Tuesday, July 01, 2008

Should public policy try to keep people working until SSA full retirement age? Corporate America won't

Last night (June 30), ABC “World News Tonight” reviewed the subject of early retirement. Reporter Betsy Stark presented a woman of 72 still working 8 to 5 as an administrative assistant in Florida, often without a lunch break, unable to retire comfortably.

The show presented some numbers of the increase in social security benefit that accrues if someone waits until full retirement age (for me, 66) instead of a “protective” early retirement at 62. Typically the benefit increases by about one-third. It is supposed to be an actuarial calculation based on life expectancy, but with life spans increasing, many retirees will be better off if they can wait. There is a tendency to suggest that public policy ought to encourage people’s working until the SSA “full retirement age.” But corporate America (especially in today's economy) still encourages early retirement with buyouts, and with social security offsets subtracted from defined benefit pensions (for those who still have them), predicated on the idea that social security payments will start at 62.

The story is called “Financial Hardship Postpones Retirement: Baby Boomers Still Trapped in Daily Grind.” The link is here.

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