Filed Under:Life Insurance, Life Planning Strategies

Social Security: 68 Could Be the New 65

WASHINGTON BUREAU -- Members of a federal deficit-fighting panel may say Congress should raise the normal Social Security retirement age to 68 and reduce annual cost-of-living increases.

The panel, the National Commission on Fiscal Responsibility and Reform, is also thinking about calling for tough Medicare cost curbs, a 3-year federal salary freeze, a ban on congressional earmarks, and studies on the idea of limiting the home mortgage interest deduction and reducing spending on defense and federal farm subsidies.

The 18-member, bipartisan panel has included those provisions and others in a draft report posted today. The final draft is due Dec. 1.

President Obama created the panel. Members hope to come up with recommendations for reducing the federal budget deficit to about 3% of gross domestic product by 2015, from 8.9% for the fiscal year that ended Sept. 30.

To get from the draft into the final report, a proposal must win the votes of at least 14 of the panel members.

The American Academy of Actuaries, Washington, wrote to the commission in October to urge it to increase the normal retirement age, to reflect the steadily increasing life expectancy of the typical American worker.

The mortgage deduction changes proposed in the draft could remove deductions for

home equity loans and for mortgages exceeding $500,000.

The proposed defense spending cuts could total $100 billion per year by 2015, and the farm subsidy cuts could amount to $3 billion per year.

The normal Social Security retirement age is now 67. If the draft recommendations are adopted as written, the normal retirement age would increase to 68 between now and 2050, then increase to 69 between 2050 and 2075.

The panel also is considering a proposal to increase the taxes high-income taxpayers pay on Social Security benefits.


CORRECTION: An earlier version of this article gave an incorrect description of the status of the commission's proposals. The proposals are still in a draft stage and have not yet been adopted.

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Nichole Morford

Nichole Morford
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