This column discusses an interesting idea designed to encourage workers to keep working longer toward their normal retirement date so that they don't draw Social Security benefits so early. Basically the idea is to vest a worker's Social Security benefit when he/she reaches age 55.
"Before you assume this would be a government subsidy or an employer-borne handout, the idea was simply to eliminate Social Security payroll taxes starting when workers are 55 years old. As a result, take-home pay would jump 10.6%, and the average worker would stay on the job 1.5 years longer. During that time, they would continue paying income taxes, their only break would be on the payroll tariff.
Moreover, the way the change would be paid for is by raising payroll taxes slightly for workers who are younger and nowhere near retirement."
How do you arrive at an estimate that the average worker will delay retirement 1.5 years? And how much more would younger workers be required to pay in Social Security taxes? As with all such proposals there are some questions. But this should at least be the subject of serious discussion in Congress.
I think the concept of vesting Social Security at age 55 is very intriguing although it won't do me very much good since I passed that milestone years ago. But anything that might put Social Security on a more sound footing deserves serious consideration.
For a better retirement, work longer - Chuck Jaffe - MarketWatch