By Jeffrey Freedman
It is becoming increasingly clear that life expectancy is directly related to income. A study in the Journal of the American Medical Association shows that, in general, higher-income males live 15 years longer than low-income males, and higher-income women live 10 years longer than their low-income peers.
Clearly this is going to effect Social Security, particularly if Congress raises the retirement age.
The benefit structure of Social Security is intended to redistribute wealth by providing lower-income workers higher benefits in proportion to their earnings than higher-income earners. Unintentionally, however, it benefits those who live longer (the wealthy) because they receive benefits for more years.
An additional effect is that as workers age, they are more likely to become disabled to the extent they can no longer work. These workers turn to Social Security Disability Insurance (SSDI), to give them a base income until they reach retirement age.
Disability rates double from ages 40 to 50, and again from ages 50 to 60. SSDI recipients cannot move to Social Security retirement until they reach full retirement age, so historically we have seen increasing the retirement age means that workers who should be receiving retirement benefits stay on SSDI longer.
For example, in 1983 Congress raised the age for collecting full retirement from 65 to 66 for those born from 1943 to 1956, and to 67 for those born in 1960 or later. By 2011, there were 400,000 people ages 65 to 66 who should have moved to Social Security retirement, but who continued to receive SSDI benefits because they were too disabled to work and too young to retire.
Raising the retirement age doesn’t kick the can down the road – a favored tactic of Republicans – it kicks the can into another road that runs parallel to the current road. The problem is still there, but it’s impacting the Social Security Disability trust fund instead of the Social Security retirement fund.
Typically, when one of these funds runs low, Congress shifts money from the richer fund into the one that’s short – like taking money out of your right-hand pocket and putting it into your left.
Currently, there is a backlog of 1 million SSDI claimants waiting for a decision on their benefits. If retirement benefits are not available until workers are 70 years old, this backlog is only going to grow; while the rich become richer, and the poor become poorer.
Jeffrey Freedman serves on the New York State Bar Association Disabilities Committee, is former chairman of the Erie County Bar Association Disability Committee, and is a sustaining member of the National Organization of Social Security Claimants Representatives. Freedman has fought for the rights of the disabled since 1977.