AIG Chief says retirement age may move to 80

[Texas Proud]

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.

Immigration is taking up the slack from the lower birth rate... so the numbers are not as dire as you say.... not great, mind you, just not as bad...

 

[Moscyn]

They can push the retirement age to how many years they like as long as they leave me alone - I am retired and done with working. There is more to life than working to survive. I refuse to be viewed as an economic output unit which must constantly be upgraded or prolonged to ensure better economic growth when there are so many greedy corporations and inefficient government still going on their usual ways.

 

[haha]

Immigration is taking up the slack from the lower birth rate... so the numbers are not as dire as you say.... not great, mind you, just not as bad...

How many immigrants of the type that we mostly get in America does it take to support one middle class professional in his old age? How many of our immigrants even work on the books?

PC won't allow an analysis, but I think uncontrolled immigration will be a net loss as far as the eye can see. Don't forget the cost burden that comes with US style immigration.

Ha

 

[Independent]

Immigration is taking up the slack from the lower birth rate... so the numbers are not as dire as you say.... not great, mind you, just not as bad...

That's correct. There are other offsetting factors too - like the percent of women in SS covered jobs, and their wages.

The SS actuaries have explicit assumptions regarding immigration, legal and illegal http://www.ssa.gov/oact/tr/2012/2012_Long-Range_Demographic_Assumptions.pdf

If I've got the numbers right, they are assuming a little over 1 million net immigrants (vs. about 4 million live births). I didn't chase the numbers for prior years to see how much changing immigration rates have changed the worker/retiree ratio.

IIRC, they even make an assumption about whether illegal immigrants will eventually be granted SS benefits based on their work histories. Sometime in the last 10 years, one of the changes to the long term outlook was a change in that assumption.

 

[okapi]

I plan on working five years after I die.

 

[rescueme]

I plan on working five years after I die.

As long as you include a change of address so we can send your paycheck (or direct deposit) ...

 

[Bestwifeever]

I'm sorry, I just can't help laughing at a staff meeting of 80-year-olds (and I would be the worst) as they each report on their tasks.

 

[antmary]

I'm only in my 60's, and have been retired for 12 years. What a bummer it would be to have to go back to work! Talk about hard times...working for a living in your 70's

I have become very spoiled...sleeping in, taking walks, puttering in my garden, spending time with family/friends, serving as a lap for my kitties, making art, taking a nap whenever I feel like it. Did I mention day dreaming?

I need to keep my gratitude list pinned up where I can see it on a daily basis.

 

[Independent]

How many immigrants of the type that we mostly get in America does it take to support one middle class professional in his old age? How many of our immigrants even work on the books?

PC won't allow an analysis, but I think uncontrolled immigration will be a net loss as far as the eye can see. Don't forget the cost burden that comes with US style immigration.

Ha

Good question. Immigrants don't help SS a lot if they are unskilled laborers.
This source says about 10% of the native born population do not have HS diplomas, compared to 30% of foreign born. http://www.census.gov/compendia/statab/2012/tables/12s0040.pdf
However, foreign born are just as likely to have college degrees.

I won't get into the "net" issue except to say it's clouded by politics.

 

[rescueme]

I'm sorry, I just can't help laughing at a staff meeting of 80-year-olds (and I would be the worst) as they each report on their tasks.

It probably would go quite quick, since most would have forgotten what they wanted to say (as a 64-year old, I'm qualified to comment - I resemble that remark )...

 

[antmary]

It probably would go quite quick, since most would have forgotten what they wanted to say (as a 64-year old, I'm qualified to comment - I resemble that remark )...

You can always "re-assemble" that remark

 

[Focus]

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....

But don't raise it for those 50 and over who already had the age increased to 67 and made their retirement plans with that in mind. And remove the salary cap. You're done.

From the article you link to:

I'm not a policy expert, but I have some ideas.
Raise the full Social Security retirement age to 80 to motivate people to work longer.

In other words: I don't know how the real world works, but I'm full of ideas! I think the idea of increasing the Social Security age to 80 is absurd. It just goes to show what a good PR job those who seek to dismantle Social Security have done. There's no need to use a sledgehammer when a screwdriver is all you need -- unless your intent is to destroy, rather than fix.

 

[jclarksnakes]

I think raising SS to 70 for everyone under 40 today is totally unfair to younger workers. If something like this passes I would not be surprised if the young folks put a bounty on our grey heads.

