Wednesday, August 6, 2008

Actuaries on Social Security

My occupation is as an actuary. For those who aren't sure what that is, you can check here. In brief, actuaries are the people who run the numbers for insurance systems. Social Security is very similar to an insurance system and many actuaries are employed by the Social Security Administration.

On Monday, the American Academy of Actuaries, of which I am a member, released a report outlining their suggestions for fixing social security in the WSJ. In my experience actuaries tend not to be ardently in favor of free markets for reasons that I do not fully understand. Given that they still came out in favor of decreasing Social Security payments.

I agree with almost all of their reasoning, but I am still somewhat skeptical of moving up the retirement age as an equitable solution as I have said before here.

Some quotes that I thought were good:

"We think that if you dig in and make these changes now ... it gives people time to plan," said Tom Terry, the organization's vice president for pension issues. "It gives people time to anticipate that now I'm age 35, I'm looking at an age 68 or 69 retirement for Social Security, and that gives you a lot of years to plan for it."

"If we delay and wait, we're more likely as a nation to have to sort of jolt the system much more potently and hurt a lot more people unexpectedly,"

I would prefer a straight cut on everyone's benefits below a certain age, but making cuts of some kind, which raising the retirement age does, are necessary.

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