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Old 04-02-2008, 11:41 AM   #21
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Although I do think the "easing the burden" statement is poorly worded, I don't interpret it as only meaning lowering lifetime benefits. As I said with the examples in my post above, by working longer and contributing more to SS the net effect will reduce the strain on SS funding. I define that as also "easing the burden".

I'm open to seeing the error of my thinking, so what's wrong with my example?
I think we agree that the wording is poor. I took it to mean "gets less benefit over time", you took it to mean "gets the same benefit but pays less taxes". Your interpretation makes it reasonably correct. I'm guessing that a lot of people reading the article think that starting SS after 62 reduces their expected lifetime benefit, so I inferred that interpretation. I suggested better wording.

In your example, you have the individual dying at 75, and a benefit that seems to be either $19,231 for 13 years or $31,250 for 8 years.
I didn't see where the numbers came from and didn't want to get bogged down in the assumptions because I thought that growing_older made the key point without an example.

I still think that the Medicare reference is weak for most of the people in the story. An the "rely less" phrase is really strange.
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Old 04-02-2008, 12:20 PM   #22
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It would seem to me that even if the draw is the same in terms of average payout over a lifetime, continued payments into the system by those delaying retirement does increase SS funding.

For example, say the total SS draw over the lifetime of someone who retires at 62 and dies at age 75 is $250,000. Their contribution to SS during this time is $0. If that same person worked to age 67 at a job paying $100k and died at age 75, they would receive the same $250,000 in benefits under our assumption. But by working 5 more years they (and their employer) would have contributed approximately $75,000 to SS. The net cost to the SS system for the later retiree is $175k vs $250k for the earlier retiree.

I think the same principle would apply to Medicare funds as well.

Of course if you believe that by working longer someone will live longer, this example doesn't hold water. Personally, I'm not from that school of thinking.
The assumption inherent here is that an extra job is created merely by wanting to work which I don't think is a valid assumption. By retiring early one could equally argue that the early retiree is helping aid state unemployement insurance payments by allowing a job to be filled by someone seeking work presently unemployed.
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Old 04-02-2008, 12:21 PM   #23
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I don't get the medicare reference. Many of the people in the article are in their 50's. If they defer retirement for 5 years, that will have no impact on medicare.

I think the point here is that deferring retirement, regardless of age, will have them continuing to pay Medicare taxes into the system. This doesn't ease benefit payouts, but does increase program revenues.
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Old 04-02-2008, 01:10 PM   #24
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I'm open to seeing the error of my thinking, so what's wrong with my example?
Nothing. You are correct. But you would have more authority if you took off that funny helmet.

Ha
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Old 04-02-2008, 01:15 PM   #25
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After re-reading the WSJ article, I think the author missed a couple of big points by a couple of miles:

Minter/Barman couple ( spreadsheet guy) is just not psychologically ready for retirement. Doesn't mention that he had any particular goals or activites that weren't fulfilled. It sounds as if his retirement activities became sitting in front of CNBC or the computer watching his money drain away. Not well advised for anyone, far less a prior 6-figure earner with time on his hands.

He didn't really have activities planned. It sounds like he is having major adjustment problems, the kind that go with changing from a high-earning SF guy to a guy wandering around Healdsburg. It sounds like he is truly depressed, and this could easily have been predicted. Retirement is as much a stress as unanticipated job loss or family death. He may have had a great spreadsheet, but he really needed a counselor. All the number tweaking in the world won't help if you don't really understand what motivates you in life, and how that is going to work when you suddenly don't have that successful working guy image of yourself. He also need to get a library card and start reading Bernstein, Bogle, and Ferraris books on low-cost investing and asset allocation.

She, on the other hand, seems to have something satisfactory to replace her Chanel suit- convertible Lexus life.

I'd also like to point out that these people are not in financial trouble because of their early retirement. They may not have all the perks their spreadsheet gave them, but they are not in financial trouble.
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Old 04-02-2008, 01:23 PM   #26
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Nothing. You are correct. But you would have more authority if you took off that funny helmet.
A German officer never removes his headgear while outdoors!
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Old 04-02-2008, 01:29 PM   #27
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Now the Greenspans- What I can't get over is the $400,000 boat.

Is there anything in the world that depreciates faster than a real expensive new boat?

Pure lead can't drop any faster.

