Friday, August 6, 2010

Don't be Fooled! Raising the Retirement Age is a Benefit Cut!

Yesterday, I attended a Hill briefing, hosted by the National Council of Women’s Organizations' (NCWO)  Older Women Economic Security Taskforce (OWES) on why raising the Social Security retirement age (again) is a bad idea. Proponents of this bad idea think it will encourage older workers to work longer and further the solvency of Social Security. The reality, however, is that raising the retirement age is a benefit cut for current and future retirees and negatively affects their ability to be economically secure. Furthermore, many older workers are not collecting benefits early because they want or choose to. In this economy older workers are being laid off and are unable to find jobs, and end up collecting benefits before full retirement age because they have to.

Here’s how raising the retirement age is a benefit cut as explained in the Raising the Social Security Age is Dangerous white paper, co-authored by Wider Opportunities for Women (WOW).

“If your benefit at age 66 is $1,000 a month but Congress raises the retirement age to 67, then you would have to wait one year to collect $1,000 a month. This means you would lose a year of collecting full benefits and lose again because instead of receiving $1,080 a month at age 67 your benefit would be just $1,000.”
The increased monthly payment of $1,080 is a result of the annual Social Security cost-of-living adjustment (COLA).

WOW’s Elder Economic Security Standard Index (Elder Index) further shows that current average annual Social Security benefits are not enough to make ends meet. An elder renter needs $20,326 a year while the average Social Security benefit is just $12,526 for women and $16,572 for men. As costs for basic needs continue to rise, benefit cuts would hurt an elder’s ability to age in place with dignity.

Social Security should be strengthened, not cut. Instead of looking for ways to cut benefits, Congress should look for ways to shore up more funds for this critical program that so many depend on.

In celebration of Social Security's 75th birthday, Wider Opportunities for Women (WOW) is blogging throughout the month about the importance of this program to an elder's ability to age in place. This is the first blog of the month-long series.

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