It is true that when the Act was enacted the retirement age was 3.3 years greater than life expectancy. Applying that to today's population, that would set retirement age at 82. I'll even add, benefits have vastly increased, from $22.71 ($408.31 adjusting for inflation) in 1940 to $1,413 in 2018, an increase of 246%.
As such, it could appear cuts would only be a return to normalcy. However, that ignores the economic reality of healthcare costs in the modern economy, which hits retirees disproportionately. It also ignores the cap was originally $3000 ($53081.88 after inflation) yet is currently only $106,800, an increase of 101.19%, but well short of the 246% increase in benefits.
Also, the author's suggestion that raising the retirement age would create a social benefit is specious. The proposed change would not reduce the social stigma of age, by eliminating the individual's receipt of old age benefits as the two concepts are distinct. Even assuming the stigma of age were removed, that would be a massive economic loss due to the huge influx of workers into the workforce. Supply and demand (of workers) suggests this would reduce wage growth, a result directly adverse to the economic strength of the trust funds, which the author claims is his concern.
Now we know why he didn't make it as a social worker. Also he buries a very telling statment to paraphrase 'ss was based on the presumption that most people would die before they were eligible to collect'. Now 80 seems like a good idea when that is one of the presumptions. What kind of person thinks like this. Can't wait for him to get old.
Further, for all you youngsters or trolls, ss will be here for you. A income cap adjustment will make it even stronger.
Glad someone is talking about the problem, 2034 is not that far off. We are cashing in the Greatest Generation's excess contributions and borrowing to repay those loans so the millennials will have to pay it back! Sad situation, we need more fica payors, higher cap, higher rates and the sooner the better. No one ever complains about the cap going up. So start there.
The Forbes contributor is absolutely clueless on original coverage provisions and reasons for changes in the Social Security Act.
Only basic wage workers were originally covered, not the self-employed or government workers. Wages at the time were stagnant because of the depression. The constant changing of the benefit calculation reacted to changes in the national economy and were based on the growing wages of the baby boomers thanks to the rapidly growing U.S. economy. In fact, all benefit amendments expanded benefit payments as well as disability benefits up until the 1977-1978 amendments.
The contributor's argument is also treating Social Security as a business instead of a social benefit. People's attitudes change. We no longer want people working in pain and suffering up until their death. We no longer want people being unable to work and having to wither away and die in the streets. Entire industries generate billions based on how we treat the elderly now. His goal of raising the retirement age only serves to further reward the wealthy as it is both confirmed by correlation and causation that the wealthy have access to better healthcare and longer life expectancy.
The only thing that may need to be considered at this point as a new benefit computation method. The current one has been in use for 40 years and has lasted the longest of them all. That does not require making absurd expectations that everyone is capable of working to 80 or raising the retirement age to 80 for the sole purpose of prevent workers from becoming eligible.
Former social worker, current retirement planner, he seems to be quite shit at both.
"Forbes contributor" is basically a synonym for "message board user". They'll post any kind of tripe from people who submit it. This isn't a professional column.
One study recently reported that the majority of workers over 50 who had been terminated during the great recession went back to work at wages that were at least 10%% less then what they'd been paid in their previous jobs. Imagine what employers would pay an 80+ worker.
His argument is based on the premise that old people are old because they get SSA. Don't give them SSA and they will stay youthful and keep working forever.
That old chestnut about shorter life expectancy when Social Security was created is misleading. A lot more people died in childhood then. And a lot more people died in their prime working years, so that (with advances in medicine) they're working longer as well as retiring longer. As explained here, the relevant number is life expectancy after attainment of adulthood: https://www.ssa.gov/history/lifeexpect.html.
And when Social Security was created, fewer women did paid work...a fact that that's conveniently absent from the Forbes article.
Mr. Laura's opinion has little weight because he doesn't address the real world issues. What are those? Do people on reaching the current retirement age, still tend to have declined in the physical and mental abilities needed to sustain full-time unskilled work? Next, is their ability to acquire skills limited compared to younger people? Finally, does that on average as a group make them uncompetitive in the labor market?
Mostly the answer to all three is yes, meaning it would be inhumane and defeat the purpose of Social Security to raise the retirement age. Sure you will find some exceptions, particularly among people who did not need to abuse their bodies too badly in their working years, and those blessed with a good education, skills, and wealth (a group likely over-represented in the Forbes magazine readership).
