Prof says ER is selfish, unpatriotic

[Nanita8140]

Damn!..this article made me so mad, that I have decided to retire a whole year earlier!

 

[DblDoc]

Here is the conclusion section to the primary reference cited, and entitled (can you believe this): "Working for a Good Retirement". Their positive spin for the individual is that they will have more money to spend in retirement. There is no mention, however, of the fact that some of you will have died, and those who survive will now have 1 to 5 years less to enjoy it. In addition they conveniently forget to factor in inflation when calculating the "benefit".

Quote: ​

"Conclusion​

Previous work has shown that the economic pressures of an aging population can be relieved considerably for particular hypothetical workers if they can be encouraged to delay retirement. The choice of retirement age is the most important portfolio choice most workers will make—far exceeding in importance such issues as whether to invest their 401(k)s in stocks or bonds. Working longer increases the net output and productivity of the economy, generates additional payroll and income tax revenue, and reduces the average number of years in which people receive retirement benefits. This report extends that previous research by demonstrating for the population as a whole just how much of a difference additional years of work can make for retirement income, for closing the gap in the Social Security deficit, and for producing other taxes that can be used to support the government as a whole.​

We find that people could increase their annual consumption at older ages by 5 percent if they worked one more year and by 25 percent if they worked five more years—assuming an annuity purchased at age 50. The gains from working longer would be even greater if retirees saved their additional wealth and annuitized it at retirement—a 9 percent increase in consumption from one more year of work and a 56 percent increase from five more years of work. Lower-income workers gain more from additional work than higher-income workers, but all workers gain. The Social Security earnings generated from one additional year of work are almost equal to the entire 2045 Social Security shortfall (of benefits from taxes) projected under the baseline scenario. Also, the additional Social Security taxes generated by five years of work offset more than half of the Social Security shortfall in 2045. While working an additional five years reduces the Social Security deficit, it is not enough to completely erase it. However, combining additional work with a corresponding change in the NRA means that Social Security could remain solvent beyond 2049 (the last year in the projection period). Accounting for the federal and state income taxes generated from additional work, no other changes in Social Security policy would be needed for the system to remain solvent throughout the projection period.​

Interpolating between the one year and five year projections suggests that if workers would increase their work over the next 45 years roughly in proportion to their increase in life expectancy, they would likely increase payroll and income taxes by enough to wipe out almost any deficit in old age insurance payments between benefit payments and Social Security taxes currently collected.16 In this last case, we are not arguing that all those tax dollars should be devoted to Social Security, only how powerful the effect of additional work can be."​

DD​

 

[Gotadimple]

particular hypothetical workers

While working an additional five years reduces the Social Security deficit, it is not enough to completely erase it. . . means that Social Security could remain solvent beyond 2049 (the last year in the projection period).​

So, HERE's the Problem -- those darned hypothetical workers are theoretically increasing productivity thereby making the real living and breathing workers look like slackers!

I knew this game was rigged.

What about all those other workers who have made a living at just getting by? And has anyone been counting the virtual workers

----
Rita​

 

[Beer man]

Seems to me the most patriotic thing to do is save and invest your money wisely so you can retire early. Certainly that keeps you from becoming a burden on society and helps to build the economy by investing in profitable enterprises that employ those who don't plan for early retirement.

 

[Milton]

He is probably unable to retire early so he doesn't want anyone else to.

I don't know if that's true or not. But as a tenured professor, he has much more job security and vacation time, and much less stress and work demands, than the vast majority of employees. So while it's easy for him to imply that everyone ought to enjoy working, he has no credibility.

Seems to me the most patriotic thing to do is save and invest your money wisely so you can retire early. Certainly that keeps you from becoming a burden on society and helps to build the economy by investing in profitable enterprises that employ those who don't plan for early retirement.

People like the good professor assume that people who have money saved up just bury it in the ground, or keep it stuffed under the mattress. The idea that it might be productively invested in the economy never occurs to them.

 

[TickTock]

People like the good professor assume that people who have money saved up just bury it in the ground, or keep it stuffed under the mattress. The idea that it might be productively invested in the economy never occurs to them.

Yes. Only paid employment counts. Anything else is selfish...

 

[homestead]

Hey Prof. thanks for uniting the forum.
Let me make this simple for you.

Remember the story of the grasshopper and the ant?
You don't really expect the ant's who have been working hard all
their lives saving to bail out the grasshoppers who knew that winter was
coming and refused to save.

 

[RetiredGypsy]

It's been my opinion from first-hand observation the ants usually wind up eating the grasshopper.

 

[Lazarus]

The Prof. can’t inagine retiring and depriving the world of his brilliance.

 

[kcowan]

People like the good professor assume that people who have money saved up just bury it in the ground, or keep it stuffed under the mattress. The idea that it might be productively invested in the economy never occurs to them.

Has anyone seen any studies on the impact to the economy of buying an equity versus buying a flat panel TV?

 

[HFWR]

Has anyone seen any studies on the impact to the economy of buying an equity versus buying a flat panel TV?

But you can't watch "Oprah" or "Dancing With The Stars" on a stock certificate...

 

[cute fuzzy bunny]

So other than that main advantage...?

 

[Milton]

Here's an article that the professor should perhaps read: Pitfalls-of-Working-Past-Retirement-Age: Personal Finance News from Yahoo! Finance.

[W]hat workers with defined-benefit pensions and those who already have tapped Social Security benefits might not realize is that there are significant financial disincentives that make working into retirement age a tricky proposition.