The unintended consequences of Social Security reform

From Merrill Goozner at The Fiscal Times

Most people are working and living longer, so it seems like a no-brainer to raise the retirement age to help close the long-term Social Security funding gap. But the move could backfire and not save as much as predicted. Why? Not all groups are able to work longer, anew report from the Government Accountability Office says.

“Raising the retirement ages would likely increase the number of workers applying for and receiving disability insurance benefits,” which also comes out of Social Security, said the report, which was prepared for Sen. Herb Kohl (D-WI), chairman of the Select Committee on Aging.

The report presented a sobering view of the health status of near-retirement age population. About a quarter of Americans aged 60-61 have a work-limiting health condition, according to the report, and about two-thirds the ones who are still on the job report working in occupations that are “physically demanding.”