There is nothing that a $400,000 boat can do that a used $80,000 boat can't do. Bet there are some amazing boat bargains in Florida right now. ....That is, if you know anything about boats.

They invested $800K, expecting to make $1000K (the condo full price) plus $400K for the boat in two years?

Let me rephrase this: They invested $800K expecting to make $600K profit in two years? They must have to beat every shyster with a gimmick from their door.

Cancelling the boat sale and losing the $15,000 deposit might be the best business deal they've ever made.
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Old 04-02-2008, 01:29 PM   #28
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Minter/Barman couple ( spreadsheet guy) is just not psychologically ready for retirement. Doesn't mention that he had any particular goals or activites that weren't fulfilled. It sounds as if his retirement activities became sitting in front of CNBC or the computer watching his money drain away. Not well advised for anyone, far less a prior 6-figure earner with time on his hands.

He didn't really have activities planned. It sounds like he is having major adjustment problems, the kind that go with changing from a high-earning SF guy to a guy wandering around Healdsburg. It sounds like he is truly depressed, and this could easily have been predicted. Retirement is as much a stress as unanticipated job loss or family death. He may have had a great spreadsheet, but he really needed a counselor. All the number tweaking in the world won't help if you don't really understand what motivates you in life, and how that is going to work when you suddenly don't have that successful working guy image of yourself. He also need to get a library card and start reading Bernstein, Bogle, and Ferraris books on low-cost investing and asset allocation.
So is retirement more fulfilling if one was merely a cube dweller, a small cog in a large wheel?
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Old 04-02-2008, 01:30 PM   #29
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Oh, but they didn't do it. They just keep looking for a big shiny new drain to pour money down.
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Old 04-02-2008, 03:54 PM   #30
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So is retirement more fulfilling if one was merely a cube dweller, a small cog in a large wheel?



I suspect that retirement would be more fulfilling for those who feel beaten down by their job, than it would be for those who derive a feeling of self worth from their job.
-- If the cube dweller feels like s/he is an EXCELLENT cube dweller upon whom the very future of the organization doubtlessly depends, retirement might be pretty tough.
-- If the cube dweller feels beaten down, like s/he is accomplishing nothing and not respected by coworkers, retirement might be easy.
The same would be true for managers.
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Old 04-02-2008, 04:10 PM   #31
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I am getting all choked up thinking about that couple that can't afford to buy a brand new $400,000 boat. How sad. This economy really sucks!
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Old 04-02-2008, 05:36 PM   #32
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I take the WSJ and have for more the 30 years. Sometimes I wonder if it's worth it. That article wasn't very incisive.
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Old 04-02-2008, 05:54 PM   #33
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I take the WSJ and have for more the 30 years. Sometimes I wonder if it's worth it. That article wasn't very incisive.
That's the problem with getting old: You know too much, you have too much experience, and nothing is incisive anymore.
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Old 04-02-2008, 06:01 PM   #34
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I like reading those kinds of WSJ articles. They keep reminding me about the basic principles of low-cost, safe investing, and keeping a reasonable perspective on it all.

*someone please shoot me if I gamble my retirement savings away on a $400K boat*
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Old 04-02-2008, 06:02 PM   #35
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That's the problem with getting old: You know too much, you have too much experience, and nothing is incisive anymore.
LOL, since you put it like that I kind of like getting old ! Thanks. Just past my 60th a few days ago. Don't qualify for senior status yet.
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Old 04-02-2008, 06:05 PM   #36
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Just past my 60th a few days ago. Don't qualify for senior status yet.
I think you're quibbling...

REW, age 61
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Old 04-03-2008, 08:46 AM   #37
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I think the point here is that deferring retirement, regardless of age, will have them continuing to pay Medicare taxes into the system. This doesn't ease benefit payouts, but does increase program revenues.
You are correct. I overlooked the same idea again. I can blame the first time on the author's wording, but I should have quit after that.

REWahoo is probably just shaking his head.
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Old 04-03-2008, 09:12 AM   #38
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I think you're quibbling...

REW, age 61
"I rock em and roll em all night long,
I'm a 60 minute man".

Haven't hit the high water mark of 4 hours yet.
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Old 04-03-2008, 10:38 AM   #39
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Of course at 4 hours you need to call the Doctor, right?
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