A Proposed Bill Could Let Certain Workers Receive Full Social Security at 60

Deciding when to file for Social Security is a key part of retirement planning for most Americans. Under current rules, benefits can begin at 62 at the earliest, and claiming that early is treated as an early filing that can reduce monthly payments by as much as 30%, depending on your full retirement age (FRA).

A new bill, though, would make a major change for some workers by allowing them to claim benefits years sooner without the steep reduction in monthly income that usually comes with filing before FRA.

Here’s what the proposal would change, who could benefit, and what happens next.

The proposal would lower the Social Security claiming age

The bill is called the Blue Collar Social Security Fairness Act.

It was introduced by Michigan Congresswoman Haley Stevens with the aim of making full Social Security benefits available earlier to workers in physically demanding occupations who may not be able to keep working until the traditional full retirement age.

For people born in 1960 or later, FRA is 67. Workers in physically strenuous jobs often have to leave the workforce before then, or else claim benefits at 62 and accept a much smaller monthly payment.

The proposal would change that by letting eligible workers claim their unreduced benefit starting at 60, which is seven years earlier than they would otherwise have to wait for full benefits.

Which workers could qualify at 60?

The legislation is aimed at people in manual labor jobs that require a significant amount of physical effort. Examples include:

• Construction workers
• Nurses
• Roofers
• Manufacturing workers

Under the bill, the Social Security Administration would be directed to create a list of physically demanding jobs covered by the law and to update that list every three years.

How much physically demanding work would be required?

Not every worker stays in a physically demanding job for an entire career, and the proposal accounts for that.

Workers would earn points based on how long they worked in a qualifying occupation:

• 0.5 points for each year worked from ages 18 to 34
• 1 point for each year worked from ages 35 to 44
• 1.5 points for each year worked from ages 45 to 54
• 2 points for each year worked at age 55 or older

A person would qualify for the earlier claiming age after earning 15 points or after spending 20 total years in a physically demanding job over the course of a career.

The proposal comes with major trade-offs

Stevens has made a forceful case for the measure, saying in a press release, “Michiganders who work with their hands shouldn't be forced to wait until their bodies give out to retire. If we want to honor the dignity of work in this country, we need to lower the retirement age for physical laborers.”

Because these workers face greater physical strain than most employees, supporters argue that giving them access to full benefits at a younger age is a fair response to the reality of their jobs.

At the same time, Social Security is already at risk of running short of money as early as 2032. Trustees have warned that the Old-Age and Survivors Insurance (OASI) trust fund is expected to run out by then, which would trigger an automatic 22% reduction in benefits unless lawmakers take action.

Expanding early benefits to potentially millions of workers would likely deepen that shortfall, possibly causing benefits to run out sooner for everyone and making the program’s funding problems even harder to solve.

Could the bill become law?

It remains unclear whether the measure can make it through Congress.

The bill has been introduced, but it would still need approval from both the House and Senate and the president’s signature to become law. Given how difficult Social Security reform has been to advance in the past, its prospects are uncertain.

Bottom line

Social Security is an important source of retirement income, but under current law, benefits are not available until at least 62, and full benefits do not arrive until 67.

If you work in a job that may force you to retire early, it is important to plan carefully for that financial reality. An early Social Security claim should not be assumed to be an option simply because a new proposal exists.

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