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What if nobody retires?
Old 12-06-2004, 10:46 AM   #1
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What if nobody retires?

http://moneycentral.msn.com/content/...7.asp?GT1=5851

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What if nobody retires?
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Some believe delayed retirement will fix Social Security and more. But the economy will bite back. The still-working life won't be easy.

By Jim Jubak

Lately, the idea of working longer and retiring later has become the financial planning equivalent of a free lunch.

You've heard this one from the politicians: If everyone delayed retiring for a couple of years, it would "fix" Social Security. And from the financial planners: Keep working if you haven't saved enough for a comfortable retirement.

However, every investor knows that most free lunches are largely baloney. And so it is with delayed retirement. The changes in the economy that would result if all the Americans between 55 and 64 decided to work for a few more years -- and the number of Americans in this age group will be 73% higher in 2020 than it was in 2000, according to the U.S. Census Bureau -- are so sweeping that no one planning their retirement should assume that the benefits of a delayed retirement today will be around in 2014 or 2024. In a market economy, we should expect the market to bite back by making adjustments to such details as pay, demand for jobs, prices of goods and services, and tax rates.
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Re: What if nobody retires?
Old 12-06-2004, 01:07 PM   #2
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Re: What if nobody retires?

I read the article, and he's not a flake.
Not sure there is anything new there, though, and the stocks to ride those trends sounds a bit far-fetched.

Basically my take-away on this is that there will be a lot of moaning and gnashing of teeth in about 20 years. Boomers being boomers, they'll get politiicans to give them what they want.

Tax-Free withdrawals from IRAs? More goodies paid for by our kids? Whatever it is, it will involve somebody else having to make sacrifices, not the spendthrifts themselves. That makes those of us with assets a target. Perhaps an assets tax will kick in by then, to once and for all, really 'tax the rich'. Or the tax benefits on Roths will be reversed, as in, "pay now, pay again later, after all you can afford it!"

Anyway you slice it, none of us is immune.

ESRBob

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Re: What if nobody retires?
Old 12-06-2004, 02:33 PM   #3
 
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Re: What if nobody retires?

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Boomers being boomers, they'll get politiicans to give them what they want.
What's this supposed to mean?

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Re: What if nobody retires?
Old 12-06-2004, 04:31 PM   #4
 
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Re: What if nobody retires?

Yeah, re. "boomers being boomers...................."
I don't get it either.

JG
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Re: What if nobody retires?
Old 12-06-2004, 05:47 PM   #5
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Re: What if nobody retires?

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...really 'tax the rich'...
Not likely with the Republicans in power. The Democrats seem to be self destructing, which means that the tax burden will fall on the middle class, and the poor will get cuts in benefits. The very rich will get further tax cuts on the theory that they are the most productive citizens, and allowing them to keep more of their capital will improve the economy. A rising tide lifts all boats and such.
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Re: What if nobody retires?
Old 12-06-2004, 07:15 PM   #6
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Re: What if nobody retires?

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What's this supposed to mean?
I should have said, "We'll get the politicians to give us what we want", but it means that we've always gotten whatever we wanted as a 'generation', from GI Joes to Hummers to McMansions, and a comfortable retirement for all is probably just another 'thing' on that list. *Question is, who's going to pay? *Boomers love debt -- a mortgage isn't enough -- it needs to be a cash-out refi with a backup HELOC on it, so my guess is that debt will be the answer to retirement finances, too. *Once the reverse mortgage is run through, then it will be on to debt somebody else pays back. *

That's as far as I got with this line of thought -- I hope it's wrong. *

In any case, I don't think it applies to people on this Board, who are not mainstream in matteres of retirement finance, or they'd still be working and living beyond their means.

Re: asset taxes, Florida has one now, ostensibly in lieu of a state income tax, with Jeb Bush the man in the driver's seat, so it is not out of the question that even Republicans could learn to love one at the national level, but I admit it isn't likely any time soon. *20 years down the road, though, who knows what will be politically possible.

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Re: What if nobody retires?
Old 12-07-2004, 04:21 AM   #7
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Re: What if nobody retires?

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Not likely with the Republicans in power. *The Democrats seem to be self destructing, which means that the tax burden will fall on the middle class, and the poor will get cuts in benefits. *The very rich will get further tax cuts on the theory that they are the most productive citizens, and allowing them to keep more of their capital will improve the economy. *A rising tide lifts all boats and such.
With all due respect, your statement re "tax burden falling on the middle class" isn't borne out by the data. According to the CBO, the top 20 % of income earners pay 80% of the national tax burden. Also, the recent tax cuts removed a signficant number of lower income Americans from the tax rolls. I do, however, agree completely with your statement regarding the implosion of the Democratic Party .
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Re: What if nobody retires?
Old 12-07-2004, 09:15 PM   #8
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Re: What if nobody retires?

