Don't Plan On Working On And On

     From CNBC:

A stark reality of retirement planning is that your future is riding on the quality (read: plausibility) of your assumptions. Abject optimism can be dangerous. ...

[A] potential flawed assumption is that you will be able to keep working past 65. Yet the recently released 2017 Retirement Confidence Survey by the nonpartisan Employee Benefit Research Institute finds that more than half of workers say they expect to still be on the clock past age 65. By comparison, less than 15 percent of today's retirees kept working that long. ...

It's simply too risky to assume you will indeed be able to work longer. A survey by the Transamerica Center for Retirement Studies (TCRS) found that nearly two-thirds of retirees left the workforce earlier than expected because they were laid off, reorg-ed out of a position, or due to general unhappiness with a job. Only 16 percent of retirees who exited the work force earlier than they expected did so because they felt they could financially afford to.

Moreover, a new report from Prudential puts a dollar value on why your current employer may not be inclined to do back flips to keep an older you happy and engaged. The estimated one-year cost to a firm when an employee delays retirement: $50,000. ...

     And they're not even mentioning the effects of health conditions on retirement decisions.
     Raising full retirement age to 67 was a bad idea. Increasing it further would be a terrible idea. People need security in retirement and Social Security is the only assurance that the vast majority of Americans have or will ever have.

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Comments Will Now Be Moderated

     It's become apparent to me that most of the comments posted on this blog are now coming from two sources, paid shills and cranks. The shills bother me worse than the cranks. When I see multiple comments filed at 3:30 in the morning all saying that government employees are lazy, Social Security is horribly inefficient and its management is corrupt, I'm pretty sure it's been posted by paid shills who are seeking to undermine funding for Social Security. Russia isn't the only one who employs these shills. It's a cheap way to influence public opinion. Trump's election suggests that it can make a difference. Yes, I do believe the Koch brothers and others are this devious.

     I will now moderate the comments. If you submit a comment, it won't be posted until I have reviewed it. I'll try to act on the comments promptly but I'm not making any promises on the time frame. I have a life. I'm going to reject repetitive or abusive comments. I'm not planning to censor them otherwise. It's my blog so I get to make the decisions. I'd be delighted if others would start their own Social Security blogs. Many voices should be heard.

Life Expectancy And Retirement Benefits

     The National Bureau of Economic Research has done a study on increases in life expectancy and retirement benefits in the United States. A few years ago when this study was begun there was much talk of increasing the full retirement age for Social Security benefits. That talk has mostly died away. It's politically impossible now. It's hard to imagine it becoming politically possible in the foreseeable future. Perhaps the least unlikely change would go in the opposite direction -- lowering the age limit for Medicare from 65 to 50 or 55. There is a fair chance of that happening should Democrats control the White House and Congress after the 2020 elections or even if Democrats control Congress after the 2018 elections.

     The study points out what was already well known, that while there has been an increase in overall life expectancy, those with lifetime earnings in the lowest 40% are experiencing little or no increase in life expectancy. This is increasing the gap in lifetime benefits between those with the highest and lowest lifetime income by $130,000.     

     The study contains this interesting graph (click on it to see it full size):

     To explain this, the 1930 cohort is people born in 1930 and the 1960 cohort is people born in 1960. Quintile 1 is the 20% of people who have the lowest lifetime earnings while quintile 5 is the 20% of people who have the highest lifetime earnings.

     Note that there was essentially no change between the 1930 cohort and the 1960 cohort. People make silly arguments about how different generations of people are vastly different. I've never seen that. 

     Note that poor people are much more likely to draw disability benefits than wealthy people. It shouldn't be hard to understand why. The same factors that make people poor make them more likely to become disabled. Low cognitive abilities, low educational attainments and serious chronic mental illness all predispose to both poverty and disability. Also, poverty leads to poor health care access which also predisposes to disability. None of this has anything to do with rural versus urban poverty. There's just more poverty these days in rural areas than urban areas.

Glad This Didn't Happen Here

     U.S. Social Security has its problems but it does an excellent job of protecting data security. Look to India for an example of how things can go very wrong. Somehow, the names, addresses, bank account information, and Aadhaar number (the equivalent of a U.S. Social Security number) of 1.4 million Indians were posted on a Indian government website.

Still Livid

     Disability advocates remain livid about that Washington Post piece that wrongly suggested that any poor person could get Social Security disability benefits just by asking.

Why So Much Disability In Rural Areas?