Recognizing what happens when humans age for purposes of setting a Social Security retirement policy does not mean you are engaging in improper age discrimination, as Mr. Laura suggests ("ageism"). I wonder if the irony of his ageism claim is lost on Mr. Laura. Claiming to want to benefit those 65+ years old, he proposes something that would likely make many of them suffer and hasten their demise, e.g., taking away the financial security needed to meet their basic needs in years that they are no longer able to earn a living through work.
80 is out of reach, but 70 seems like the real number they are shooting for with a change of early retirement to 65.
The big one will be when they change Medicare, you can move retirement ages around, nobody will care to terrible much, but it is Medicare that makes retirement as many will use this as primary health insurance. You don't have to touch retirement age if you move Medicare eligibility to 67, 68 or even 70. People will have to work to stay insured.
So this so-called expert really does not want anybody to collect SS. He even stated 62 was picked because life expectancy was around 61 back then. If this was the plan, then why call it Social Security? Just call it a forced tax on the working.
"The hope behind this statute is to save men and women from the rigors of the poor house as well as from the haunting fear that such a lot awaits them when journey's end is near."
As others have noted, the life expectancy being so much lower was in large part based on the number of live births that did not result in a person attaining adulthood.
All moving to 80 does is flood the disability system.
Anon 11:07 good point. Those who can't wait until 80 should just automatically file for SSD/SSI when they turn 60 or so. The Grids would probably apply to the vast majority of 60 or above.
Assume they will then get rid of the Grids or move the age back. I believe the Grids probably should be pushed to at least 55. But not any more.
Be careful what you wish for. Unintended consequences.
Been waiting for this, anyone that is not a Boomer has been expecting this.
ReplyDeleteOnly someone who lives off investments, and has never worked anything but an executive job given him/her by daddy, would suggest this.
ReplyDeleteTranslation: Forbes contributor thinks SS should be abolished but doesn't have the guts to say it.
ReplyDeleteContext is important.
ReplyDeleteIt is true that when the Act was enacted the retirement age was 3.3 years greater than life expectancy. Applying that to today's population, that would set retirement age at 82. I'll even add, benefits have vastly increased, from $22.71 ($408.31 adjusting for inflation) in 1940 to $1,413 in 2018, an increase of 246%.
As such, it could appear cuts would only be a return to normalcy. However, that ignores the economic reality of healthcare costs in the modern economy, which hits retirees disproportionately. It also ignores the cap was originally $3000 ($53081.88 after inflation) yet is currently only $106,800, an increase of 101.19%, but well short of the 246% increase in benefits.
Also, the author's suggestion that raising the retirement age would create a social benefit is specious. The proposed change would not reduce the social stigma of age, by eliminating the individual's receipt of old age benefits as the two concepts are distinct. Even assuming the stigma of age were removed, that would be a massive economic loss due to the huge influx of workers into the workforce. Supply and demand (of workers) suggests this would reduce wage growth, a result directly adverse to the economic strength of the trust funds, which the author claims is his concern.
Now we know why he didn't make it as a social worker. Also he buries a very telling statment to paraphrase 'ss was based on the presumption that most people would die before they were eligible to collect'. Now 80 seems like a good idea when that is one of the presumptions. What kind of person thinks like this. Can't wait for him to get old.
ReplyDeleteFurther, for all you youngsters or trolls, ss will be here for you. A income cap adjustment will make it even stronger.
Glad someone is talking about the problem, 2034 is not that far off. We are cashing in the Greatest Generation's excess contributions and borrowing to repay those loans so the millennials will have to pay it back! Sad situation, we need more fica payors, higher cap, higher rates and the sooner the better. No one ever complains about the cap going up. So start there.
ReplyDeleteFYI, the current cap is $132,900.
ReplyDeleteThe Forbes contributor is absolutely clueless on original coverage provisions and reasons for changes in the Social Security Act.
Only basic wage workers were originally covered, not the self-employed or government workers. Wages at the time were stagnant because of the depression. The constant changing of the benefit calculation reacted to changes in the national economy and were based on the growing wages of the baby boomers thanks to the rapidly growing U.S. economy. In fact, all benefit amendments expanded benefit payments as well as disability benefits up until the 1977-1978 amendments.
The contributor's argument is also treating Social Security as a business instead of a social benefit. People's attitudes change. We no longer want people working in pain and suffering up until their death. We no longer want people being unable to work and having to wither away and die in the streets. Entire industries generate billions based on how we treat the elderly now. His goal of raising the retirement age only serves to further reward the wealthy as it is both confirmed by correlation and causation that the wealthy have access to better healthcare and longer life expectancy.