Quote:

With all due respect, your statement re "tax burden falling on the middle class" isn't borne out by the data. *According to the CBO, the top 20 % of income earners pay 80% of the national tax burden. *Also, the recent tax cuts removed a signficant number of lower income Americans from the tax rolls. *I do, however, agree completely with your statement regarding the implosion of the Democratic Party . *
Regards,
Mark
From what I quickly found, the top 20% hold more than 80% of the total wealth, with the top 1% holding in excess of 40%... and since I didn't want to spend a TON of time searching, those numbers are from 1989 and 1992 respectively.... pretty old and out of date to be sure.

Sooo.... wouldn't it be fair that the top 20%, who hold 80%+ of the wealth, pay 80% of the taxes?
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Re: What if nobody retires?
Old 12-08-2004, 03:39 PM   #9
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Re: What if nobody retires?

Quote:

From what I quickly found, the top 20% hold more than 80% of the total wealth, with the top 1% holding in excess of 40%... and since I didn't want to spend a TON of time searching, those numbers are from 1989 and 1992 respectively.... pretty old and out of date to be sure.

Sooo.... wouldn't it be fair that the top 20%, who hold 80%+ of the wealth, pay 80% of the taxes?
Actually, that top 20% also gets more than 80% of the access to government officials and affects far more than 80% of the lawmaking process. They hold far more than 80% of the wealth (and remember that ownership is 90% of the law). So I think by any rational measure, the wealthy are getting a very good deal. Of course, if they don't believe that they could always give away their wealth and look for those liberal handouts to the poor that they despise so much.
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Re: What if nobody retires?
Old 12-08-2004, 03:51 PM   #10
 
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Re: What if nobody retires?

No retirement for these people! :

-----------------------------------------

NY Times
December 8, 2004
Retirees Return to the Grind, but This Time It's on Their Own Terms
By JOHN LELAND

When Marion Stickle retired in January, after 25 years at Procter & Gamble, she had had enough of the grind. "I'd worked hard 50 hours a week, tried to raise a family, and was worn out," said Ms. Stickle, who had coordinated the artwork on the company's products. "Something had to give."

But her skills, it turned out, were not easy to replace. Within a few months, Procter & Gamble wanted her to come back. Through a new program designed specifically for retired professionals, Ms. Stickle returned to the company on a part-time assignment that lasted five months - exactly the situation that many older workers or retirees say they want, but that companies face formidable hurdles to offer.

"It feels different," Ms. Stickle, 55, said of her return. "I have enjoyed the work. I'm enjoying the more relaxed pace of my life right now."

(part 2 follows)
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Re: What if nobody retires?
Old 12-08-2004, 03:53 PM   #11
 
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(part 2)

To do so, she had to get around decades of government and corporate policies that have made it difficult for older workers or retirees to remain on the job part time. "When the baby boom was coming in, the goal was to drive older workers out of the work force because you had younger ones coming in at a lower price," said Alicia Munnell, director of the Center for Retirement Research at Boston College. "We're entering a period where there won't be as many young workers. So now companies have to reverse those policies to keep older workers in."

Ms. Stickle works for YourEncore, a company that executives at Procter & Gamble and Eli Lilly started last October to address a demographic change facing all industries: as the nation's 76 million baby boomers head toward retirement age, the generations behind them lack the numbers and sometimes the skills to replace them.

"It really is a serious problem," said Rudolph Penner, a senior fellow at the Urban Institute, a nonpartisan research organization in Washington. "It's not my impression that the top executives at many companies are worried about this. But the human resource departments can see it coming."

While some other companies are rewriting their retirement policies to keep older workers from retiring, Eli Lilly and Procter & Gamble identified a different talent pool: retired professionals who wanted to return to work on a limited basis.

In surveys, older workers say they would like to scale back their hours, in "phased retirement," rather than leave altogether. Some need the money; others want the challenges or camaraderie.

But current tax laws, protections against age discrimination and corporate pension policies all make phased retirement difficult for workers and companies, Mr. Penner said.

Many older workers with traditional pension plans would be hurt financially if they reduced their hours because their pensions are based on their earnings in their last working years. If they want to work part time, Mr. Penner said, they have to leave the company. Also, each year they put off retiring means one fewer year of collecting their pension. And new retirees cannot return immediately to their old companies without risking tax penalties for both the employer and the retiree.

In November, officials at the Treasury Department and Internal Revenue Service addressed one obstacle to phased retirement, proposing changes to allow workers older than 591/2 to work part time and collect part of their pensions. "That solves part of the problem, but there's still a lot more to be done," Mr. Penner said. "This is still a back-burner issue" for both lawmakers and corporate executives.

Mr. Penner added that many companies also fear that if they tailor part-time programs for older workers, they might be sued for age discrimination. On all of these fronts, he said, the laws "have not been fleshed out," so many employers and workers shy away from phased retirement even where it is feasible.

At Procter & Gamble and Eli Lilly, executives identified a looming shortage of scientific talent, said Alph Bingham, a vice president at Eli Lilly who develops alternative business models for the company.

As their older scientists retired, there were not enough American or foreign students entering university science programs to replace them. In response, the two companies created YourEncore, an independently owned company that supplies retired scientists or technology workers to Procter & Gamble, Eli Lilly and any other companies that join the network. Employees work for YourEncore, at rates based on their final salaries before retirement. Companies pay an initial fee of $50,000, plus a fee for each placement.

