(Illustration by Melinda Beck)

About a month ago, the Post invited readers to chime in on what they thought were the best ways to fix Social Security

With the help of the Center for Retirement Research, we presented an array of 12 solutions commonly suggested for the retirement system, which is projected to be so depleted that it will be unable to pay full benefits by 2033.  Then we asked readers to pick the options they would consider.
 
This week we’re reporting on the solutions that have resonated with the most readers. We’re tallying the results we’ve seen so far, but you can still check out the graphic and choose the solutions you think would work best. 

We did it once, so why not do it again? Raise the retirement age, that is.

That was the second most popular choice among readers, included in 45 percent of the votes. (Taxing higher earnings was the first choice.)

Maybe it had a familiar ring to it. In 1983, the last time there was federal action to address Social Security’s financial problems, it included gradually increasing the retirement age from 65 to 67–emphasis on g-r-a-d-u-a-l-l-y.

The first increase didn’t kick in until 20 years later, in 2003 when the full retirement age jumped from 65 to 65 and two months. It’s been rising slowly since then, and won’t get to 67 until 2027.

There are several reasons why this approach often comes up, said David M. Certner, legislative counsel and director of legislative policy for government relations and advocacy at AARP. It saves money and it wouldn’t change benefits for many people, for instance those who are near or beyond the current full retirement age. And some people may not understand that it is, in fact, an across-the-board benefit cut, he said.

Right now, Certner noted, the majority of recipients take their Social Security benefits before they reach the full retirement age, with many of them taking it at the first possible opportunity, age 62. “When you take the benefit early, you take it at an actuarially reduced level,” he said.

In other words, because the same amount of money will be spread over more years, the yearly benefit will be reduced. For a 62-year-old taking benefits now, when the full retirement age is 66, the amount received is reduced by 25 percent. Raise the full retirement age to 70, and someone taking benefits at age 62 would see payments reduced by roughly twice as much, he said.

“When people talk about reducing benefits, they usually talk about at least let’s protect benefits for those who really need it, at the low end of the income scale,” he said. “And those are often the people who take benefits early.”

Even with the later retirement age, Social Security “has not kept pace with increasing longevity,” said Romina Boccia, the Grover M. Hermann fellow in federal budgetary affairs at The Heritage Foundation. When Social Security was adopted, men reaching age 65 could expect to spend 13 years in retirement , or 16 percent of their lifetimes, she said. Today a male retiree will live 18 years on average beyond 65 and spend 20 to 25 percent of his life collecting Social Security benefits.

“The Social Security program is more sustainable if people retire later,” she said. “People spending more years working also allows them to save more.”

While the idea of working later may not seem appealing, delaying the benefits may save the payments for when people need them the most, she said.

“It’s very clear that Americans at older ages, 80 or 95, are much more likely to have run out of alternate sources on income and savings and have a much greater need for Social Security than Americans 66 and 67,” Boccia said.

But Boccia noted that raising the retirement age may have a disproportionate effect on lower-income workers. “There are certainly populations, especially lower income populations who are engaged in more labor intensive types of work who tend to have shorter life expectancies than wealthier recipients,” she said. That might be addressed in other ways, she said.

Certner said that a member of Congress, whom he would not name, once told him that “the people supporting raising the retirement age are the ones who don’t have dirt under their fingernails.” Life expectancy has increased more for higher income individuals than lower income workers who often have no income but Social Security in retirement, he noted.

As for people working longer, “that only works if there are jobs for people,” Certner said. “The reality is companies are not rushing out to hire 65 or 69 year-olds.”

Read More:

How you would fix Social Security: Tax higher earnings

What to do if your pension is frozen

Finance Lab: They have a pension, long-term care insurance and savings. But is it enough?