Economic Insecurity and Older Americans

[Mulligan]

You've just identified one of the biggest pitfalls of present day Western culture. Want to guess what this sounds like to an African or Chinese?

It may be a pitfall of Western culture, but I consider it mostly being set in my ways and liking my space. If I had to do it? Yes, but only after all other means are exhausted and my money holds out. I would be way more accepting of helping my daughter in need, than her helping me.

 

[Letj]

I am guessing that you live in the South. Here in the PNW the average charge for non medical assistance is $24/hr for Mon-Fri days only. Evenings, nights or weekends about 10% more. That is strictly non-medical assistance (driving to the dr, helping prepare meals, light housework, assistance with dressing, toileting, bathing).

Someone who needed 24/7 care would be paying upwards of $4000/week. (My last part time gig was for such an agency whose fees were in the mid range)

No, I am referring to NYC. These are Home Attendants that you can hire directly without using an agency that can come to the house to care for an aging parents; they're not licensed; they're more like house hold help that help with the bathroom, showers and feeding. They earn minimum wage most of the time from what I can tell. You can even get them to sleep in with your parents. Don't personally have any experience but I've heard of people who used them with great success; most of them if not all are immigrants.

 

[NW-Bound]

Talk about the future of Chinese retirees, as I mentioned previously, I read a report that painted a bleak picture. Their demographics are worse than ours, though I do not remember the specifics. Remember the Chinese government's "one-child" policy to control population growth? The off-shoot of that policy is that there will be fewer workers to support the current parents with only one child. And now that the Chinese living condition is getting better, I would venture that their longevity will also lengthen.

Too many geezers, all around the world! Many developed countries will have a higher ratio of retirees to workers than that of the US. Japan is one such example. Bleak, bleak...

When there are fewer workers to support people who are no longer producing, there have to be shortages of services and goods. Of course, the geezers can "help" by cutting back on consumption. This reduction on consumption is most likely to be involuntary. The retirees who have less, either because they failed to save or did not have high income to allow them to save, will feel crimped. Collectively, even if everybody is a good saver, we still have a problem. When there are too many dollars chasing too few good and services because there are fewer workers, there will always be people at the bottom 10% who get squeezed.

It's a tough problem. Bleak, bleak, bleak...

 

[M Paquette]

Too many geezers, all around the world!

Fortunately, the good folks at Parallax Corp have a solution in mind.

http://www.parallax-corp.com/portfolio/soylent-green/

Tastes just like Grandmas!

 

[stoutboy]

Except it may not be all that bleak. The one child policy is not uniformly enforced throughout the country--rural peasants are allowed to have two kids in many cases (and 70% of the people still live in rural areas), and ethnic minorities can have more than one child as well. So the policy only affects about a third of all Chinese. Even for the urban areas, no one really knows what the labor shortfalls will be, if any. It would be a relatively quick fix (one generation) to let people start having more kids again. Or, they could allow more rural people to relocate to the cities. Also, don't forget China is sitting on an enormous pile of cash. If China takes the proper measures to modernize its legal system and tax codes, along with enforcement and collection, it can meet the challenge. I think the real danger facing China is that it is an ecological basket case. They're trying to turn green, and doing a respectable job as far as putting in the investment, but it still may be a case of too little, too late.

Talk about the future of Chinese retirees, as I mentioned previously, I read a report that painted a bleak picture. Their demographics are worse than ours, though I do not remember the specifics. Remember the Chinese government's "one-child" policy to control population growth? The off-shoot of that policy is that there will be fewer workers to support the current parents with only one child. And now that the Chinese living condition is getting better, I would venture that their longevity will also lengthen.

Too many geezers, all around the world! Many developed countries will have a higher ratio of retirees to workers than that of the US. Japan is one such example. Bleak, bleak...

When there are fewer workers to support people who are no longer producing, there have to be shortages of services and goods. Of course, the geezers can "help" by cutting back on consumption. This reduction on consumption is most likely to be involuntary. The retirees who have less, either because they failed to save or did not have high income to allow them to save, will feel crimped. Collectively, even if everybody is a good saver, we still have a problem. When there are too many dollars chasing too few good and services because there are fewer workers, there will always be people at the bottom 10% who get squeezed.

It's a tough problem. Bleak, bleak, bleak...

 

[samclem]

If one reads the post too quickly it's easy to skim right over the (bolded) screaming obscenity.

