GAO Report: Keep Workers Working

The Government Accountability Office says more Americans need to work longer to live well in retirement, the Post-Herald of Syracuse reports.   “We, along with the others, have suggested that increasing labor force participation for older workers could lessen problems for the economy and Social Security and Medicare trust funds, and boost income security for retirees as well,” the July report reads.   The report, commissioned by Congress, offers suggestions for policy changes in the Social Security, healthcare and tax systems to encourage workers to retire later. The report adds to the chorus of those who would like the federal government to increase the minimum age at which individuals can claim Social Security, which is now 62. Since that age was set, life expectancies have risen, and work itself has gotten less physically taxing. Those who retire at 65 can apply for full benefits, including Medicare health benefits.   Yet, 46% of workers retire before age 63, according to a study by the University of Michigan cited in the report.   For those born after 1960 the magic number should be 67, according to the report. Those who work until age 70 should get a premium.   Another policy area the report says should get greater attention is tax policy. People can begin to withdraw money without any penalties from their Individual Retirement Accounts at age 59 ½. The later that option is penalty free, the longer people are likely to stay in the workforce, contributing to Medicare and Social Security as they go, the report notes.   “It’s not that the government doesn’t want you to retire; it’s that it can’t afford to pay the benefits to people,” said Mitch Franklin, an assistant professor of accounting at Syracuse University. “It all goes down to being able to find people in retirement,” Franklin said.   The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.