As life expectancy continues to increase and more Americans are relying on their own life savings to finance their retirement, lawmakers have proposed raising the retirement age as a way to bolster Social Security and encourage people to delay retirement. U.S. Senators Bill Cassidy, M.D. (R-LA), Tim Kaine (D-VA), Susan Collins (R-ME), and Chris Coons (D-DE) introduced legislation to help Americans plan for retirement by providing them with essential information to make more informed decisions about when to claim their Social Security benefits.
The bill seeks to change the terminology used by the Social Security Administration to better reflect Social Security’s claiming design and how the program works. For example, “early eligibility age” would be changed to “minimum benefit age”, “full retirement age” would be changed to “standard benefit age” and “delayed retirement credits” would be replaced with “maximum benefit age”. The legislation would also require Social Security statements to be mailed to those ages 25 and older every five years, those ages 55 and older every two years, and those 60 and older yearly.
Clint McCalla, senior wealth manager at LourdMurray in San Diego, suggests that raising the retirement age could align with the new reality of longer life expectancies and encourage people to save more. Chris Kampitsis, a financial planner at The SKG Team at Barnum Financial Group in Elmsford, New York, echoed this sentiment, noting that people are needing to work longer to hit their retirement wealth objectives and still, retirements are lasting longer than ever before.
While 62 is still the most frequent claiming age for Social Security, a study from United Income found that collectively, retirees stand to lose up to $3.4 trillion—or $111,000 per household—by claiming Social Security early. The proposed legislation seeks to close this gap and provide Americans with the information they need to make more advantageous claiming decisions.
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