A millionaire is warning Americans that the Social Security retirement age could shift significantly as the social safety net program is set to run out of money—but the two financial experts who spoke with Newsweek were divided on the matter.
Today, Social Security benefits are available once you turn 62, but the full retirement age is considered between 66 and 67, depending on the year you were born.
However, as Social Security is predicted to become insolvent by the 2030s, millionaire Grant Cardone is telling others that seniors are likely to be forced to retire 10 years later than anticipated—roughly at the age of 73.
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However, Grant Cardone, a private equity fund manager and real estate investor, believes the age will likely increase significantly in the coming years.
"You're not going to retire at 63—it's probably going to be 10 years later," Cardone, a real estate investor and private equity fund manager, told GOBankingRates.
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Currently, seniors are predicted to only get full payments until roughly 2035, when the Social Security Administration will no longer have enough money for full payments. The funding crisis is likely as more Baby Boomers retire with too few younger workers keeping the system afloat.
Lawmakers have proposed several ideas to save Social Security, with lower payments or a later retirement age the most likely options.
According to Cardone, the latter is what Americans should prepare themselves for.
"The money is going to run out," Cardone said. "It's been a busted system my whole life. So if it can't support people in retirement, people need to keep working to earn money."
A later retirement age might make sense as Americans are statistically living longer, but many worry this will create a recipe for disaster for many people's planned golden years.
"We've got 10,000 people leaving the job force every single day right now," Cardone said. "Some of these people are 65, 66 years old. They're going to live until they're 91—not 84."
Drew Powers, the founder of Illinois-based Powers Financial Group, said while the exact age is up for debate, he believes the full retirement age will "absolutely" be pushed back.
"There have been warnings about the solvency of Social Security for decades," Powers told Newsweek. "As Americans live longer, healthier lives, they collect Social Security longer, and there is incredible pressure on the trust fund. While nobody will want to wait longer to collect, the even more unpopular choices are to increase taxes or decrease monthly benefits."
Still, others have their doubts that the federal government would be able to make this change without significant pushback.
"It's not happening, no matter how needed it may be to maintain the Social Security program long term," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek. "We've seen rioting in France and other countries in the last few years with an age increase in Social Security-like benefits that was far less than the jump to 73 in the United States proposed."
The public would be likely to react with anger and even violence if the retirement age increased significantly after so many years, Beene added, saying the changes to Social Security will need to be gradual.
"Even ticking up the age by one year could cause panic, so the strategy and implementation have to be well thought, explained, and issued in a way where taxpayers don't feel like they're being cheated out of benefits they've been paying into for years," Beene said.
For Americans who work physical jobs late into life, the change to the retirement age could cause serious problems as their bodies aren't able to keep up with the work—or lead to worse health outcomes.
"I believe incrementally raising the retirement age is one potential part of the solution, but nowhere near 73," Michael Ryan, a finance expert and the founder of michaelryanmoney.com, told Newsweek. "A more likely scenario is a gradual increase to 69 or 70 over several decades, combined with other measures like adjusting the payroll tax cap."
About the writer
Suzanne Blake is a Newsweek reporter based in New York. Her focus is reporting on consumer and social trends, spanning ... Read more
