The Retirement Age

On the wall in my house is a framed picture: “The Life and Age of Woman.” It depicts an arc of the seven “stages of woman’s life from infancy to the brink of death.” Retirement isn’t one of the stages, but “At seventy-five the flush of health and beauty is gone” and all that remains are “trembling limbs” and a reminder of what once was. (Though, 75 wasn’t the “brink of death” and the arc of life continued to age 90). It’s a 19th century artifact; “retirement” isn’t mentioned and the decline of the arc begins at 50. For the 21st century we need a picture do-over since we now have “retirement age” as a new stage of life. I think of it as a stage of life like the terrible twos or adolescence, but one not to be confused with “old age,” or with age 75 of the 19th century stages. The first (and perhaps most important) unique characteristic of the retirement age is not tied to beauty (and only for some of us, to health). Instead, the retirement age is marked by the year we choose to retire. We can elect to become an “early” or “late” retiree. And it seems that the different starting points signify vastly different meanings of retirement for a retired person and also for policy makers now concerned with the solvency of Social Security and debating what benefits to pay at what age.

Unlike the biologically determined puberty that ushered boomers into adolescence, health and government policies that prohibit compulsory retirement permit us to decide when or even if retirement puberty begins. Having the choice is the conundrum that prompted this blog. But, I am one of the fortunate ones, a fact that was brought home recently by a column in the Washington Post by Ezra Klein. I am fortunate because I like my work and my work place. Turning my office over to a younger colleague when I retire is a step I will do with some regret. Not so for many in the workforce who have labored for far smaller take-home checks in jobs that have far fewer rewards. These workers want to/choose to retire as soon as possible, as soon as the Social Security system they’ve paid into for years will pay out benefits, usually at age 62. And they do so even though benefits would be greater if they waited for 66, 67, or longer, and even though they will be dependent largely on that monthly check from the SSA. Klein points out many workers see retirement as the reward for years of unrewarding labor; for them the retirement age holds out the promise of new freedom and more choices (much like age 21 promises legal access to alcohol!?) But many of these early retirees can also look forward to a shorter life expectancy than the fortunate ones (and that includes retiring professors). I don’t want to retire at 65, but should I expect everyone to share my qualms about retirement?

For Klein, this portrait of the earliest retirees has led him to discount one popular panacea for the Social Security solvency — raising the minimum age of retirement to 70 as an alternative to cutting benefits. Asking people to retire later didn’t seem like such a bad idea, at least it didn’t until I read Klein’s column. Klein’s standpoint argument (well, actually not his; Klein’s quoting the work of Peter Diamond, winner of a Nobel prize in economics) forces me to rethink that stance. As Diamond sees it, the people most often calling for an age increase are those who will be least affected by that solution. They don’t want to retire early (they like what they do); they can expect to live longer than the average worker (for a whole range of socioeconomic reasons); and they won’t be largely beholden to Social Security checks for support (because they are privileged with pensions and 403b’s).

For this privileged group, raising the retirement age would not translate as a cut in anything because for them, “retirement” is not a reward and the benefits of Social Security are represented only in monetary terms. Klein wants budget balancers to think outside the “cut benefits or raise the age” box. He suggests lifting the cap on income taxed for Social Security – tax all income (not just the first $110,000 as is currently done) and close the solvency gap for the next 75 years. Now that would be a cut in someone’s benefits, and I expect it will also bring up rhetoric about undeserved “entitlements” but it’s an option I hope will be on the table in the upcoming debates.

Read Klein’s comments at “WonkBlog: Why Rich Guys Want to Raise the Retirement Age,” Washington Post (Nov. 21, 2012). http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/21/why-rich-guys-want-to-raise-the-retirement-age/

See the “Life and Ages of Woman” at http://www.ameriancebturies.mass.edu/collection/itempage.jsp?itemid=5250

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