Who Decided Age 65 is Retirement Age?

[Broomstick]

Who and/or how was age 65 determined to be the retirement age?

(For most purposes - I am, of course, aware there are exceptions to this general rule).

[Qadgop_the_Mercotan]

Germany became the first nation in the world to adopt an old-age social insurance program in 1889, designed by Germany’s Chancellor, Otto von Bismarck. The idea was first put forward, at Bismarck’s behest, in 1881 by Germany’s Emperor, William the First, in a ground-breaking letter to the German Parliament. William wrote: “. . . those who are disabled from work by age and invalidity have a well-grounded claim to care from the state.”

One persistent myth about the German program is that it adopted age 65 as the standard retirement age because that was Bismarck’s age. In fact, Germany initially set age 70 as the retirement age (and Bismarck himself was 74 at the time) and it was not until 27 years later (in 1916) that the age was lowered to 65. By that time, Bismarck had been dead for 18 years.

By the time America moved to social insurance in 1935 the German system was using age 65 as its retirement age. But this was not the major influence on the Committee on Economic Security (CES) when it proposed age 65 as the retirement age under Social Security. This decision was not based on any philosophical principle or European precedent. It was, in fact, primarily pragmatic, and stemmed from two sources. One was a general observation about prevailing retirement ages in the few private pension systems in existence at the time and, more importantly, the 30 state old-age pension systems then in operation. Roughly half of the state pension systems used age 65 as the retirement age and half used age 70. The new federal Railroad Retirement System passed by Congress earlier in 1934, also used age 65 as its retirement age. Taking all this into account, the CES planners made a rough judgment that age 65 was probably more reasonable than age 70. This judgment was then confirmed by the actuarial studies. The studies showed that using age 65 produced a manageable system that could easily be made self-sustaining with only modest levels of payroll taxation. So these two factors, a kind of pragmatic judgment about prevailing retirement standards and the favorable actuarial outcome of using age 65, combined to be the real basis on which age 65 was chosen as the age for retirement under Social Security. With all due respect to Chancellor Bismarck, he had nothing to do with it.

http://www.ssa.gov/history/age65.html

Hopefully, more posters with deeper info will be along to contribute soon.

[barbitu8]

I don’t think anyone decided age 65 to be the retirement age. You can (but not must) start collecting full old-age Social Security benefits at age 65 (now 66 and soon to be 67). You may defer benefits until age 70, increasing your monthly benefits by 5/9% a month for each month you delay receiving benefits, the same formula used to deduct benefits for early retirement, down to age 62.

Note that the law is called OASDI, which is an abbreviation for old-age, survivors’, and disability insurance (benefits). The law did, at one time (up to about a decade ago) require an individual to be actually retired before receiving full benefits. (There was a maximum amount the individual could earn.) This is no longer the case, unless you wish to receive early retirement benefits, when you still have to be retired (but still earning up to a certain maximum amount).

At one time, some governments (state, local, and some federal positions) required one to retire at a certain age. Some private companies might have had the same policy. This would now be determined to be discrimination because of age.

[The_Second_Stone]

I’d always heard Bismarck.