Would a Higher Social Security Claiming Age Boost the Economy?

The Impact on GDP

Goldwein says a higher full retirement age would have ancillary benefits beyond buoying the program's funding status. Specifically, he suggests raising the retirement age would boost economic growth by promoting delayed retirement for those who are able.

"Although workers are eligible for benefits before the full retirement age and can claim benefits without retiring, the official age nonetheless sends powerful signals for when workers should retire," he suggests. "Indeed, age 67 is the second most popular age in which workers retire, after the earliest eligibility age of 62."

According to Goldwein, raising either the early or full age would lead some workers to extend their careers as life expectancy rises, and this additional work would lead to higher output. He cites estimates published by the Congressional Budget Office showing that, for every one-year increase in the full retirement age, this would result in nearly three months of additional work.

This would in turn boost the size of the labor force and the economy by about 0.5%, according to the CBO.

"Raising the earliest age would generate an even stronger effect," Goldwein says. "Other groups have estimated even larger effects."

The Impact on Seniors

One area where Ghilarducci's and Goldwein's positions seem to differ the most is on the impact such changes would have on the lived experiences of older Americans.

According to Ghilarducci, a significant number of older Americans earning modest wages are stuck in physically demanding jobs, and a stable retirement is an elusive goal at any age. She says it is "misguided and unrealistic" to expect these workers to keep working into advanced old age. A better way to close the retirement income gap, she argues, is to ensure that all jobs come with retirement benefits.

Goldwein, on the other hand, argues that continued work resulting from changes in retirement signals can also enhance the well-being of many seniors.

"For example, each additional year of work is estimated to increase wealth by 5% and retirement income by about 10%," Goldwein says. "The choice to delay retirement also appears to result in better health, stronger social networks, lower rates of mortality, and other benefits that improve overall welfare and happiness."

To be sure, Goldwein says, the choice to raise the retirement age is not without its trade-offs. He notes that each one-year increase in the normal retirement age would be the equivalent of a 5% to 6.5% reduction in lifetime benefits for most retirees.

In the end, both Goldwein and Ghilarducci also agreed on the need for better policies to reduce employer discrimination and support older workers — and Goldwein went further by calling for a broader rethink of retirement culture, pushing toward a system that allows and encourages retirement flexibility.

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