Extending retirement age falls heavily on sore backs

After nearly 36 years in construction, installing and servicing elevators, 58-year-old Steve Trebesch of Champlin has come to a grim conclusion. He won't be able to continue working much longer. "My body is shot, knees are bad, shoulder not good, plus a bad back," he said.

Trebesch and his co-workers often talk among themselves about the physical toll they pay after years of hefting the heavy equipment, cables and tools of their trade, sometimes hiking up flights of stairs when elevators are out of service.

Most of his co-workers, Trebesch says, plan to retire as soon as they become eligible for Social Security benefits at age 62, even though they are aware that waiting until their full retirement age of 66 would boost their monthly benefits nearly one-third higher. "I can tell you no one in our trade works past 62 and a lot of us don't live long or well."

Trebesch said that he likely will not even make it to 62, instead retiring in a couple of years when he reaches age 60. He intends to get his knees fixed and "recuperate." He will rely on his 401K savings and union pension to fill the gap until Social Security kicks in.

It's not just the sore back and aching knees that come into the equation. Working to full retirement age, he said, is "not worth the risk of your health." Trebesch said he and his older co-workers recognize that their reflexes are not as quick as they used to be in a job where one misstep can be disastrous. "If you make a wrong decision, that'll cost you your life," he observed.

As life expectancy grows, pushing out the age of eligibility for retirement benefits is often mentioned as one way to help close the fiscal gap in Social Security finances. And in this election year, "entitlement reform" (i.e., Social Security and Medicare finances) is getting plenty of attention. Trebesch opposes extending the retirement age. Pushing it out would force younger workers starting in the elevator trades today to pay for benefits they would "never be able to collect," he said. Eliminating waste and raising the wage limit on Social Security taxes would be a better way to fix the system's finances, he argues.

Trebesch contacted me after he read my recent column on what constitutes a "fair" retirement age. I had written about different potential economic outcomes that would be experienced by retirees based on their education and economic status when extending the retirement age. The situation of Trebesch and his co-workers illustrates a different dimension to that policy dilemma. Some workers have concluded that staying in the workforce, even to the current full retirement age, is not a realistic option.

One thing that is rarely discussed about Social Security is that the retirement benefits are designed to be "actuarially neutral," which means that it should not make an economic difference when a person decides to begin receiving benefits. But extending the retirement age across the board would change the outcome. After all, the goal is to save money.

Phyllis Moen, sociology professor at the University of Minnesota, has interviewed older workers to determine what factors enter into their thinking about when they retire. She found that it's not just the physical wear and tear from manual labor that causes people to retire early. Escaping the emotional toll of stressful work situations, providing care for an aging relative and being caught in corporate downsizings all force people to retire earlier than they otherwise might, she said.

Today, most workers are faced with only two options, full-time employment or full-time retirement, she said. "The idea of delaying the age of retirement is absolutely, totally wrong," Moen argued. "It's a stick approach rather than a carrot approach. We just have to realize that because people are living longer does not mean simply postponing what comes next. … Most people don't want to keep working in a career job [until full retirement age]. Lots of people wish they could do something else less stressful."

Instead, she advocates increased employer flexibility and policy options such as greater availability of phased retirement and prorated benefits for part-time or seasonal employment. Such moves, Moen argues, would make it easier for older workers to embark on an "encore career." Social Security finances would benefit as older workers voluntarily remain in the workforce, continue to pay taxes and stay physically, mentally and emotionally engaged, which she argues would also keep them healthier and lower Medicare expenditures.