Raising the Retirement Age: What Does It Mean?

There is a lot of talk going around about certain government policies that might be coming close to implementation soon. Though only a few of them have garnered the same amount of pushback that the new rule of raising the retirement age has gotten.

Yes, of course, people are reacting negatively to this news because who in their right mind wants to keep working well into their old age?

Even if the raise in retirement age is only by a couple of years, that is a significant period that will cut into what should be a person’s golden years. 65 is already pushing it for a lot of people who actually want to retire earlier than that. But at 70? God, no.

As doctors, we know exactly what kind of toll our body takes on when working overtime. And this raising the retirement age business sounds a lot like the worst kind of overtime, right?

But what does it mean for you and me? Is it even going to happen or is this just another scare? Could it actually be a good idea? Let’s break it down!

• Why The Retirement Age Might Be Raised?
• Will It Actually Work?
• Retirement And You

Retirement As We Know It

So, ‘what does retirement mean for me’ sounds like a bit of a useless question to ask here because, well, literally look at our website. But let’s take a revision course for those in the back.

Retirement happens for a number of reasons, from satisfaction over having achieved your goals early to chronic illness not allowing you to actively work any longer. 

But most people retire because of the age limit set for retirement, which is established at 67 years old for anyone born after 1960. It used to be 65, but the Social Security Amendments Of 1983 raised the age limit.

However, senior citizens could start reaping the benefits of their retirement funds as early as 62 years. But this isn’t recommended because it ultimately thins out your money for any future monthly payments. And when you’re not actively making money back, that can be an issue.

Physicians tend to be an outlier when it comes to the retirement age, at least in the U.S. While most of America is content retiring at 63 years, doctors tend to go the extra mile and work for a couple more years. That sets their median age of retirement at 65 years.

Why? Because we usually have a later start to our careers. Between a bachelors degree, med school, residency and specialization, it actually takes us a much longer time to get established. And so, we also retire later, to make up for the time prepping for our practice taking off.

Regardless, we have been delaying retirement more than any other profession in the country, and that has been the trend for a while now.

Why Is The Retirement Age Being Raised?

Obviously, no one wants to keep working well into their 60s, let alone until they hit 70. So if there is so much criticism, why is Congress even thinking of raising the retirement age in the first place?

Well, there are quite a few factors in play here that are leading to a lot of countries raising their retirement ages, not just the States.

We’re All Living Way Longer Now

I mean, this is actually the main reason for it all: We are simply living longer lives. 

As history has gone by, the life expectancy for humans has gradually risen. A couple of centuries ago, we were lucky to live into our 30s. Fast forward to now and it isn’t unheard of to have grandparents easily in their 80s.

I mean, there’s even an entire island filled with people that have hit their 100 year mark. Clearly, we’ve gotten better at this whole living longer thing. But that also takes a toll on the population that is still young.

Because there is an unprecedented number of people retiring from the workforce, we need to support all of them in their old age. And if they keep living for a good 20 to 40 years even after retirement?

Well, this puts the bulk of the pressure to support these senior citizens on a still young populace that is just now finding their footing. It is resources that are spent on an aging population that can’t pay it back, meanwhile the birth rate is lower than it has been in years.

And with the way retirement funds work, this is a big problem. But more on that later.

Social Security Is Running Out Of Funds

Say the retirement age doesn’t go up. That would mean Social Security will have to come up with a plan to make sure they can aid every single senior citizen that is going to be retiring. And they need to do it in a way where it is sustainable.

But here’s the thing: Social Security simply doesn’t have the funds to support this number of retirees for so many years even after retirement. Social Security payouts work on a ‘pay it forward’ type of deal.

When you’re paying your social security taxes, they aren’t being funneled away into a private account for you. Instead, you’re helping the current retiree crop with their expenses.

So, when you retire, there’ll be some young’un working and paying their taxes to help fund your retirement. And so on, and so forth.