     I'm not sure exactly what The Center for Michigan is but they have posted a long piece about the high rate of disability in poor regions of the state. You wonder if they, unlike the Washington Post, have their numbers right.

     As I've said before, the high rate of disability in poor rural areas is nothing new. It's been a prominent fact for me since I started in the private practice of law in 1979. It's where my clients are clustered. As I've also posted, I see nothing surprising in this. Younger, healthier, smarter, better educated individuals leave poor rural areas to find jobs in urban areas. The population left behind is on average older, sicker, less smart and less well educated. These are all factors that lead to higher rates of disability. People who live in poor rural areas have poor access to health care. Poor access to health care also predisposes to disability.

     The subtext of pieces such as this is that these people aren't really disabled; they're just poor. And all these poor people who aren't sick getting on Social Security disability just shows how lax the standards are. The solution, of course, is to tighten up on disability and enact policies which "grow" the economy. Of course, the best way to "grow" the economy is to cut taxes on the wealthiest Americans. I think virtually everyone actually involved in the Social Security disability process knows it's quite difficult to get on Social Security but that's not what people are hearing.

     By the way, pieces like this don't simply arise out of a reporter's curiosity. Whenever you see David Autor quoted, you can bet that a Washington think tank supported by Koch brothers money planted the piece. All these pieces seem like they come out of a cookie cutter which is why I sort of expect that the stats quoted might be wrong.

Pete Peterson Keeps Wasting Money

     The McCrery-Pomeroy SSDI Solutions Initiative, which is part of the Committee for a Responsible Federal Budget (CRFB), has issued a book containing "Ideas to Strengthen the Social Security Disability Insurance Program." 

     CRFB is officially bipartisan and has Democrats as well as Republicans on its board. However, it is closely affiliated with Pete Peterson who seems to have cutting Social Security as his primary goal in life. Peterson has huge wealth to support his mania.

     The book has been out for a month or two but has not been promoted, probably because there's little in the book that would actually bring about cuts in Social Security disability or which is practical.

     The book is a mishmash with each chapter by a different author or group of authors. For the most part, I'd say that few, if any, of the authors have ever met a Social Security disability claimant or recipient. It seems to mostly be "blind people describing an elephant" or perhaps describing how they would build a better elephant. I think that if the authors of this book had to actually try to help real, live Social Security disability claimants that they would be likely to say "Who knew disability could be so complicated?"
     One of the most important types of recommendation in the book is for "early intervention" to prevent disability. Roughly speaking, the idea is that if people can receive "early intervention" of some type after they become sick or injured, that reliance upon disability benefits can be avoided. I have no idea how this would work. I have no idea what the "early intervention" would consist of. More important, I'm pretty sure the authors don't have much idea how this would work or what the "early intervention" would consist of. I see no reason to believe that such "early intervention" would help any significant group of people. One of the authors is at least honest enough to tell us:

What is clear to me from all three papers in this section is that there is neither completed research nor an evidence base upon which to enact nationwide early intervention or work support programs. Additional study and evaluation will be needed to generate this evidence; certainly before making changes to the SSDI program.

      However, even this statement assumes that such evidence would be forthcoming if the "additional study and evaluation" is done. I think there's strong reason to doubt that.
     There already is a good deal of "early intervention" in workers compensation cases, at least where I am. All I've seen from that is heavy-handed pressure on claimants to resume work, even for brief periods of time, not because the injured person achieves any long term benefit but because it helps the employer's insurance company limit what it has to pay. I've seen no evidence that it has done anything to reduce reliance upon Social Security disability benefits. If there were such evidence, I think one of the authors of this book would be touting it.
     Otherwise, the book makes recommendations such as eliminating reconsideration, introducing some sort of government representative at hearings, encouraging private long term disability insurance, performing more continuing disability reviews, time limited disability benefits, partial disability benefits and changing the definition of disability. I'm not going to bother to discuss any of this since none of it could possibly be adopted at this time or at any foreseeable time in the future. Yes, for example, doing away with reconsideration would be nice but it would cost a lot of money since far more people would request hearings and hearings are more expensive so it's not going to happen. If you really think this is possible, you fail to understand the problems that Social Security has in getting enough money to continue its current operations much less more money to fund a more expensive version of its operations.
     Overall, when I read this book, I keep thinking the authors are nothing more than amateur dilettantes whose "advice" to Social Security policymakers is no more valuable than the "advice" I might give to the head coach of an athletic team I follow.