AIG Chief says retirement age may move to 80

[WestLake]

http://bloomberg.com/news/2012-06-03/aig-chief-sees-retirement-age-as-high-as-80-after-crisis.htm

l“Retirement ages will have to move to 70, 80 years old,” Benmosche, who turned 68 last week, said during a weekend interview at his seaside villa in Dubrovnik, Croatia. “That would make pensions, medical services more affordable. They will keep people working longer and will take that burden off of the youth.”

 

[donheff]

Those AIG folks always get things right.

 

[Brett_Cameron]

This link may work better: AIG Chief Sees Retirement Age as High as 80 After Crisis - Bloomberg

 

[teejayevans]

This idea seems to be going around, some others:
Retirement: Financial security for the long road ahead - Jun. 4, 2012

SS isn't in that bad of shape, just raising the full retirement age to 70 for those 40 or younger would do it, like they did before, it could be prorated. Now medicare....
TJ

 

[Chuckanut]

And, of course, all corporations and government institutions will fully support a higher retirement age by rigorously forbidding age discrimination and quickly and forcefully punishing those who practice it.

Oh, one other thing - American companies will start providing decent vacation benefits like other countries do - 4-6 weeks a year.

 

[rescueme]

Let's just move it to age 110 and all our financial worries will be gone (along with us) ...

 

[rescueme]

Oh, one other thing - American companies will start providing decent vacation benefits like other countries do - 4-6 weeks a year.

DW/me had six weeks. Isn't that normal after so many years?

Oh wait, we both worked (in the U.S.) for foreign owned companies ...

OTOH, we had to take care of our own retirement financial concerns, since most foreign companies don't have to worry about "retirement benefits". They are supplied via a government scheme...

 

[Midpack]

SS isn't in that bad of shape, just raising the full retirement age to 70 for those 40 or younger would do it, like they did before, it could be prorated. Now medicare...

+1

 

[Independent]

This idea seems to be going around, some others:
Retirement: Financial security for the long road ahead - Jun. 4, 2012

SS isn't in that bad of shape, just raising the full retirement age to 70 for those 40 or younger would do it, like they did before, it could be prorated. Now medicare....
TJ

That helps a lot, but I don't think it closes the whole gap.
See Option C2.5 here: Long Range Solvency Provisions,
which also includes indexing the retirement age for younger people.

 

[Mulligan]

Those AIG folks always get things right.

Well he looked comfortable in his white shirt and tie being interviewed at a villa. He is just a young pup at 68 himself. Why dont he take his white shirt and tie off and put some jeans, work boots, and tshirt on a go roof a couple houses or pour some concrete driveways. He could surely do it 12 years to age 80 no problem!

 

[ziggy29]

They will keep people working longer and will take that burden off of the youth.”

Yes, and the "new" burden of youth (and of the elderly) will be in terms of trying to find jobs. We don't have enough jobs for those who already need them; age discrimination and physical decline aside, how is the job market supposed to absorb all the people aged 65-70 (or even 65-80!) forced back into the labor pool?

If you think 20-something unemployment is high because Boomers can't retire in the "new economy", you ain't seen nothing yet if they do something like this. So maybe increasing the retirement age will take "burden" off of youth... assuming those youth can find a job AT ALL.

 

[Midpack]

Yes, and the "new" burden of youth (and of the elderly) will be in terms of trying to find jobs. We don't have enough jobs for those who already need them; age discrimination and physical decline aside, how is the job market supposed to absorb all the people aged 65-70 (or even 65-80!) forced back into the labor pool?

Thanks for reminding me to check out something I heard on the news last night - they said there are 3.5 million jobs open right now in the US that can't be filled because applicants don't have the necessary skills/education. If it's true it might help "the elderly" with matching skills who want/need good jobs. However, there seems to be some debate as to the cause, skills gap, or other reasons. I found articles supporting both POVs.

If you’re out of work and hungry for a paycheck, the news from the government on March 13 sounded almost too good to be true: Employers have literally millions of jobs going unfilled. To be precise, there were 3.5 million job openings in the U.S. as of the last business day in January, the U.S. Bureau of Labor Statistics said. That was an increase of 45 percent since the depth of the recession in 2009.

