under a draft proposal released by the Obama administration, the retirement age may be increased in accordance with longevity expectations. The plan suggests that the retirement age would be raised to 67 by 2050 and 69 by 2075. Clearly, by raising the age at which individuals become eligible for retirement benefits, the number of people eligible would go down.
Raising Social Security Retirement Age May Increase SSDI Applications
However, it is important to remember that actions can have unintended consequences. Increasing the retirement age may not result in the cost savings anticipated. In fact, some experts suggest it may simply result in more people applying for Social Security Disability Insurance (SSDI) benefits. Eligibility for SSDI benefits is based upon work history rather than age. According to the General Accountability Office, the increase in disability costs may exceed the savings gained from delaying retirement for future generations.
Given the current deficit and the challenging economic times, it is understandable that the federal government is seeking to reduce costs. However, decisions must be made carefully and should not be made at the expense of senior citizens. For more information regarding Social Security benefits, speak with a knowledgeable attorney.