‘They should plan on their retirement age being increased’: Nikki Haley said at the recent GOP debate that she wants to raise the retirement age above 67 — should you be worried?
The first Republican presidential primary debate of 2024 showcased a stark divide between Donald Trump’s challengers: Social Security.
Former governor of South Carolina Nikki Haley has maintained throughout her campaign that she’s open to raising the retirement age for younger people.
Don’t miss
Commercial real estate has outperformed the S&P 500 over 25 years. Here's how to diversify your portfolio without the headache of being a landlord
Rich young Americans have lost confidence in the stock market — and are betting on these 3 assets instead. Get in now for strong long-term tailwinds
Take control of your finances in 2024: 5 money moves to start the new year off strong
In the Jan. 10 debate, moderator Jake Tapper asked Haley point-blank if people in their 20s should expect to work into their 70s.
“They should plan on their retirement age being increased, yes,” Haley said.
Haley’s opponent, Florida Gov. Ron DeSantis, vehemently disagreed with her on raising the retirement age, pointing out that retirees have been paying into Social Security their whole lives and deserve to receive it.
“It’s not a welfare program, you’re being taxed for this your whole life,” he said.
What’s behind Haley’s and DeSantis’ views on Social Security? And should you be worried if either receives the GOP nomination?
Why does Haley want to raise the retirement age?
Haley assured current and soon-to-be-retirees that they will receive their full Social Security entitlement at the current retirement age of 67. But she remained vague during the debate about the exact age she would increase it to.
“We want to make sure that everybody who was promised, gets it,” she said. “But we also want to make sure our kids have something when they get it too.”
Haley’s statements come in light of the fact that Social Security may not be able to hand out full entitlements in the near future. According to this year’s Social Security and Medicare Trustees Reports, the fund supporting Social Security will, at current funding levels, only be able to pay 100% of “scheduled benefits until 2033.” After that, the funds will become “depleted” and older Americans would only receive 77% of their total scheduled benefits.
DeSantis’ take
One big reason why DeSantis doesn’t agree with Haley about raising the retirement age is life expectancy. Haley insists that life expectancy is increasing, so raising the retirement age just makes sense. But DeSantis says that this isn’t true: life expectancy has decreased in the past five years.
“I will never raise the retirement age in the face of declining life expectancy,” DeSantis said in the debate. “That hurts blue collar folks. You get taxed your entire life, life expectancy’s down, you may not even be recouping very many benefits.”
Both are right — to an extent. Longer life spans tend to belong to rich Americans, such as Haley and DeSantis. Poorer Americans don’t tend to see the same life expectancy increases as wealthier Americans, according to a 2021 paper from the Congressional Research Service.
Read more: Millions of Americans are in massive debt in the face of rising rates. Here's how to take a break from debt this month
But something needs to be done
Haley isn’t wrong to raise the alarm bells over Social Security’s impending insolvency. And even current benefits often aren’t enough for many seniors to live on.
But some commentators have other ideas for improving Social Security’s fiscal position. Nobel Memorial Prize-winning economist Paul Krugman wrote in a recent New York Times column that the best way to increase Social Security funds is to do what the majority of GOP candidates refuse to do: raise taxes.
The U.S. has one of the lowest tax revenue rates in the world, according to the OECD. Higher taxes are the way that countries like Canada or Denmark provide more health care and financial support for retirees. You may not like higher taxes, but it could help out with your retirement savings long-term.
In the meantime, the best thing you can do is make sure that you have enough money in the bank to fund your own retirement.
What to read next
This Pennsylvania trio bought a $100K abandoned school and turned it into a 31-unit apartment building — how to invest in real estate without all the heavy lifting
Jeff Bezos and Oprah Winfrey invest in this asset to keep their wealth safe — you may want to do the same in 2024
The US dollar has lost 87% of its purchasing power since 1971: Learn how to diversify your portfolio by investing in the world’s most popular precious metal
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
