http://www.bc.edu/centers/crr/facts/jtf_11.pdf

How Can the Actuarial Reduction for Social Security Early Retirement Be Right?
Natalia A. Jivan, July 2004
JTF# 11

***Begin Quote***

Traditionally Social Security’s Normal Retirement Age has been 65, but for the last 45 years both men and women have had the option to claim benefits at the Early Eligibility Age (EEA) of 62. In exchange for claiming early, individuals receive a smaller monthly benefit. The legislation that established the EEA reduced benefits by 5/9 of 1 percent for each month before age 65, so that a person claiming at age 62 would face a 20 percent [(5/9)*36] reduction. This publication explains the factor of 5/9 and why it has remained constant since the establishment of the EEA.

***End Quote***

Now we know the gubamint has a motivation to have a low inflation rate. It keeps the SSI COLA low. That means that it artificially makes a sick system look healthier.

It’s also, like inflation, a hidden tax on the fixed income elderly.

So if they haven’t reexamined the discount rate in light of interest rates, then we have discovered another proverbial “thumb” on the “butcher’s scale” when servicing the old people’s “guaranteed” program.

As I always say, if insurance company executives did what the gubamint as the social security administration does, then they’d all be in jail faster than the Road Runner.

<beep beep>

I does make you wonder how to play the “62.5” versus “65” versus the “full retirement age” versus the “wait til your older and hope you don’t get hit by a bus”?

Beats me!?!