But if the retiree pool is only growing, with extended life expectancies, and the actual number of young people entering the workforce is low? That means that Social Security’s trust fund is getting drained, faster than they can recuperate.

Raising the retirement age means retiree turnover slows down, letting Social Security stretch out its tax money without having to make huge budget cuts. 

A Physician Shortage Across The Country?

Okay, this one is specifically for us. But if you’re in the medical fraternity, it should come as no surprise to hear that we are seeing fewer and fewer practicing physicians. Why? Well, look at the first point again.

Physicians are aging up, just like everyone else. 

But unlike other professions, there aren’t as many young doctors that can take the place of those retiring.

Our late start is a double edged sword. Between licensing exams and matching up with residencies, it has become so much harder to go through med school. And it’s expensive too.

Nobody wants that much student debt with no way to start paying it off well until well into their 30s.

And the problem is, certain specialties just age faster. Think those actively on the hospital floor, like Internal Medicine and Emergency physicians. How do you expect the healthcare sector to function when it lacks enough primary care doctors to cater to everyone?

Raising the retirement age allows us time to open up more opportunities for young grads, while not endangering the patients with a lack of medical assistance because all the doctors just happened to retire at the same time.

Does It Actually Benefit Anyone?

So, it isn’t like they are raising the retirement age for kicks. Clearly there are quite a few things to account for here but, let’s be honest for a second: What does it mean for all of us? Who is this actually benefiting? Is there a long term plan here?

First, let’s get the nitty gritty out of the way. Raising the retirement age is not a perfect solution to the program’s financial issues. It won’t magically bring in the funds it needs. Nor will it solve the employment crisis or the breakdown of the healthcare industry that is currently ongoing.

What it does, however, is cut corners with the people that it’s supposed to help. Take the actual retirement, for example. Normally, you’re allowed to access ‘early retirement’ funds, meaning you can collect your checks from Social Security while still working your job.

However, the full benefits would only kick in if you don’t touch the retirement account until you reach age 70. 

Which is bogus especially when you consider who this ‘longevity’ issue actually excludes. Remember how I said earlier that certain specialties retire faster? Yeah, that’s because being an emergency doctor is no joke.

Labor intensive jobs would not see any benefits from having a later retirement age. Their bodies break down faster, so they need more resources in the future.

Resources that will not be available to the most vulnerable in the workforce. And this isn’t just about physicians. I’m talking low-income workers, disabled folk and even people of color that are often marginalized and given no space to grow due to discrimination.

Speaking of, what are the kids going to do if no one is retiring? 

The job market isn’t exactly doing great right now and if higher ups don’t retire from their positions soon, that would mean the youth entering the workforce has no employment and no way to grow their wealth.

There would be zero opportunities for them. They would not only have to shoulder the responsibilities of struggling to earn for themselves, but also fund a growing senior citizen population when the time comes.

And physicians, well, we don’t have a concrete idea on how it would impact us in the future.

But we do know that this would mean fewer residencies, and longer hours because there are simply not enough doctors to go around, and less pay for more work. Sure, we could try combatting all that through mentorship programs or even part-time work for retired physicians

Yet again, this is like putting a band-aid on a bullet wound. Raising the retirement age is not a long term solution. 

The Verdict

There are just too many things to take into consideration when it comes to raising the retirement age and not enough data to back them up.

The benefits really only seem to stand for the more affluent amongst us, and not the general populace. It might help Social Security to ease up and distribute finances accordingly, but it also hurts those that have jobs with very physical demands or happen to have illnesses that limit their movement.

But the scarier truth? They won’t stop just at raising the retirement age. Nobody is even considering Medicare and its median age range, which is also being hotly debated.

In the end, while some of the issues like a longer life expectancy makes sense, the proposed solution itself is not actually dealing with that problem. Instead, it ends up feeling like you’re getting the shorter end of the stick, either way.

So much for an ‘early retirement with the family’, right folks? We’ll just have to see.

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