Report considers “elastic” early retirement age for SS eligibility

Center for Retirement Research,
An “Elastic” Earliest Eligibility Age for Social Security 
by Natalia Zhivan, Steven A. Sass, Margarita Sapozhnikov, and Kelly Haverstick
IB#8-2

Abstract:

n the early 1980s, Congress responded to the Social Securityprogram’s long-term financing shortfall, in part, by raising the FullRetirement Age (FRA) from 65 to 67.  When fully phased in, for thosewho turn 62 in 2022, workers will have to wait an additional two yearsto get the same monthly benefit.  If they do not postpone claiming, theincrease in the FRA will cut their benefits by about 13 percent. 

Congress did not change the earliest age at which workers can claim. This Earliest Eligibility Age (EEA) remains 62.  When the increase inthe FRA is fully phased in, workers who claim at 62 will get 70percent, rather than 80 percent, of their FRA benefit.  This has raisedconcerns that benefits claimed at the EEA will be too low, especiallyas retirees age and other sources of income decline.  One responsewould be to raise the EEA from 62 to 64, in line with the two-year risein the FRA.

There are, however, two important objections to an increase in theEEA.  The primary concern is that it would create hardship for thoseunable to work or find employment and who lack the resources to supportthemselves without working until age 64.  A second objection is thatraising the EEA is unfair to disadvantaged groups with low lifeexpectancy.  This brief addresses these concerns by considering an “Elastic” EEA, which gives different workers different earliest eligibility ages.

For full paper in PDF