The only thing that may need to be considered at this point as a new benefit computation method. The current one has been in use for 40 years and has lasted the longest of them all. That does not require making absurd expectations that everyone is capable of working to 80 or raising the retirement age to 80 for the sole purpose of prevent workers from becoming eligible.
Sounds like a plan. Raise the retirement age to 80 and suddenly heart disease, arthritis and strokes are eliminated
ReplyDeleteFormer social worker, current retirement planner, he seems to be quite shit at both.
ReplyDelete"Forbes contributor" is basically a synonym for "message board user". They'll post any kind of tripe from people who submit it. This isn't a professional column.
One study recently reported that the majority of workers over 50 who had been terminated during the great recession went back to work at wages that were at least 10%% less then what they'd been paid in their previous jobs. Imagine what employers would pay an 80+ worker.
ReplyDeleteWow,
ReplyDeleteA tremendous amount of stupid.
His argument is based on the premise that old people are old because they get SSA. Don't give them SSA and they will stay youthful and keep working forever.
Moron.
That old chestnut about shorter life expectancy when Social Security was created is misleading. A lot more people died in childhood then. And a lot more people died in their prime working years, so that (with advances in medicine) they're working longer as well as retiring longer. As explained here, the relevant number is life expectancy after attainment of adulthood: https://www.ssa.gov/history/lifeexpect.html.
ReplyDeleteAnd when Social Security was created, fewer women did paid work...a fact that that's conveniently absent from the Forbes article.
What an idiot.
Mr. Laura's opinion has little weight because he doesn't address the real world issues. What are those? Do people on reaching the current retirement age, still tend to have declined in the physical and mental abilities needed to sustain full-time unskilled work? Next, is their ability to acquire skills limited compared to younger people? Finally, does that on average as a group make them uncompetitive in the labor market?
ReplyDeleteMostly the answer to all three is yes, meaning it would be inhumane and defeat the purpose of Social Security to raise the retirement age. Sure you will find some exceptions, particularly among people who did not need to abuse their bodies too badly in their working years, and those blessed with a good education, skills, and wealth (a group likely over-represented in the Forbes magazine readership).
Recognizing what happens when humans age for purposes of setting a Social Security retirement policy does not mean you are engaging in improper age discrimination, as Mr. Laura suggests ("ageism"). I wonder if the irony of his ageism claim is lost on Mr. Laura. Claiming to want to benefit those 65+ years old, he proposes something that would likely make many of them suffer and hasten their demise, e.g., taking away the financial security needed to meet their basic needs in years that they are no longer able to earn a living through work.
80 is out of reach, but 70 seems like the real number they are shooting for with a change of early retirement to 65.
ReplyDeleteThe big one will be when they change Medicare, you can move retirement ages around, nobody will care to terrible much, but it is Medicare that makes retirement as many will use this as primary health insurance. You don't have to touch retirement age if you move Medicare eligibility to 67, 68 or even 70. People will have to work to stay insured.
Agree with @10:19. Raise or eliminate the cap on the amount taxed. The retirement age is high enough.
ReplyDeleteSo this so-called expert really does not want anybody to collect SS. He even stated 62 was picked because life expectancy was around 61 back then. If this was the plan, then why call it Social Security? Just call it a forced tax on the working.
ReplyDeleteWhat is ironic is he has articles stating that older financial advisors are no good and outdated and need advisors themselves
ReplyDelete@5:58
ReplyDelete"The hope behind this statute is to save men and women from the rigors of the poor house as well as from the haunting fear that such a lot awaits them when journey's end is near."
As others have noted, the life expectancy being so much lower was in large part based on the number of live births that did not result in a person attaining adulthood.
ReplyDeleteAll moving to 80 does is flood the disability system.
Anon 11:07 good point. Those who can't wait until 80 should just automatically file for SSD/SSI when they turn 60 or so. The Grids would probably apply to the vast majority of 60 or above.
ReplyDeleteAssume they will then get rid of the Grids or move the age back. I believe the Grids probably should be pushed to at least 55. But not any more.
Be careful what you wish for. Unintended consequences.
Seeing as the "rich" live much longer and healthier lives (that is a fact), they will be the only ones collecting. Talk about GREED!
ReplyDelete