“The sooner policymakers act, the more options they will have,” Thomas Terry, vice president of the Washington-based academy and chairman of its Pension Practice Council, said at a press conference Monday, August 4.
He is also chief executive of JPMorgan Compensation and Benefit Strategies, a unit of JPMorgan Chase & Co. of New York.
Tax increases could be phased in more gradually, and reductions in benefit growth could be spread across a much larger population, Terry said.
The academy suggested three proposals for increasing the retirement age.
In one plan, the age at which full benefits could be received would be raised to 67 for all workers born in 1949 or later, which would reduce the expected deficit by 10 percent.
The second plan would increase the full-benefits age to 67 and increase it by a month every two years until it hit 70, thus eliminating 35 percent of the expected long-range deficit.
The third option would increase the schedule for full benefits by two months every year until age 70, eliminating half of the long-range deficit, the academy said.
The system is expected to have cash flow problems beginning in 2017, and the Social Security trust fund will be exhausted by 2041 at the current rate, the academy said.