. . . It would be a relatively quick fix (one generation) to let people start having more kids again.

 

[Midpack]

Except it may not be all that bleak. The one child policy is not uniformly enforced throughout the country--rural peasants are allowed to have two kids in many cases (and 70% of the people still live in rural areas), and ethnic minorities can have more than one child as well. So the policy only affects about a third of all Chinese.

While still in place (to some extent), the one-child policy began in 1978, so projecting future demographics based on actual births over the past 32 years isn't difficult at all. There are dozens if not hundreds of studies that all point to a worse demographic case for China (Japan, Europe, etc.) in the next 40 years than the US. Much of the US growth assumes more immigration than most other countries allow.

 

[dmdunca44]

No, I am referring to NYC. These are Home Attendants that you can hire directly without using an agency that can come to the house to care for an aging parents; they're not licensed; they're more like house hold help that help with the bathroom, showers and feeding. They earn minimum wage most of the time from what I can tell. You can even get them to sleep in with your parents. Don't personally have any experience but I've heard of people who used them with great success; most of them if not all are immigrants.

You can hire unlicensed, unbonded home care attendants here too for less than the agency rate of $24/hr. But you have to screen them yourself and personally I would be hesitant to leave a vulnerable senior in the sole care of an unlicensed, unbonded stranger. Too many opportunities for abuse.

 

[NW-Bound]

No matter how one slices it, societies would not have problems supporting retirees when the ratio of them to the younger workers is low, or when we have productivity increases. When we had economic growth like in the last century, that was not a problem.

But how can anything grow forever? The earth natural resources are not unlimited to sustain the growth like we had in the last few centuries.

Again, perhaps the way the world could cope is to become more efficient, and to reduce consumption. I can see ourselves cutting back. At some points, I may move to a smaller home, and either let my children take over the homes I have now, to sell them to people who can use them. Yes, let the current workers have their turn at enjoying the material goods. At least, I am happy that we still have extravagance that we can cut back from. Other people are not so fortunate.

Meanwhile, in today's news:

An elderly Greek's suicide outside parliament has quickly become a symbol of the pain of austerity... Dimitris Christoulas, 77, shot himself in the head on Wednesday after declaring that financial troubles pushed him over the edge. A suicide note said the retired pharmacist preferred to die than scavenge for food.

A day earlier, a 78-year-old woman in Sicily jumped to her death because her monthly pension payments had been reduced.​

 

[pb4uski]

H2O Dude, I am not sure which part of the country you live but in many places, you can find in home care from Home Attendants for little more than $200/week for a 40 hour week.

How can that be given the minimum wage is more than $5/hour?

 

[samclem]

How can that be given the minimum wage is more than $5/hour?

There are many federal and state exemptions from state and federal minimum wage laws (FLSA). (More info: Minimum wage exemptions) For example, "Companions for the elderly" are exempt from federal min. wage laws. It might be possible to find a way to pay below minimum wage depending on how the work was described. Of course, to do this all legally I'm sure there would be FICA payments, etc that would increase the cost of hiring someone.

And all that leaves aside the question of finding someone trustworthy to do the job at such a low rate.

 

[MichaelB]

No matter how one slices it, societies would not have problems supporting retirees when the ratio of them to the younger workers is low, or when we have productivity increases. When we had economic growth like in the last century, that was not a problem.

The pre-requisite to avoiding poverty for seniors is the collective will and commitment to do so. Enabling programs and resource allocation follows that. It is clear in the US we have had the desire to do this, but we have other wants too and are not good at making choices. At the risk of repeating myself, though, I think poverty among seniors is not a shortcoming of the social security program, and other federal and local programs do a great deal for seniors facing harsh conditions.

 

[stoutboy]

Again, though, it's a relatively easy fix for China. The statistics used in this data are for urban populations--the only part of China where the one child policy remains in force. China has many solutions to choose from: repeal the policy for urban dweller--then the problem will solve itself in less than 25 years; allow less restricted mobility to urban areas by rural populations to increase the labor pool; devote its tremendous cash resources to a more expansive social security system; one other solution--encourage skilled, technical immigration. More and more Westerners are moving to China because there are better job opportunities there than in their own countries. Not just English teachers, but highly skilled people. China's got much bigger issues facing it than this one.

