Raising the Retirement Age for Social Security Hurts These Workers the Most
Life + Money

Raising the Retirement Age for Social Security Hurts These Workers the Most


Social Security’s trust fund reserves are expected to be depleted by 2037, and fixing the program is the one issue many of the presidential candidates from both parties agree on.

But just how we should address Social Security’s impending shortfall is a cause of fierce debate. Several Republican candidates want to raise the retirement age for the program. Jeb Bush wants to boost the full retirement age to as high as 70, while rival Chris Christie is suggesting hiking the threshold to 69.

In some ways, such a change wouldn’t be so different from the system that’s now in place. Social Security’s current full retirement age stands at 66 years old for people born between 1943 to 1954, and they can claim for early benefits as soon as they turn 62 – although they’ll take a haircut of as much as 30 percent on their payments.

While the GOP candidates would push the full retirement age higher, Americans would still be able to claim early benefits. So who would really be hurt by a later retirement age? Plenty of people, it turns out.

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Americans are living longer, which means every worker is likely to have longer retirement, and therefore potentially receive less from Social Security if they can’t receive their full benefits until they turn 69 or 70. In 1940, the typical American man only lived 12.7 years past his 65th birthday. By 1990, men turning 65 could expect another 15.3 years of life.

Yet there are certain groups who would feel the pain of a delayed full retirement age more than others:

Workers with physically demanding jobs: Americans who are employed in tough blue-collar jobs are 55 percent more likely to file for early retirement benefits at 62, according to a 2014 study from the U.S. Government Accountability Office. These jobs can be found in some of the country’s largest industries, such as construction and farming, the report noted.

Given their tough jobs, it's less likely that some of these workers will be able to make it to the higher age limit for full retirement. That means more blue-collar workers will be faced with lower Social Security payments throughout their retirement years. If they can hold out until 69 or 70, some may be suffering health ailments from the impact on their bodies from additional years spent in their physically demanding jobs. 

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The non-college educated: Lacking a college degree is another indicator that an American is more likely to file for early retirement benefits, the GAO found. Given that only one-third of Americans have a bachelor’s degree, this applies to the majority of working adults in the country.

Americans without college degrees not only have shorter life expectancies than their more educated counterparts, they also earn less on average. A higher retirement age would hit this group hard, given that they are more likely to rely on Social Security for the bulk of their retirement income.

Those who don’t think they’ll live to 75: These Americans are making what to them seems like a good financial decision. People who don’t think they’ll live to celebrate their 75th birthdays are more likely to file for early retirement benefits, the GAO found. There’s some evidence that they are making a logical decision, given that this group has a higher death rate than Americans who wait for their full retirement age.

Still, there’s always the financial risk that they’ll live longer than they expect, which means more years on a reduced income. And if the retirement age is raised, that could spell even more financial trouble for people dealing with ill health or chronic ailments.