Beginning this year, the baby-boom generation — primarily those born between 1945 and 1960, depending on the social scientist you talk to — will reach “peak 65.” This is the beginning of a period that will see the largest numbers of the cohort turn age 65.
But as the population reaches this milestone, a bill currently being debated in Congress about the retirement age for aviators has bled into the larger conversation about the full U.S. retirement age, and whether or not it needs to change, according to a report from CNBC.
“More than 11,200 Americans will turn 65 every day — or over 4.1 million every year — from 2024 through 2027, according to estimates from the Retirement Income Institute at the Alliance for Lifetime Income,” the story stated. “Age 65 has traditionally been thought of as retirement age. The milestone still marks the point at which individuals become eligible for Medicare coverage.”
That will be different going forward for Social Security beneficiaries, as those who were born in 1960 or later will need to reach age 67 to access their full benefits.
The bill being debated in Congress right now revolves around reauthorization for the Federal Aviation Administration (FAA). A version of a reauthorization bill in the House raises the retirement age for FAA workers to 67, while the Senate will soon be progressing its version to the “markup” phase in committee, according to The Hill.
But the shift in full retirement for FAA workers to age 67 in the House version of the bill has reignited longstanding debates about fiscal solvency versus the protection of existing entitlement programs, CNBC noted.
“Social Security faces an imminent deadline by when changes must happen,” the report stated. “The program’s combined trust funds are projected to run out in 2034. The projected depletion date for the retirement fund is sooner in 2033, according to the Social Security Administration. Beneficiaries will face a more than 20% benefit cut if nothing is done by those deadlines.”
It’s possible that the issue could get additional attention on the presidential campaign trail. But the two leading candidates in the race — incumbent President Joe Biden and former President Donald Trump — have each vowed to preserve the current standard retirement age of 65.
Former United Nations Ambassador Nikki Haley is the only active presidential candidate who has endorsed the idea of raising the retirement age, the story explained.
Experts told CNBC that raising the retirement age to 67 would effectively constitute a benefit cut.
“Such a change would encourage workers to retire later, and therefore continue to pay money into the program, or take reduced benefits,” the story said. “While that would positively affect Social Security’s finances, the change would result in a 20% benefit cut across the board to lifetime benefits, the Center on Budget and Policy Priorities has found.”
The benefit reduction would be higher for those opting to take their Social Security proceeds at 62, amounting to a 43% reduction.
However things go, retirement experts say that if changes are on the table, then time is of the essence. One expert with this view is Jason Fichtner, chief economist at the Bipartisan Policy Center and executive director of the Retirement Income Institute.
“We have to do this now,” Fichtner said. “We probably have a four-year window, being optimistic, to really start making plans.”