While still in place (to some extent), the one-child policy began in 1978, so projecting future demographics based on actual births over the past 32 years isn't difficult at all. There are dozens if not hundreds of studies that all point to a worse demographic case for China (Japan, Europe, etc.) in the next 40 years than the US. Much of the US growth assumes more immigration than most other countries allow.

 

[NW-Bound]

Compared to other countries, it seems like American retirees have it made.

I just did the tax return for my mother. She lives alone in a paid-for 1,700 sq.ft. home, buys more food than she eats (and throws quite a bit away). She still shops at Macy (being a widow, she has the entire home to herself and fills up all bedroom closets with her clothes!). She drives a 10-yr old Accord, and recently talked of getting a new car.

My mother lives fairly well on less than $24K/year. SS alone does not give her that. She has a small pension and IRA too. She does not have nor care for cable TV, the latest iPhone, iPad, etc... She does not travel much anymore, but still has frequent meals out with her friends. This is the kind of consumption cut back that I talk about, and it does not represent any real hardship.

Come to think of it, here in the USA, very few people really have to suffer from hunger or having their basic needs not fulfilled. In other countries, people are not so fortunate. When even the workers are struggling, what a retiree's right to complain? I was shocked to learn that the elderly Greek man who committed public suicide was a retired pharmacist. A pharmacist!

 

[jclarksnakes]

I saw something recently about the Greek version of SS paying benefits roughly twice what we get from SS here. Not sure on the specifics or accuracy. Anyone know the facts?

 

[Midpack]

China has many solutions to choose from: repeal the policy for urban dweller--then the problem will solve itself in less than 25 years...

Agreed, but 25 years is a very long time to work through, a whole generation if not more.

 

[stoutboy]

Yes, you're right, but it could do a combination of these things to mitigate the hardship.

Agreed, but 25 years is a very long time to work through, a whole generation if not more.

 

[samclem]

The pre-requisite to avoiding poverty for seniors is the collective will and commitment to do so.

Some seniors have even avoided poverty through individual "will and commitment to do so."

 

[jdw_fire]

i am late to this thread and i haven't read all the posts yet (i am at the post below) so i apologize if this comment is redundant but i wanted to comment while i was still thinking about this point.

A truly individualized system would miss the main benefit that both SS and insurance company's annuities have: the mortality credit. Individually, each of us would have to save for the worst (longest) case of survival, say, 95 or 100 years. Very expensive and most people will save too much because they will die well before that. Not an efficient system. Instead save through SS or an annuity. Because only survivors collect, the whole cohort does not need to save as much and can fund a consumer economy instead. This is why the Chinese savings rate is anywhere from 30% to 48%. Because every individual has to save for the worst case even though it is not very likely.

Really, this should be taught in high school so that all Americans understand what an extraordinarily stupid step it would be to revert to individual precautionary savings.

+1

SS is actually, IMO, the most unobtrusive, cost effective and dignity preserving (for the individual) way for the fed government to ensure the subsistence (can you say bare bones retirement) support for all the elderly in this country. however, i do think that SS needs to be kept up to date as life expectancies change and that the SS system's finances should be kept separate from the rest of the federal budget. in the past, while SS was in surplus, the unified federal budget made it too easy for the politicians and the public to ignore the true deficit spending the rest of the federal government was doing, a big mistake IMO. now if we can just find a way to get the US health care cost (per procedure and per capita) more in line with the rest of the developed world's, retirement planning wouldn't be as difficult.

 

[jdw_fire]

I think that this is a terrible idea.

I prefer to maintain as much control over my money as possible.

I accept the need for some sort of safety net, as a large number of people will fail to provide adequately for their retirement.

However, I don't think it is good to make absolutely everyone massively dependent on government programs that can change with the political winds.

Originally Posted by aleabo
I personally think that all 401K program is big mistake, to say at least. Instead of putting 12-15% of my salary in 401K and worry about right choices, market conditions, etc, I'd be happy to have my SS\Medicare taxes increased on the same amount and have guarantee SS and free (or all almost free) health insurance after retirement. This is basically European model ( and as far as I know Canada is close to it)

i agree which is why i think that SS should only be big enough for the subsistence/bare bones retirement. if someone wants anything more than that they should do the saving on their own. (this doesn't mean i think the government should do away with tax deferred savings.) however for a low income person/family that bare bones retirement may be close to what they were making when they were working, hence i think that the SS benefit computation formula is appropriate (except maybe raising the income limit and putting another knee in the formula, but that is another topic).