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Actuaries to Policymakers: Fix Social Security, Start by Increasing Retirement Age

2008-08-04 09:30:00

Actuaries to Policymakers: Fix Social Security, Start by Increasing Retirement Age

    WASHINGTON, Aug. 4 /EMWNews/ -- The American Academy of

Actuaries is calling on public policymakers to immediately address Social

Security's long-term financial issues by increasing the retirement age to

reflect increased longevity.

    "The program is facing a demographic problem that demands a demographic

solution," said Tom Terry, the Academy's vice president for pension issues.

"Long after all the baby boomers have departed, Social Security's income

will cover only about three-fourths of its costs."

    In a statement released earlier today on behalf of the U.S. actuarial

profession, the actuaries said this permanent imbalance is partially

attributable to increased longevity. The Social Security legislation of

1983, which increased the normal retirement age from 65 to 67, was the only

change in normal retirement age in the history of the program despite

continued increases in average life expectancy. According to the Social

Security Administration (SSA) actuaries, in 1940, 65-year-old males lived

on average 11.9 additional years and 65-year-old females lived on average

13.4 additional years. By 2007 those figures increased to an estimated 16.7

and 19.2 years. The SSA actuaries' intermediate projections show that life

expectancy at age 65 could increase even further-- with males living on

average 18.8 additional years by 2040, and females living on average 20.9

more years.

    The actuaries also said increasing the retirement age may be only part

of the solution, but that by acting now, policymakers would have a fuller

range of policy options to choose from and be able to apply those options

to more of the population.

    "Tax increases could be phased in more gradually, and reductions in

benefit growth could be spread across a much larger population of

beneficiaries, making individual reductions relatively smaller and less

precipitous," Terry said.

    Citing the program's trustees report released in March, the actuaries

said Social Security's "cash flow will be moving into the red in 2017" and

that "Social Security needs a course correction to continue fulfilling its


    The statement, developed by the Academy's Board of Directors, was

released today at a press briefing at the National Press Club in

Washington. Joining Tom Terry to present the statement was Bruce Schobel,

the chairperson of the Academy's Retirement Security Principles Task Force.

The statement is available online at

    The American Academy of Actuaries is a 16,000-member professional

association whose mission is to serve the public on behalf of the U.S.

actuarial profession. The Academy assists public policymakers on all levels

by providing leadership, objective expertise, and actuarial advice on risk

and financial security issues. The Academy also sets qualification,

practice, and professionalism standards for actuaries in the United States.

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Blake Masterson

Freelance Writer, Journalist and Father of 5

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