Raising the retirement age also raises disability applications, so this won't save as much money as many people think, and could even make things worse if the early retirement age is changed (the early retirement age is currently 62):
Raise Retirement Age and More Become Disabled, by Merrill Goozner: Most people are working and living longer, so it seems like a no-brainer to raise the retirement age to help close the long-term Social Security funding gap. But the move could backfire and not save as much as predicted. Why? Not all groups are able to work longer, a new report from the Government Accountability Office says.
“Raising the retirement ages would likely increase the number of workers applying for and receiving disability insurance benefits,” which also comes out of Social Security, said the report...
The report presented a sobering view of the health status of near-retirement age population. About a quarter of Americans aged 60-61 have a work-limiting health conditions, according to the report, and about two-thirds the ones who are still on the job report working in occupations that are “physically demanding.” Raising either the early or full retirement ages above where they are now would incentivize many more of those workers to seek disability coverage...
The report took a snapshot of those on the cusp of retirement, and found those reporting good or excellent health were twice as likely to have some college education, twice as likely to be working full-time, had twice the income and four times the wealth of those reporting poor or fair health. In other words, people who are the most dependent on Social Security for retirement income are the ones most likely to go on disability if denied early retirement benefits.
While raising the full retirement age would still save the system money, “raising the early retirement age would have a negative impact on (Social Security) solvency because disability costs would rise and expected total lifetime retirement benefits would not change,” the report concluded.
I'd prefer that we raise or eliminate the cap on Social Security taxes.