 

[Midpack]

I think raising SS to 70 for everyone under 40 today is totally unfair to younger workers. If something like this passes I would not be surprised if the young folks put a bounty on our grey heads.

What would you propose? If retirement age isn't raised, younger workers will have to pay more in (there's a Catch 22, retire later or pay more) or SS benefits will have to be reduced in some way. Easy answers seem hard to come by...

 

[jclarksnakes]

What I would propose is that we share the pain. Stopping the COLA on SS for a couple years would work. BTW, raising the retirement age to 70 for those workers who are now less than 40 would not result in any savings until they reach SS age which is a long ways off. The figures I have seen indicate SS will be short before that time.

 

[ziggy29]

But don't raise it for those 50 and over who already had the age increased to 67 and made their retirement plans with that in mind.

Those of us *under* 50 also had their age raised to 67.

I have already started making retirement plans at 46. Why should my older brothers be shared the pain of "shared sacrifice" while I get screwed? And what if the 50+ folks are already affluent and don't *need* SS at all? Why would a 49-year-old who needs it get treated like a second class citizen compared to a wealthy 50-year-old who doesn't?

These blanket exemptions for "X age and up" encourage intergenerational warfare, IMO. Either we're all in this together or we're not, IMO -- enough with the sacred cows.

 

[Midpack]

What I would propose is that we share the pain. Stopping the COLA on SS for a couple years would work. BTW, raising the retirement age to 70 for those workers who are now less than 40 would not result in any savings until they reach SS age which is a long ways off. The figures I have seen indicate SS will be short before that time.

+1. I (evidently mistakenly) thought you were suggesting raising the retirement age should be categorically off the table. Unfortunately it may take raising the retirement age in some fashion, slowing COLA, increasing SS contributions, taxing some SS benefits and whatever else - with some age/sensitivity continuum for current (or closer) retirees. I agree the only fair approach is for all to be willing to sacrifice or "share the pain."

 

[Independent]

The problem with most benefit reductions, like increasing the retirement age or changing COLAs, is that they hit low income workers just as much as high income workers.

In fact, since life expectancy has been growing faster among higher income workers, much of the longevity "problem" is created by the higher income group.

Specifically, male Social Security–covered workers born in 1941 who had average relative earnings in the top half of the earnings distribution and who lived to age 60 would be expected to live 5.8 more years than their counterparts in the bottom half.

In contrast, among male Social Security–covered workers born in 1912 who survived to age 60, those in the top half of the earnings distribution would be expected to live only 1.2 years more than those in the bottom half.

I think the primary purpose of SS is to assure that old people have enough to live indoors and eat. I'm a lot more concerned about preserving the $10k benefit for $15k workers than I am about preserving the $29k benefit for $100k workers. So I tend to look for changes that aren't directly proportional.

https://www.socialsecurity.gov/policy/docs/workingpapers/wp108.html

 

[Mulligan]

One thing is for sure, the "temporary" reduction in SS taxes on employees cant be helping the problem. And the longer this continues, the more people are going to view it as a tax increase which make it harder to reinstate. The medicare funding crisis is more worrisome to me since the WEP isnt too kind to my future SS income. Higher income people already pay higher premiums if I am not mistaken. This line of thinking could spread to SS in higher income benefit reductions, even though the " bend points" in SS payouts already exist. I imagine, however, I overestimate the amount of "rich people" there are to have benefit reductions to meaningly help the masses in this shortfall.

 

[Katsmeow]

I have already started making retirement plans at 46. Why should my older brothers be shared the pain of "shared sacrifice" while I get screwed? And what if the 50+ folks are already affluent and don't *need* SS at all? Why would a 49-year-old who needs it get treated like a second class citizen compared to a wealthy 50-year-old who doesn't?

I think the problem is that those of us over X age -- not sure what age that is -- aren't in a situation where we have enough time to prepare for a different reality. My husband retired at 62. I'm 58 and semi-retired. If someone, suddenly said retirement age was 70 then we have a huge problem as we have acted based upon the current scenario and we don't have the time to go back and change to a new one.

As far as the already affluent...well what does that mean? Someone might think DH and I are already affluent and don't "need" all that SS. But, to us, we've planned based upon it being there and it would significantly change our life for it not to be there. Could we survive? I guess so. Would we have chosen that lifestyle? No. But at this point we couldn't choose it, it would be imposed on us.

I'm not saying that there can't be changes that impact older people. I'm just saying that it is different because they can't do as much to save more money, etc. as someone who is younger.

