To keep Social Security solvent, Congress should start by increasing the normal Social Security retirement age, a top actuary testified today on Capitol Hill.
Thomas Terry, chairperson of the public interest committee at the American Academy of Actuaries (AAA), Washington, appeared at a hearing on Social Security program finances organized by the House Ways and Means Committee's Social Security subcommittee.
Actuaries started the AAA to give policymakers help with actuarial analysis.
Traditionally, the AAA has not taken positions on major policy debates, but, because of concerns about the long-range solvency of Social Security, the group decided in 2008 to advocate for a position for the first time, Terry said, according to a written version of testimony.
The position is a call for increasing the Social Security retirement age.
"Actuaries believed it was necessary to strongly recommend for the expeditious consideration of an adjustment to the Social Security program to help put it on a path toward sustainable solvency," Terry said.
Social Security program trustees have been warning that the program is out of actuarial balance for more than two decades, and that means, that, as soon as 2036, the program may be unable to pay benefits in
full in a timely fashion, Terry said.
"Adjusting the system today means that changes can be phased in slowly over many years," Terry said. "Ignoring the projections and deferring needed adjustments to the future will result only in more difficulty down the road."
The change is necessary because Americans are living longer and spending more years living in retirement, Terry said.
Congress could use many approaches to increasing the normal retirement age, Terry said.
Strategies could include simply raising the normal retirement age, indexing the retirement age so that life expectancy at the normal retirement age remains constant, or adjusting the normal retirement age to maintain Social Security program actuarial balance, Terry said.
To help older workers who face age discrimination, Congress could take steps such as promoting employment of older workers by reducing the payroll tax for older workers, Terry said.
"Difficulty in continuing to work in occupations that involve physical labor could be addressed by additional occupational bridge pensions, perhaps combined with revisions to existing disability programs," Terry said.
Terry suggested modest changes in inflation adjustments also could help bring the Social Security program back into actuarial balance.