The United States already has one of the highest ages in the world for collecting full retirement benefits from government-sponsored plans. But as other nations grapple with how to manage financial resources for populations increasingly getting older on average, it’s fair to ask how resilient an American retirement plan will be should the U.S. follow suit and raise the retirement age further.
This is according to David Weinstock, a certified financial planner, in a column published this week by Kiplinger.
Earlier this year, France raised its retirement age from 62 to 64, sparking national protests and demonstrations across the country. Part of the vitriol — besides coming from a population that generally looks down on any reform of its sécurité sociale system — came from the way it was implemented, as French President Emmanuel Macron circumvented his nation’s parliament to implement the change.
As a result, that has some stateside retirement observers looking at the United States and asking, “what if?”
“It’s well known the U.S. is facing a retirement crisis, with baby boomers and millennials headed into their golden years facing potential cutbacks in Social Security benefits,” Weinstock wrote. “Social Security trustees project the fund to run out by 2033 — and then pay only 77% of benefits currently projected, unless changes are made.”
While that isn’t indicative of actual action on the topic, Weinstock advocates for people to make plans now in order to reinforce their retirement benefits later, and to potentially protect for future changes.
“Many experts might say the best approach is to just wait it out — don’t start taking benefits until the age when you’re entitled to collect 100% of your benefits (currently that’s 67 years old for anyone born after 1960),” he wrote. “That’s certainly a good idea if you can literally afford to do so. But for those who can’t or don’t want to wait, there are other planning options.”
Weinstock shared three general tips for people to bolster their retirement security: bolster savings outside of Social Security; work for a longer period of time; and consider applying for spousal Social Security benefits when reaching full retirement age.
These tips could be helpful, but they are also general in nature, Weinstock wrote.
“The permutations are almost endless when it comes to ways you can maximize the highest possible retirement income,” he said. “It’s certainly a best practice to consult with a financial adviser in order to make the right decisions based on your specific situation.”
Financial planners have often recommended waiting until age 70 to take Social Security benefits, and some professionals have positioned the use of a reverse mortgage — and home equity more generally — in the interim as a tool to assist with that wait.