Nikki Haley says she wants to raise Social Security’s full retirement age — what you need to know about the FRA now

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Presidential candidate Nikki Haley proposed raising the full retirement age for future Social Security beneficiaries during a town hall meeting in Iowa — a controversial suggestion, given its potential impact on benefits.

“You reform entitlements, but you do it in such a way that you don’t take anything away from seniors or people who are ready to retire,” he said in a meeting seen in a video by a local news site. The Daily Nonpareil, “You focus on the new generation. You focus on what’s next.

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Haley did not say what the full retirement age, also known as FRA, should be, or when the government should implement the change.

Raising the full retirement age is a controversial topic, as some critics call it a cut in benefits. Alicia Munnell, director of the Center for Retirement Research at Boston College, argued that individuals who cannot change the required age to retire will benefit less from the adjustment than those who decide to delay their retirement age. “Currently, claimants at age 62 receive only 70% of the benefits available at 67,” she wrote in a Marketwatch column. “If the full retirement age were raised to age 70, that amount jumps to 55%.”

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Social Security’s full retirement age has not changed since 1983, when legislation called for a gradual increase in the retirement age for individuals between the ages of 65 and 67. Age 65 was the original full retirement age for beneficiaries, set when social Security Was built in 1935.

As it currently stands, the full retirement age for anyone born in 1937 or earlier is 65, and that FRA increases by two months every year until 1943. Between 1943 and 1954, the full retirement age was 66. For anyone born in 1960 or later, the full retirement age is 67. Individuals can begin claiming benefits as early as age 62, although there will be a permanent reduction in benefits any time before full retirement age. (By comparison, delaying Social Security benefits until age 70 would also increase the beneficiary’s check.)

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The notion of changing the FRA for younger generations isn’t entirely unheard of — it happened during the 1983 reform that raised the age from 65 to 67, Social Security chief steward Stephen Gauss told MarketWatch. The law was passed in 1983, but the change only went into effect in 2000 for people who turned 62. Goss also said that increasing the full retirement age doesn’t fix Social Security’s bankruptcy problems (the two trust funds that support Social Security are expected to run out) until 2035, at which point beneficiaries will lose 20%. deduction will appear). The increased FRA will have to be commensurate with longer life expectancies, he said.

Haley also suggested limiting benefits to wealthy Americans. “Many of them will tell you they don’t even want it,” she said. The former South Carolina governor said cost-of-living adjustments should also be tied to inflation, “something Republicans and Democrats agree on,” she said. “We can get it done.”

Haley did not specify which types of inflation benefits should be linked to — they are currently linked to the Consumer Price Index for urban workers, though legislators have proposed switching to the Consumer Price Index for the elderly, which Measures the “basket”. The goods and services older Americans spend on.

In her speech, Haley said Medicare should be expanded in the form of Medicare Advantage to promote more competition and choice.

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