Mandatory Spending

Function 650 - Social Security

Raise the Full Retirement Age for Social Security

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of dollars 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015-2019 2015-2024
Change in Outlays 0.0 -0.2 -0.6 -1.1 -1.8 -4.2 -5.3 -6.0 -7.0 -8.7 -3.7 -34.8

Note: This option would take effect in January 2016. Estimates are relative to CBO’s August 2014 baseline projections.

The age at which workers become eligible for full retirement benefits from Social Security—the full retirement age, also called the normal retirement age—depends on their year of birth. For workers born before 1938, the full retirement age was 65. (All years mentioned in this option are calendar years.) It increased in two-month increments until it reached 66 for workers born in 1943. For workers born between 1944 and 1954, the full retirement age holds at 66, but it then increases again in two-month increments until reaching 67 for workers born in 1960 or later.

Under this option, the full retirement age would increase to 67 more quickly and would then increase further. Specifically, the full retirement age would increase in two-month increments for six years, rising to 66 years and 2 months for workers born in 1954 (who turn 62 in 2016) and reaching 67 for workers born in 1959 (who turn 62 in 2021). Thereafter, it would continue to increase by two months per year until reaching 70 for workers born in 1977 or later (who turn 62 in 2039 or later). The benefits for workers who qualify for disability insurance would not be reduced under this option.