One thing is for sure, the "temporary" reduction in SS taxes on employees cant be helping the problem. And the longer this continues, the more people are going to view it as a tax increase which make it harder to reinstate. The medicare funding crisis is more worrisome to me since the WEP isnt too kind to my future SS income. Higher income people already pay higher premiums if I am not mistaken. .

I always thought the temporary reduction in SS taxes was ridiculous and haven't changed my view on that. Made no sense to me at all.

Medicare part B premiums do vary with income. For house related reasons DH and I had unusually high income last year and this year which means when DH turns 65 this fall we will have high Medicare premiums for him for several years.

 

[ziggy29]

I think the problem is that those of us over X age -- not sure what age that is -- aren't in a situation where we have enough time to prepare for a different reality. My husband retired at 62. I'm 58 and semi-retired. If someone, suddenly said retirement age was 70 then we have a huge problem as we have acted based upon the current scenario and we don't have the time to go back and change to a new one.

But the problem is that "drawing a line" will always have people resisting reforms if they are on the "wrong side of the line" because they are feeling like they have to sacrifice when others don't. And those others may not need it as much as those asking to (yet again) accept a worse deal in the future.

Unless everyone is willing to share sacrifice, I don't see this getting resolved. Does that mean everyone has to suffer? No. But a "magic number" like someone's age is not sufficient, IMO, without other factors being considered. If someone is over 50 or 60 and has a lower income, one that's highly indicative of needing every dollar of their benefit? Spare them. I don't think an affluent person should be spared because they are 52 while a struggling household is told to wait longer or accept a lower benefit because they are 48. Again, I think that invites generational warfare that helps none of us.

 

[Midpack]

I think the problem is that those of us over X age -- not sure what age that is -- aren't in a situation where we have enough time to prepare for a different reality. My husband retired at 62. I'm 58 and semi-retired. If someone, suddenly said retirement age was 70 then we have a huge problem as we have acted based upon the current scenario and we don't have the time to go back and change to a new one.

That's true for anyone who has already retired, and that's why most proposals seem to graduate benefit changes according to age - many recommend no change for people above 65 or whatever age(s). But for anyone who has not retired, you can still adjust regardless of what you planned on in the past. For example, if the retirement age is pushed back 2 years, you may have to delay your retirement as much as 2 years, your longevity should remain unchanged and your years in retirement would be reduced by 2 years. Again, I mentioned graduating benefit changes, I assume the consensus will not treat a 63 year old worker the same as 53, 43, 33, etc.

I realize this may not be desirable for pre-retirees, but like Ziggy noted, there's no easy answer that I know of once every generations stake is on the table. In many cases, our children and grandchildren will have to sacrifice even more if the parents refuse to sacrifice. I assume most parents might be willing to share when they realize who's going to have to make up the difference...

But the problem is that "drawing a line" will always have people resisting reforms if they are on the "wrong side of the line" because they are feeling like they have to sacrifice when others don't. And those others may not need it as much as those asking to (yet again) accept a worse deal in the future.

Unless everyone is willing to share sacrifice, I don't see this getting resolved.

 

[rodi]

One thing is for sure, the "temporary" reduction in SS taxes on employees cant be helping the problem. And the longer this continues, the more people are going to view it as a tax increase which make it harder to reinstate. .

This!

When the "temporary" reduction first happened I immediately increased my 401k contributions by 2%. After all - I was used to not having that money.

I advised all my coworkers to do the same. They looked at me like I had a hole in my head.

Then when the employee stock purchase plan was eliminated, again, I upped my 401k contribution to divert the payroll deduction difference. Again, I advised coworkers to do the same. Again, blank stares or looks of horror.

 

[Midpack]

This!

When the "temporary" reduction first happened I immediately increased my 401k contributions by 2%. After all - I was used to not having that money.

I advised all my coworkers to do the same. They looked at me like I had a hole in my head.

Then when the employee stock purchase plan was eliminated, again, I upped my 401k contribution to divert the payroll deduction difference. Again, I advised coworkers to do the same. Again, blank stares or looks of horror.

And the story ends with you retiring early -and your coworkers will 'look at you like you have a hole in your head, blanks stares or looks of horror' (for themselves). So it all works out...

 

[Chuckanut]

How many immigrants of the type that we mostly get in America does it take to support one middle class professional in his old age? How many of our immigrants even work on the books?

Immigrants like Elon Musk.....