The news is accurate, but it’s not entirely a good thing. There’s a reason those jobs aren’t being filled. In fact, it’s a sign of ill health in the job market that employers can’t seem to find the people they need, even as 12.8 million Americans are officially searching for work. (That’s the February number.) Typically, one would expect to see this many openings only if the unemployment rate were down between 5.5 percent and 6 percent, economist Ian Shepherdson of High Frequency Economics in Valhalla, N.Y., said in a March 16 research note.

Why 3.5 Million Job Openings Isn't Great News - Businessweek

 

[Dawg52]

Let's just move it to age 110 and all our financial worries will be gone (along with us) ...

I thought the same thing when I saw the report on the news. But some fool will probably make it to 110 so we might as well push it to 150 and be done with it.

 

[Midpack]

No surprise to anyone here I know...

IIRC FRA has been from 65 to 67 since Soc Sec has been in place and early eligibility didn't begin for women until 1956 and men in 1961. The structural challenges are undeniable...

 

[ziggy29]

Thanks for reminding me to check out something I heard on the news last night - they said there are 3.5 million jobs open right now in the US that can't be filled because applicants don't have the necessary skills/education. If it's true it might help "the elderly" with matching skills who want/need good jobs. However, there seems to be some debate as to the cause, skills gap, or other reasons. I found articles supporting both POVs.

Except that many of the job seekers can't afford the training, taxpayers are increasingly resistant to subsidizing others and employers are cheap enough to know that while they have all the leverage, they aren't expected to provide the "on the job training" of decades past. It costs them money and non-productive time on the payroll. It's an expense they refuse to "eat" any more. In other words, it's not a new problem. It's just that employers used to provide OJT for the right candidates, and now they almost entirely refuse.

 

[jclarksnakes]

This skills gap has been building for years. We live in a rapidly changing world. People who do not update their education to keep up with the changes are making a big mistake. If someone is unemployed and has not been in school learning new skills during the last decade I have trouble feeling sorry for them.

 

[BigNick]

And, of course, all corporations and government institutions will fully support a higher retirement age by rigorously forbidding age discrimination and quickly and forcefully punishing those who practice it.

A possibly pertinent quote from that comments below the article:

With health insurance costs out of control to begin with, being over 55 may cost an employer twice as much to hire you over a 20 something.

Assuming that's true, it would be a big factor. That said, in Europe, where whatever employers pay for health care is typically not a function of the age of the individual employee, over-50s probably have at least as hard a time getting a "proper" job.

 

[Independent]

Thanks for reminding me to check out something I heard on the news last night - they said there are 3.5 million jobs open right now in the US that can't be filled because applicants don't have the necessary skills/education. If it's true it might help "the elderly" with matching skills who want/need good jobs. However, there seems to be some debate as to the cause, skills gap, or other reasons. I found articles supporting both POVs.

Why 3.5 Million Job Openings Isn't Great News - Businessweek

I'd say the total number of job openings is 3.5 million. My guess is that most of those jobs have plenty of qualified applicants, employers just haven't pulled the trigger on exactly who to hire yet. That's the normal friction in the labor market.

The BLS report is here: http://bls.gov/web/jolts/jlt_labstatgraphs.pdf
It has handy graphs of numbers and ratios.

It looks like the number of openings varied between 3 and 4 million from 2002-2007. It dropped to 2 million by May 2009, and has been growing slowly since then. So 3.5 million openings was typical before the Great Recession.

As employment creeps back up, the number of job openings is higher than it was for similar unemployment rates when things were getting worse.

I don't know if anyone can prove that's related to some new skills gap, or a feeling among employers that they can look longer and get the perfect person for the job, or a reflection of some industries coming back more quickly than others.

I haven't seen an openings/unemployed chart by specific skills. I would guess it would show the same winners as 5 years ago - health care, engineering, IT ...

 

[Independent]

No surprise to anyone here I know...

IIRC FRA has been from 65 to 67 since Soc Sec has been in place and early eligibility didn't begin for women until 1956 and men in 1961. The structural challenges are undeniable...

True. But remember the birth rate is a big deal, too. The WWII generation averaged 3 children per couple. The Boomers averaged 2. If nothing else had happened, the changing birth rate alone would lead to a 50% increase in the tax rate or a 33% decrease in benefits.

