With the poor economy and the decreased value of many people’s retirement accounts, the number of older people returning to or not leaving the workplace is growing, especially as the Baby Boom generation increasingly reaches retirement age. Why not reduce the age that a person can qualify for the maximum social security benefits from 70 to 62 or 65? This would likely result in the immediate retirement of a large number of people, freeing space for new employees. It would also put money into the economy as both retirees and the newly employed who replace them would have more to spend. If the age were set at 65, retirees would also qualify for Medicare benefits. A cap could be placed on earnings from wages or salary for anyone receiving these increased social security benefits to ensure that recipients actually leave the workforce; anyone exceeding that cap would have their benefits reduced to the old levels. These increased benefits could also be time limited to only those people retiring in, say, the next 3 years. The expense of the increased social security and Medicare benefits would need to be funded, but those costs may be offset by the potential benefits of decreased unemployment. It would be interesting to run the numbers on this idea to see whether it might have merit.
Disclosure: My husband and I wouldn't quality under the time-limited option I'm suggesting, though if the benefits were extended another couple years, we would.
