In the midst of the Great Depression, the passage of the Social Security Act established the national retirement age of 65 as the standard, ensuring that older workers could retire and receive crucial benefits for the first time in U.S. history.
Average life expectancy in 1935, however, was only 58 years for men and 62 for women. Only a little more than half of the nation’s men are expected to reach age 65, according to a document from the Social Security Administration archives.
The age of 65 was chosen not because it was the optimal time to stop working, but because, as labor economist Teresa Ghilarducci says, it was “economical.”
“There was a lot of opposition to a national pension plan. Setting the age at 65, when life expectancy was much lower than today, was a political decision to get Social Security legislation passed,” she says.
Push to raise the Social Security retirement age
Average life expectancy has grown significantly in the years since the foundational social reform was created, and so has the program. More than 50 million retirees and their dependents will receive benefits starting in 2023, and they will tend to receive them for a much longer period than Social Security’s founders intended, often for decades.
Due in large part to this growing population of seniors, the trust fund that pays for Social Security was headed for insolvency in 1983. That’s when Congress voted to progressively raise the full retirement age to 67 out of 33 for workers born after 1959.
Now, with a record number of Americans expected to turn 65 in the next few years, Social Security is approaching another funding crisis. If lawmakers don’t pass new reforms over the next decade, economists estimate there will be a universal 23% cut in Social Security benefits.
One option is to raise the retirement age again, a position supported mainly by the political right. On the campaign trail, former Republican presidential candidate Nikki Haley advocated changing the retirement age for people currently in their 20s to “match life expectancy.” And in a March budget proposal, a group of House Republicans argued that “modest adjustments” to the retirement age are needed to account for Americans’ increased longevity.
The private sector has also recently stepped in. In an annual letter to shareholders, Blackrock CEO Larry Fink said that “no one should work longer than they would like,” but at the same time called the idea of a sixty-year retirement “a little crazy.”
By this logic, raising the retirement age may seem like a no-brainer. If people live longer and healthier lives, shouldn’t it make sense for them to work longer too? Economists and aging experts largely say no, warning that the move would not only amount to a reduction in benefits at every age but would potentially harm the health of most older Americans.
Live longer, work longer
Lately, research and subsequent news articles trumpeting the supposed benefits of delaying retirement seem to be popping up everywhere.
In a December study, the Pew Research Center found that the number of American workers over the age of 65 nearly doubled from 1987 to 2023 — and that they reported higher levels of job satisfaction than younger workers. The title of a recent one Fortune an article citing Pew data proclaims: “The new pension is not a pension: baby boomers keep their jobs well into their sixties and seventies because they ‘like going to work’.”
(You can find similar reporting from Money, like this September article based on a T. Rowe Price study that found 20% of retirees are “unretired” or have returned to work full-time or part-time. Nearly half of these retirees said they returned to work for “the social and emotional benefits.”)
“A lot of research shows that people who work at an older age are healthier than those who retire at an older age,” says Ghilarducci. “And in surveys of people who chose to continue working, they usually chose it because they fit their job well.”
Retirement-age adults who benefit from work tend to be in more privileged positions and have higher-paying “knowledge-based” occupations. This group of workers tends to have more control over the pace and requirements of their work, but is far from the majority.
A closer look reveals another, less flattering, story about working into old age. While there are certainly older adults who Want at work, most of those who work beyond the traditional retirement age Have out of financial necessity, and the latter do not necessarily benefit from it.
Ghilarducci says his research shows that for most people, especially those in physically demanding and low-paying positions, working in their golden years typically causes them physical, mental and emotional harm.
“This distorted idea that working longer creates [older adults] healthier is not relevant or true for 90% of the population,” adds Ghilarducci. For “almost everyone – the secretary, the healthcare worker, the retail worker – research is finding that retirement with sufficient income is better for their health.”
There are also racial, ethnic and gender implications when it comes to retirement age. Christina Matz, director of the Center on Aging and Work at Boston College, says some groups (such as Hispanics, blacks and working women) have reduced working life expectancy because of their disproportionate representation in “low-quality” work. .
The reality of raising the retirement age
Delaying retirement is not possible for many older people, even if they have the financial need to continue working. A recent survey by insurance company MassMutual found that nearly half of retirees left the workforce earlier than expected, with a third of that group reporting they were forced to do so because of changes at work.
A quarter said they had had to leave work early due to illness or injury. Matz says caregiving responsibilities, such as in the case of a spouse developing dementia, are another major contributor to early retirement.
These early retirees often have no choice but to claim benefits before full retirement age, resulting in reduced payments for “the people who need the benefits the most,” according to Ghilarducci. Based on his findings, raising the age for Social Security benefits further exacerbates socioeconomic inequities in retirement, accelerating death and adverse health outcomes for people who are less financially well off.
Matz agrees.
“The literature is becoming really, really clear: working longer is not an option for a good portion of the workforce,” he says.
What is the best age to retire?
What would be the ideal retirement age if the political priority were well-being rather than political and monetary interests? Matz argues that retirement policy should not be based on chronological age at all, but on a variety of factors that take into account the diversity of workers’ experiences and abilities.
“It’s really difficult to come up with a general policy with these types of questions,” he says.
Ghilarducci proposes a “Grey New Deal” to overhaul the pension system, which he outlines in his latest book, Work, retirement, repetition: The uncertainty of retirement in the new economy. Ideally, each profession should have its own retirement age depending on physical and mental needs.
Additionally, all workers would be guaranteed a lifetime retirement income through a universal pension system – just as police officers and many other unionized workers enjoy today – and enhanced Social Security benefits.
If older people wanted to continue working, regardless of the reason, Ghilarducci adds that health-focused policies would help them stay productive – and no one would feel forced to work into old age. Every adult would have access to jobs for which he is suited and to vocational training through public programs. In particular, workers would be protected by age-related anti-discrimination laws and would have more say in when and how they retire.
“One sign of a good society is that the definition of a working-age adult changes,” he says.
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Pension is broken: Is a ‘pension renaissance’ coming to save us?
Early retirement savers are running out. ‘Coast FIRE’ could be the answer
A new bill aims to fix Social Security by eliminating taxes on benefits