Want to Retire by 65? Think Again!
Americans may have shot themselves in the foot when it comes to retiring in a timely fashion. A recent study conducted by the Center for Retirement Research at Boston College recently reported that American workers (ages 32-64) are a stunning $6.6 trillion short of budget.
The report, which details the intricacies of the Social Security Trust Fund, states that at the current rate the trust will have exhausted its surplus funds by 2037. Since Social Security is funded by tax revenues, it will continue to generate funds, but it will only able to finance approximately 75 percent of retiree claims. This is due in part to a portion of the Social Security monies being loaned to the government for deficit spending in recent years. But this study's findings brings up a far more important question: How will this affect the soon-to-be retired?
Logic points to increased taxes to make up the gap, but in all likelihood it will be a combination of a tax increase and a raised retirement age. Others point out that benefits might be curtailed to deny Social Security to high-income earners who theoretically may not need these funds in order to survive.
The U.S. government has already toyed with the idea of raising the retirement age (according to US News, it will likely be pushed to 69 or 70), and actuarial professionals have stated that there are a myriad reasons that support raising the retirement age -- the most common being that Americans have a longer lifespan than they did 50 years ago. Tom Terry, chairman of the American Academy of Actuaries Public Interest Committee and a consulting actuary, said, "Given these three factors -- increased life spans, increased working capabilities, and a structural demand for experienced labor -- the demographic case for an increase in the Social Security retirement age is compelling. We need to recognize that not just life span, but the nature of work and of American life have all changed since the retirement age was last amended in 1983."
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