I for one look forward to working at my miserable, low-paying office job until I’m 75 or keel over first. /s
Especially considering I’ll probably get stuck job searching some of that time, too.
I learned something interesting today about the National Average Wage index.
This is a figure supposed to represent some kind of average earnings. It’s calculated every year - not exactly sure how. But for example in 2021, it’s 60,575.07 while in 2011 it’s 42,979.61.
Your earnings at any given year are multiplied by the ratio of the AWI in the year you turned 60, to the AWI for the year in particular. So for 2021, your earnings are multiplied by 60,575.07 / 42,929.61 - or 1.411. This means that if you earned 100,000 in 2011, it’s treated as if you’d earned 141,103 dollars.
Your AWI figure, when your benefits are calculated, is frozen as of the year you turn 60. Earnings that year and later on are frozen - taken at 1 to 1, exactly what you earned even if you don’t retire for a few years.
So far, so good.
BUT - per what I read today, if you turn 60 in a “down” year, where the AWI has decreased… you are basically screwed. This appears to have happened most recently in 2009 (it went from 41,334.97 to 40,711.61). I found some online articles predicting serious doom and gloom for those turning 60 in 2020 - as a single significant downturn would basically affect EVERYTHING.
I played with cutting the AWI figure in the year I turned 60, by 1,000 dollars, and it cut my benefit by about 26 dollars a month. Cutting it by 2,000 dollars, my benefit goes down 50 bucks or so. And so on.
As it happens, the doomsayers’ dire predictions did not come to pass - the AWI actually went up a bit in 2020, and a LOT in 2021. But if you happen to turn 60 in a year where the AWI has dropped, your earnings for SS calculation in recent years might actually be LESS than you actually earned. It worked out that way on my spreadsheet.
Maybe there’s an aspect to the calculation that says “either the AWI-adjusted figure, or the actual earnings, whichever is more”.
I could DEFINITELY see the AWI being used as a tool to lower benefits somewhat. Maybe make the year it’s frozen earlier on - the year you turn 58 or something. That cut my benefit by 5 bucks a month (I suspect it would have a larger effect on people with lower earnings, since mine are well into the are where I’m only getting 15% of my average earnings back. Even just bumping the full retirement age up a little would give more years that are not multiplied.
Or maybe even just tweaking how the AWI is calculated, to give a somewhat lower figure.
Now, 5 bucks a month, or 25, or whatever, is not a huge difference - but cumulatively it’ll add up.
Paul Krugman gets deeply into the demographics, and the rise in life expectancy at age 65 in this article. I don’t know if it’s paywalled, and I can’t find a gift link button:
https://static.nytimes.com/email-content/PK_sample.html
One of my favorite lines, and something I was thinking about as well is:
One way to think about all of this, which is only a slight caricature, is that Republicans are telling janitors in Oklahoma that they can’t get benefits in their 60s — even though their life expectancy hasn’t gone up by much — because lawyers in New York are living longer.
This parallels the outrage that was carefully cultivated on the loan forgiveness program so nicely (“Why should plumbers and carpenters pay for rich kids to major in gender studies”). That was a silly take (IMO), because, for example, plumbers may have student loan debt, and actual rich kids don’t.
However, in the case of social security and Medicare, raising the eligibility ages actually will harm the older, more rural Republican base, but not the so-called coastal elites, since the so-called coastal elites typically work like I do – by typing on a keyboard, not by hauling in crops or mining coal or fixing oil rigs or whatever.
Or standing for 8 hours, and lifting, stocking coolers and shelves. These jobs often don’t get mentioned in this context. However, they’re low paying, physical, and man do my feet, back, and legs hurt.
I (semi) retired early 'cause I had to. I don’t get much SS and I get almost none of my husband’s record. Raising the age hurts people in these sorts of jobs which skew female. Raise the cap.
Maybe increase the Government Pension Offset? 
And I am eligible for full SS…in 2034. D’oh!
I hadn’t realized they were ALSO talking about raising the Medicare age. UGH. That’ll almost be a bigger impact than the retirement issue.
Right now, if someone wants (or NEEDS) to retire before their full retirement age, they can do so, with the understanding that they are taking a permanent cut in their benefits. If they are not able to get health coverage either, that’s an even bigger deal.
Because money has to come in from one group of people, in order to pay a different group of people. And the ratio between the two groups is changing for the worse.
In 1940, there were 42 workers per retiree. Today the ratio is 3-to-1; by 2050 it will be 2-to-1.
https://www.uvm.edu/~dguber/POLS21/articles/quick_facts_on_social_security.htm
That’s not the definition of a Ponzi scheme (“a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors”).
Most government spending is coming from one group of people (taxpayers at large) in order to pay a different group (soldiers, bridge-builders, teachers, etc.). Would you describe most government spending as a Ponzi scheme?
In 1940 there were many workers per retiree because the very first retirees were that year (The very first check was issued on 31 Jan 1940 to Ida May Fuller. (cite)) In 1939, there were 34 million workers to zero retirees.
The ratio of workers per retiree had declined to 3.2 workers per retiree by 1975 (nearly half a century ago); it’s currently (2022) about 2.8 to 1 (Your cite is more than twenty years old, among other problems.) The more recent decline is explained mostly by longer lifespans and the relative size of the baby-boomer generation compared to the generations following; some estimates (see the 2022 Trustee’s report) show the ratio stabilizing or even rising somewhat as the baby-boomers die off.
As long as the frothing racists don’t prevent immigration, the US can probably import enough willing future taxpayers to keep the system going well past the Baby Boomer’s demographic bulge.