Working Longer Won’t Save Social Security

Moody’s finally joined the club of fiscal doom, joining the other major ratings agencies in signaling what many of us already knew: the United States has a debt problem. And with the House of Representatives moving forward on President Trump’s “Big Beautiful Bill”—a sweeping package of tax cuts, deregulation, and investment incentives—the conversation in Washington has returned to fiscal sustainability.

Cue the usual suspects. The loudest warnings aren’t about defense spending or corporate subsidies or the rising cost of interest payments. They’re about Social Security. And once again, we’re told the solution is simple: Americans need to retire later.

That’s the pitch from Bloomberg’s Allison Schrager, who argues that our real problem isn’t spending per se—it’s that too many Americans stop working too soon. Push back the early retirement age from 62 to 65, she says, and we can narrow the solvency gap and ease the pressure on the trust fund.

It sounds plausible but it’s wrong.

The Problem Isn’t When People Retire. It’s What They Produce.

Social Security isn’t like other government programs. It’s not paid for out of general revenue or funded by debt. It’s a transfer system—today’s workers support today’s retirees. That means what really matters isn’t the age at which people retire but whether the people still working can produce enough to support them.

Money is a distraction here. It’s helpful to look past the transfer of dollars to think of it as a transfer of consumption power. We reduce the buying power of current workers through payroll taxes, and increase the buying power of retirees through benefit payments.

If the American economy is productive enough, we can support early retirees. If it’s not, making people work until they drop won’t save us.

That’s why obsessing over the “solvency” of the trust fund is a distraction. You could double the retirement age and still run into trouble if productivity growth stalls or if those working late in life are not productive enough. You could also afford generous benefits at 60 if the workforce is producing enough output per person. The accounting isn’t the issue. The real variable is real-world economic strength.

Late-Life Work Doesn’t Move the Needle

Even if you could convince millions of Americans to work longer, the result would be underwhelming. Most people who retire at 62 aren’t sipping daiquiris in Naples when they could be adding a lot of goods and services to the economy—they’re people who lost their jobs, face declining health, or work in industries that don’t want older employees. For many workers, the industry they’ve spent their life in and the professions they’ve grown skilled in are shrinking. And the jobs older workers can get tend to be low-wage, low-productivity, and often part-time. Adding a few more years of that kind of work doesn’t fundamentally change the national output.

So, the promise of a stronger fiscal outlook via delayed retirement is mostly an illusion. At best, you get marginal labor at marginal wages. At worst, you’re just cutting lifetime benefits for people who can least afford it. You are basically trying to solve the problem by forcing retirees to consume less, to live lower quality lives.

What Really Solves the Problem: Growth and Babies

There are only two ways to make Social Security truly sustainable.

First, drive faster productivity growth. That means reindustrializing the U.S. economy, bringing supply chains home, investing in infrastructure and energy, and lifting real wages. If each worker produces more, the system works—even with earlier retirement.

Second, and even more important, rebuild our demographic base. The long-term challenge isn’t just fiscal. It’s civilizational. America is aging because too few young people are getting married and having children. We need a national strategy to support family formation—pro-natalist policies that make it easier to start a family at a younger age, buy a home, and raise kids in stable communities.

This is not utopian. It’s arithmetic. A country with rising productivity and a growing population can afford to take care of its retirees. A country with stagnant output and collapsing fertility cannot.

The Technocrats Keep Missing the Point

The reason Schrager’s proposal keeps coming back—like Paul Ryan’s old chart about “working longer”—is because it flatters the technocrat’s instinct. It sounds like a structural fix. It targets a big line item. It even comes with a chart.

But it’s the wrong answer to the right question. We don’t need to fiddle with the retirement age. We need to build an economy that can actually support the promises we’ve already made.

Let’s stop pretending we can balance the books by asking warehouse workers to clock in until 70. Let’s get serious about what it takes to sustain a nation.