So far, Boeing and National Starch and Chemical have joined YourEncore. Since the program started, about 400 retirees (called "members") from 150 companies have worked on projects lasting from one day to several months.

(part 3 follows)
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Re: What if nobody retires?
Old 12-08-2004, 03:53 PM   #12
 
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Re: What if nobody retires?

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So I think by any rational measure, the wealthy are getting a very good deal. Of course, if they don't believe that they could always give away their wealth and look for those liberal handouts to the poor that they despise so much.
Yup, We'll glady change places with them and assume their nasty tax burden and they can have all the 'benefits' that we're getting.

They have a good deal and know it - Any complaining that is done by the rich is just so that it won't be taken away from them. - They don't want to seem too Happy
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Re: What if nobody retires?
Old 12-08-2004, 03:54 PM   #13
 
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Re: What if nobody retires?

(part 3 to end)

Timothy Balm, who designed research trials for new products at Procter & Gamble, retired at 52 after his wife was diagnosed with Stage IV colon cancer. He had enjoyed his work, he said, but he did not want to spend his wife's final years or months at the office. After her death in June, he signed up with YourEncore and returned to work part time at home. He likes being productive again, he said, but without the pressures that had taken the fun out of work in his last years.

"After 31 years of orienting my life toward productivity and problem-solving, it was very difficult to walk away from that cold turkey," Mr. Balm said. "This is like Nicorette." Because retirees work for YourEncore rather than the member companies, the program resolves some of the obstacles to phased retirement. "I really think this is the wave of the future," said Diane Piktialis, a senior product manager at Ceridian, which advises companies on personnel.

"Companies are realizing that they have to change their entire mindset about retirement."

When asked why more companies did not offer similar programs, she said many employers still held low opinions of older workers.

"I'll tell you why every company doesn't do this," she said. "The reality is that it's an ageist society, and up until a couple years ago, older workers were subject to negative stereotypes. Companies bent over backwards to get rid of them. Yet we've found from research that the stereotyping is unfounded. Older workers can learn new technologies, and are less absent than younger workers."

Anna Rappaport, who led a recent AARP study of how companies treat older workers, said that many employers, especially hospitals, were now working informally toward comparable programs.

Barbara Sailer, 62, retired from Procter & Gamble in 2001 to start a marketing business. At the time, she had no interest in slowing down. But the economy faltered, and the business never took off. So she took an assignment with YourEncore, returning to Procter & Gamble part time. She works from home and takes time off for mission trips to build houses in the developing world.

In her new role, she said, she does not have the stress of office politics or of constantly jockeying for promotions. "They didn't have to train me, and they don't have to worry about me giving away trade secrets," Ms. Sailer said. "They gained tremendously, and I do as well."

When her assignment ends next June, she said, she hopes to find one elsewhere. "When you retire, you don't necessarily keep up the old relationships," Ms. Sailer said. "It's great to be back in an environment that has expectations and personal contact."

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Re: What if nobody retires?
Old 12-08-2004, 04:39 PM   #14
 
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Ms. Sailer said. "It's great to be back in an environment that has expectations and personal contact."
Or like a lot of folks here. It's great to have personal contact with No expectations.
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Reading articles like this...
Old 12-08-2004, 11:20 PM   #15
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Reading articles like this...

... about places & people like that, more than anything else, makes me realize that I'm not going back to work.
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Re: What if nobody retires?
Old 12-09-2004, 03:29 AM   #16
 
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Re: What if nobody retires?

First of all, I am happy for the rich and don't blame them
for anything, no matter how they got their money. I hope
they enjoy it and wish that people (government) would stop
demonizing them. And, I have very little myself, but do appreciate
the opportunities available in the USA to get "rich".

I never suffered much under bad bosses or corporate
politics over the final 10 years of working, because I was
running my own show, for the most part. Thus,
anxiety and unhappiness with my job did not play into
my ER decision much. The point is in spite of my ER commitment, I might have continued on with my own business. Not saying I wish I had, only that I
have empathy for those who work into their 80s and
enjoy it. I would not have enjoyed working for
someone else though. Don't see any way that could have worked.

JG

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Re: What if nobody retires?
Old 12-09-2004, 10:00 AM   #17
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Re: What if nobody retires?

Nords;

I read articles like the one posted (thanks, by the way, PL) and wonder why these former employers acted as if each employee was such a liability and problem during their tenure. *Any one who deigns to return to such an adverse employer seem to me to be acting more as out of emotional co-dependency than common sense. *I say freedom means never having to return corporate phone calls. *There's a great section in Terhorst's book that describes the need to replace the work related emotional gratification with family and genuine experiences. *I once told my wife *that its stupid to "love anything that will not love you back". *If corporate life rings ones bell, great for you. For me, life is too short. *
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Re: What if nobody retires?
Old 12-09-2004, 02:25 PM   #18
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Re: What if nobody retires?

So John, Gary Winnick, a looter par excellence, would be one of your heroes?
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