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Raising Retirement Age One of the Options to Aid Social Security Finances

Republican presidential candidates - minus former president Donald Trump - are introduced before a debate hosted by Fox News. (Source: Joshua Lott/The Washington Post via Getty Images)

When it comes to Social Security, many Republican 2024 contenders think that reducing benefits for younger people is a key area for reform. The question is how to proceed.

Republican presidential candidates, former New Jersey Gov. Chris Christie (L) and former UN Ambassador Nikki Haley speak during a break in the first debate of the GOP primary season hosted by FOX News in Milwaukee. (Source: Win McNamee/Getty Images/ Yahoo! Finance)

Raising Retirement Age for Young Workers

On the campaign trail, a variety of techniques are being proposed to answer that question. Raising the retirement age is one common idea, although some argue that it would be unjust to some workers. Others are considering partial privatization of the program, which has its supporters and detractors. Similarly, options for reducing benefits for wealthy Americans, modifying job criteria, and using economic growth to tackle the problem should be considered. The simmering argument, which is taking place at a much lower temperature than hot-button issues like abortion or former President Trump’s indictments, is certain to gain importance during the next presidential term.

According to recent forecasts, Social Security barely has enough funds to continue paying out 100% of benefits until 2034. If nothing is done, checks might be reduced by more than 20% when the point of insolvency is reached, with experts warning that balancing the books becomes more difficult with each passing year.

Among the specific remedies being proposed on the campaign trail, arguably the most frequently mentioned suggestion among the contenders is raising the retirement age in the future. Former UN Ambassador Nikki Haley stated at a recent town hall, “The first thing you do is change the retirement age of the young people coming up so that we can have some sort of system for them.” Former New Jersey Gov. Chris Christie and former Vice President Mike Pence have expressed similar views, including an openness to hiking the retirement age among other things.

The limitation of raising the retirement age is that while it may help Social Security’s finances in the long run, it will do little to address the short-term deficit. Meanwhile, at least one contender is vehemently opposed to the concept. Former Arkansas Gov. Asa Hutchinson recently told PBS that raising the age would be unjust to many Americans who work in “tough manual labor jobs” and whose bodies may fail long before they reach the age of 70. Another possibility that has been floated is privatizing the program, or at least segmenting off a section of it.

Former Vice President Mike Pence is a strong proponent of this method, having recently proposed allowing younger workers to deposit a portion of their payroll taxes in a personal account. “They’ll have their own savings account, not an IOU from the federal government,” he recently stated. The proposal is similar to one being promoted on Capitol Hill by Sen. Bill Cassidy (R-La.) to establish a $1.5 trillion investment fund to bolster future Social Security benefits.

However, any trend toward privatization is not without its critics. Florida Gov. Ron DeSantis has previously indicated interest in the proposal, but in a recent Fox News interview, he stated that a lack of surpluses makes the notion “totally not on the table.” Former President Trump, for his part, has already totally distanced himself from any such attempts and gives little in the way of a plan for how he would handle the program while indicating openness to concepts around the retirement age and privatization in a 2000 book.

Instead, he is far more likely to use the issue as a political weapon against his political opponents, particularly DeSantis. The Florida governor did vote for proposals to change Social Security while in Congress last decade, and “that’s a bad one,” Trump has said. On the Democratic side, President Biden has emphasized raising taxes to fund the shortfall and has consistently chastised any Republican who talks about reform that includes benefit reduction.

READ ALSO: Hanson City Commissioners Approve Maintaining Property Tax Rates for Current Year

Discussion on Sustaining Social Security Benefits

In his State of the Union speech, he used a memorable moment to trap Republicans into promising to take entitlement programs off the table and “stand up for seniors.” Democrats have also criticized Haley and others for their comments on entitlement reforms. Another Republican proposal is to introduce means testing to the program, which would reduce payouts for wealthy people who already have enough private retirement plans. This is a concept that has been proposed by both Haley and Christie. “Warren Buffett does not need Social Security. He doesn’t. Mark Zuckerberg, Elon Musk, and, Jamie Dimon, don’t need it. So maybe we can start there,” Christie said during a recent appearance.

Another method advocated by Hutchinson would be to relax work restrictions related to Social Security. Older Americans can now work while receiving Social Security benefits, but there are some wage limits for those under the age of 67 that can lower payments for a few years. Reduced limits, according to Hutchinson, might “add a million people back into our workforce” and help improve profits.

Meanwhile, many of the top candidates continue to lack detail. From his 2000 book to the present, runaway frontrunner former President Trump has had several opinions on the matter. The closest approach to a strategy came this year when he claimed in a video that “under no circumstances should Republicans vote to cut a single penny” from the program.

Sen. Cassidy, for his part, has chastised both Trump and Biden for their lack of strategy, telling Yahoo Finance in a recent interview that “once the political season is over, I’m hoping that sanity returns.” Vivek Ramaswamy, who has been soaring in the polls and garnering attention for his recent debate performance, holds possibly the oddest position. The entrepreneur has stated that he intends to shift his concentration elsewhere. He recently stated on Gray Television, “Social Security reform, Medicare reform, that’s got to be somebody else’s job down the line.”

“I don’t think it’s the job of every US president to try to do everything,” he continued. Many critics believe that some leaders’ continued ambiguity is unsustainable, citing the costs of inaction. According to Goldwein, promising not to touch Social Security “is a great political tagline, but the reality is that it’s an endorsement of a huge across-the-board cut.”

READ ALSO: $4,555 Social Security Payout for Seniors: How to be Eligible?

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