Raising retirement age may not lower social security costs

http://www.msnbc.msn.com/id/40262020/ns/business-your_retirement/

By STEPHEN OHLEMACHER
The Associated Press
updated 32 minutes ago 2010-11-18T22:44:36

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WASHINGTON — Raising the retirement age for Social Security would disproportionately hurt low-income workers and minorities, and increase disability claims by older people unable to work, government auditors told Congress.

The projected spike in disability claims could harm Social Security's finances because disability benefits typically are higher than early retirement payments, the General Accountability Office concluded.

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The report, obtained by The Associated Press ahead of its scheduled release Friday, provides fodder for those opposed to raising the eligibility age for benefits, as proposed by the leaders of President Barack Obama's deficit commission.

"There's more to consider than simply how much money the program would save by raising the retirement age," said Sen. Herb Kohl, D-Wis., chairman of the Senate Special Committee on Aging. The report shows an unequal effect on certain groups of people, he said Thursday, and many of them "would have little choice but to turn to the broken disability program."

Under current law, people can start drawing reduced, early retirement benefits from Social Security at age 62. Full benefits are available at 66, a threshold gradually increasing to 67 for people who were born in 1960 or later.

The deficit commission's leaders, Democrat Erskine Bowles and Republican Alan Simpson, last week proposed a gradual increase in the full retirement age, to 69 in about 2075. The early retirement age would go to 64 the same year.

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