M
Marketneutral
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WhodaThunkit said:The increase in life expectancy may not be all that much. Over the last however many years, life expectancy from birth has increased greatly because of reduced infant mortality. On the other hand, the life expectancy of a 65 YO has increased, but not nearly as much. Probably not 12 years!
People who actually work at work, for example bricklayers, cannot normally work until age 72. So raising the retirement age that much is probably not going to happen.
More generally, the projections that show SS "in crisis" assume a (real) productivity growth rate of 1.2% for the US economy. This is significantly less than the actual productivity growth rate of the US economy over the last 100 years, which period of course included boom times and also the great depression. Even at 1.2%, however, SS is solvent until about 2040-2050. If you use the actual hundred-year historical growth rate of 2.0% in making projections, SS is solvent for many, many, many years into the future without any changes at all. Moreover, there is no reason to assume that real productivity growth will decrease -- it may just as well increase, based on technological and business-process improvements.
The problem that people need to think about is the cost of medical care. This is showing evidence of being a real concern TODAY, as opposed to a theoretical problem that might happen in 2042. There is no way that Medicare can be sustained as it now operates. Unless we have some thoughtful progress in containing the cost of medical care, we are in real trouble as retirees and would-be retirees.
Bottom line -- If SS fails, it will fail for ideological reasons, not financial reasons. OTOH, Medicare will almost certainly fail unless something is done fairly soon.
I was speaking about the future.
Can you really say 30 years from now the social security retirement age will not be 12 years higher then now?
My point is if you based your retirement calculations on now - when the actual time comes you may be caught with your pants down.
An extra $50 a month now towards retirement could means thousands that need to saved years from now.
Just for the discussion. I am 31 and retired two years ago. So the retirement age of 62 now seems very far off. My guess is my social security age will be close to 70-75.
This figure is based on the rate of social security payments makes up against GDP and the ratio of workers to retirees now...................
Besides what the ratio to brick layers to paperpushers?
We are turning into a service based economy from a manufactoring (producing) economy. With advances in health care the age for min retirement benefits will probably increase 6-12 months for every 3 years in the future.