Can the Actuarial Reduction for Social Security Early Retirement Still Be Right
The option to claim Social Security benefits earlier than the program’s Full Retirement Age, in exchange for receiving an actuarially reduced benefit, is a key feature of the nation’s Social Security program. This principle remained in place when Congress increased the Full Retirement Age from 65 to 67. Most workers choose to claim early and retire on the reduced benefits. The option to claim early was enacted over 50 years ago, when Congress set 62 as the program’s Earliest Age of Eligibility. To make up for the extra three years of benefit payments, those claiming at 62 received 20 percent less in monthly benefits than if they had claimed at 65. Despite a significant increase in life expectancy in the intervening years, benefits claimed at 62 today are still about 20 percent less than benefits claimed at 65. This brief asks whether this actuarial reduction is still correct...
How Can the Actuarial Reduction for Social Security Early Retirement Be Right
Traditionally Social Security's Normal Retirement Age has been 65, but for the last 45 years both men and women have had the option to claim benefits at the Early Eligibility Age (EEA) of 62. In exchange for claiming early, individuals receive a smaller monthly benefit. The legislation that established the EEA reduced benefits by 5/9 of 1 percent for each month before age 65, so that a person claiming at age 62 would face a 20 percent [(5/9)*36] reduction. This publication explains the factor of 5/9 and why it has remained constant since the establishment of the EEA.
United States life tables for 1979-81.
This paper presents age-specific mortality rates and expectations of life for the official decennial United States Life Tables for 1979-81. Analysis of these data shows trends and relationships by age sex and color. As in the past mortality rates for males were higher than for females at all ages especially at the young-adult ages. Mortality rates for other-than-white individuals were significantly higher than for white persons at all ages except the very highest ages with the differential being the largest in the 30s and 40s. The authors also examine U.S. mortality trends since the first official decennial life tables were prepared in the early 1900s. Comparisons are made with the situation in selected industrialized countries around the world. (EXCERPT)