In voting for the fiscal commission’s deficit reduction plan, Democratic Senator Richard Durbin of Illinois challenged his liberal colleagues to give serious consideration to increasing the retirement age, which is now 67 for full benefits and 62 for reduced benefits.
Citing longer life spans, lifting “the retirement age one year over 40 years is hardly radical” he said after voting in favor of the plan that would close Social Security’s long-term financial shortfall.
Durbin, like so many others, may be overestimating workers’ capacity to stay employed. While Americans are in fact living longer, they are not getting any healthier. A new study from the Journals of Gerontology helps makes this case, and reinforces the point that any plan proposing to increase the retirement age must also address a job market that is unkind to older, sicker workers with higher health care costs.
The study says the celebrated increase in life span of recent decades has not been accompanied by a similar increase in the age at which peoples’ bodies begin to break down from heart disease, cancer and diabetes. Nor have people reaching retirement years – the middle and late 60s -- aged with middle-aged vigor or undiminished mental capacity, say demographers Eileen M. Crimmins and Hiram Beltrán-Sánchez of the University of California Davis.
“We have always assumed that each generation will be healthier and longer lived than the prior one,” they wrote in a paper that reviewed the ages at which older people get hit with chronic diseases that diminish their capacity to work. “The growing problem of lifelong obesity and increases in hypertension and high cholesterol among cohorts reaching old age are a sign that health may not be improving with each generation.”
The miracles of modern medicine were supposed to contribute not only to longer lives, but to more healthy and productive years. Demographers referred to it as the “compression of morbidity.”
But rather than compressing, morbidity appears to be expanding. For instance, reduced death rates from heart disease accounted for 60 percent of the increase in life expectancy between 1970 and 2000. Medical advances have allowed many more people to survive heart attacks and strokes.
But “it is not until recently that there has been a decrease in the likelihood of actually having a heart attack by a given age,” the authors noted. That means in the years ahead there will be many more heart attack survivors with higher health care costs to prevent subsequent attacks who will be spending more years in the workforce. Moreover, many of those survivors will be limited in what work they can do.
Diabetes, meanwhile, rose 47 percent between 1987 and 2002, largely due to the widening obesity epidemic. The lifetime risk of the average American contracting diabetes is now 33 percent for men and 36 percent for women. They, too, face higher health care costs and diminished work capacity as they age.
A recent survey of 40-to 60-year-olds found a cohort that, compared to previous generations, had higher levels of hypertension and high cholesterol. While it is better controlled with prescription drugs compared to previous generations, the data did not suggest that the middle-aged workforce now approaching what used to be considered retirement age is in the peak of health. “There is little evidence from trends in these measures that we are improving our physiological state as we approach old age,” Crimmins and Beltrán-Sánchez wrote.
The authors also reviewed trends on disabilities, arthritis, dementia and other diseases that may limit a person’s ability to function at work. Here the results were mixed. Disability rates have declined in recent years, and medicine has given arthritis sufferers greater flexibility. But, the authors wrote, “a number of researchers have reported increasing disability and reduced functioning ability in newer cohorts of people approaching old age.”
Their conclusion: “When mortality declines because people survive longer with a disease rather than because people were less likely to get a disease, there will be an expansion of disease morbidity.”
That translates into workers with higher health care costs and less capacity to function at peak productivity.
Raising the retirement age may contribute to keeping Social Security’s books balanced. But the workers left behind increasingly aren’t the ones that employers look to hire or keep employed.
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Most people are working and living longer, so it seems like a no-brainer to raise the retirement age to help close the long-term Social Security funding gap. But the move could backfire and not save as much as predicted. Why? Not all groups are able to work longer, a new report from the Government Accountability Office says.
“Raising the retirement ages would likely increase the number of workers applying for and receiving disability insurance benefits,” which also comes out of Social Security, said the report, which was prepared for Sen. Herb Kohl (D-WI), chairman of the Select Committee on Aging.
The report presented a sobering view of the health status of near-retirement age population. About a quarter of Americans aged 60-61 have a work-limiting health condition, according to the report, and about two-thirds the ones who are still on the job report working in occupations that are “physically demanding.”
Raising either the early or full retirement ages above where they are now would incentivize many more of those workers to seek disability coverage in order to preserve their higher payouts later on, the report suggested.
Two academic studies cited in the report said the last time the government raised the retirement age – full retirement was lifted to 67 from 65 by Congress after receiving the 1983 Greenspan Commission report – had a similar effect. It has already “led to more disability applications,” the report said.
The report confirms that fewer Americans are working physically-demanding jobs these days. That number fell from 57 to 46 percent between 1971 and 2006. Over the same period, life expectancy at age 65 jumped 3.3 years to 18.5 years.
But not all groups benefited equally from advancing health and cushier jobs. African-American males improved just 2.6 years compared to 4.0 years for white males, for instance.
The report took a snapshot of those on the cusp of retirement, and found those reporting good or excellent health were twice as likely to have some college education, twice as likely to be working full-time, had twice the income and four times the wealth of those reporting poor or fair health. In other words, people who are the most dependent on Social Security for retirement income are the ones most likely to go on disability if denied early retirement benefits.
While raising the full retirement age would still save the system money, “raising the early retirement age would have a negative impact on (Social Security) solvency because disability costs would rise and expected total lifetime retirement benefits would not change,” the report concluded.
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