Congress Clarifies Social Security's Retirement Ages

The Senate passed the Claiming Age Clarity Act by unanimous consent this week. Having passed the House last December, the bill will now go to the President for his signature. The legislation will change the official names of Social Security’s three significant retirement ages to the Minimum Monthly Benefit Age (62), the Standard Monthly Benefit Age (67), and the Maximum Monthly Benefit Age (70).

Research shows that these new names will better communicate the tradeoffs of claiming Social Security benefits at different ages and in the process could help encourage delayed claiming by helping beneficiaries understand the higher monthly benefit that will result. 

Changing the way the Social Security ages are described is a good first step in improving retirement signals so that workers can make better informed retirement decisions. These better decisions, in turn, can lead to stronger economic growth, lower deficits, increased wealth and income among seniors, and improved physical and mental health, socialization, and even life expectancy, among other benefits.

Other changes, such as repealing the retirement earnings test, counting every year of work toward benefits, or raising the retirement ages can further improve retirement decisions and significantly strengthen Social Security solvency in the process.

Working longer can be a helpful way for seniors to improve their own retirement security. But the best way to improve retirement security is to avoid Social Security’s looming retirement trust fund insolvency and resulting benefit cut by enacting a thoughtful combination of revenue and benefit changes to secure the program for current and future retirees alike.