 

[Midpack]

Except that many of the job seekers can't afford the training, taxpayers are increasingly resistant to subsidizing others and employers are cheap enough to know that while they have all the leverage, they aren't expected to provide the "on the job training" of decades past. It costs them money and non-productive time on the payroll. It's an expense they refuse to "eat" any more. In other words, it's not a new problem. It's just that employers used to provide OJT for the right candidates, and now they almost entirely refuse.

Not disagreeing with this point on OJT. I was simply trying to add that seniors as a group might be more likely to have the skills than subsequent generations, and that those qualified seniors might have an advantage in a more applicants than jobs environment where a skills gap is the issue. It was meant as a small positive for seniors...

 

[Midpack]

True. But remember the birth rate is a big deal, too. The WWII generation averaged 3 children per couple. The Boomers averaged 2. If nothing else had happened, the changing birth rate alone would lead to a 50% increase in the tax rate or a 33% decrease in benefits.

True. But this graph (which we've all seen) includes change in birth rate and changes in longevity along with other influences. As you note, birth rate alone would have gradually cut number of workers per SS retiree by 33%. In fact the number of workers per SS retiree has dropped by well over 90% since 1945 (your WWII generation reference), and over 80% since 1950! Unless there's another huge factor I'm missing, it would seem the change in longevity without a commensurate change in FRA is the bigger factor. And no, I am certainly not suggesting they should move in lockstep, simply identifying what the big issue is, no easy answers to be sure...

 

[Chuckanut]

We all need to keep in mind that all those youngster will one day be 50, 60 and even 70 year olds. Growing older is not a choice for most of us (Logan's Run was science FICTION!).
A rational society will acknowledge the needs of all age groups keeping in mind that mosty of us will be members of each group as time goes by.

 

[traineeinvestor]

The comments also made interesting (if somewhat predictable reading). He is only one of many who have pointed out the fiscal necessity of either making people wait for state backed retirement and other payments or reducing the real value of those payments - at the moment the countries which are doing anything about the issue at all are generally doing a (very) little of both.

The message - unles you want to keep working until 70 or beyond and are confident that you will still be able to find and perform acceptable work at that age, then saving lots and investing sensibly is the only realistic chance most people will have to retire while they are still young enough to enjoy it.

 

[Independent]

True. But this graph (which we've all seen) includes change in birth rate and changes in longevity along with other influences. As you note, birth rate alone would have gradually cut number of workers per SS retiree by 33%. In fact the number of workers per SS retiree has dropped by well over 90% since 1945 (your WWII generation reference), and over 80% since 1950! Unless there's another huge factor I'm missing, it would seem the change in longevity without a commensurate change in FRA is the bigger factor. And no, I am certainly not suggesting they should move in lockstep, simply identifying what the big issue is, no easy answers to be sure...

The WWII generation reference was meant to apply to the time when the WWII generation was retired and they were being supported by their children.

Assume the WWII group was born in 1920-25, and dominated the retiree group when they were 75 in 1995-2000. If the early boomers were born 1946-1951, they will hit 75 in 2021-2026. That's extremely crude, but it's the time frames that I'm trying to compare. They're well to the right of the graph.

The big drops in the early years of SS weren't about demographics, they were about the way the system was rolled out. You had to pay taxes for at least 3 years before you were eligible for benefits. Suppose they start collecting taxes today on everyone 20-62. Three years later the leading edge retires. The ratio of workers to beneficiaries one year after the benefit start is (number of people 20-64)/(number of people exactly 65). The next year the denominator doubles to (number of people 66 or 65). In the early years the ratio is the sequence 45/1, 45/2, 45/3 etc, which gives the shape we see in the graph.

In practice, this effect stretched out longer than you'd think because SS initially covered about half the workers. Each time they added another category of workers, they got another layer of this type of curve.

I don't want to claim that the changing birth rate is the only factor in the changing worker/retiree ratio. Just that it is big enough to be considered as part of the problem.

 

[Texas Proud]

Well he looked comfortable in his white shirt and tie being interviewed at a villa. He is just a young pup at 68 himself. Why dont he take his white shirt and tie off and put some jeans, work boots, and tshirt on a go roof a couple houses or pour some concrete driveways. He could surely do it 12 years to age 80 no problem!

My granddad was doing blue collar work into his mid 80s... not exactly sure what he was doing at the time (he had MANY different jobs over his lifetime)... but my mom said that he made his assistant carry his tools up the stairs on the water tower.... will have to talk to her to get some more info on this as she had told me over 35 years ago.... he died when he was 98...