Network News

X My Profile
View More Activity

More on raising the retirement age

Larry Mishel writes in with another argument for why raising the Social Security age makes much more sense for affluent individuals who work in knowledge-oriented industries than for lower-income people whose jobs require more physical labor. If the argument is that life expectancy is rocketing upwards, and that retirement shouldn't grow along with it, it's important to point out that the increases in life expectancy aren't being shared equally:

lifexepectancyss.jpg

Something to think about. I'd add a few other points. First, at what age do you want to retire? I'd imagine most affluent workers would pick a number higher than 62. A lot of us like what we're doing, and sitting in an office chair isn't much harder on our bodies than sitting in a chair at home. But that makes us abnormal. The average retirement age is 62 -- which is the earliest you can qualify for Social Security, and means your monthly payments are reduced. So most people are choosing smaller Social Security checks if it means they can retire earlier. We should think hard about what that means.

Second, you often hear that if we raise the FICA cap so that wealthier individuals have to pay more for Social Security, they'll start putting a lot of time and energy into tax avoidance. But it's similarly predictable that an increase in the retirement age will lead to more people going on disability. I don't know if that will be more or less expensive than tax avoidance, but it's worth considering.

Finally, a fair number of elderly leave the labor force because their job disappears, and hiring discrimination against older workers is rampant. If we're going to increase the age at which these folks can get full Social Security benefits, we'd better figure out some solutions to make it easier for them to keep working.

By Ezra Klein  |  July 8, 2010; 4:08 PM ET
 
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Research Desk summarizes: How does the world finance elections?
Next: OMB, ACA, CBO and the deficit

Comments

Interesting that the early retirement age (62) was not changed when the age for full benefits was raised - since the reduction in benefits for early retirement is supposed to be enough so that the expected value of your full lifetime stream of benefits is the same as it would be if you retired at full retirment age, that would mean that an increase in the full retirement age would either require an even greater reduction in the size of monthly benefits for early retirement or an increase in the early retirement age.

Posted by: exgovgirl | July 8, 2010 4:30 PM | Report abuse

I want to know where the jobs for the next generation are coming from if we force older workers to remain employed until 70. Won't that just make the employment situation it the US worse? There are only so many greeter jobs at walmart...Is it the goal to exploit older near retirement workers the way we exploit teenagers?

Posted by: srw3 | July 8, 2010 4:36 PM | Report abuse

One more point re increase in retirement age vs. increase in earnings cap. All the focus is on how life expectancy has changed and therefore retirement age should rise, but you hardly ever see any comment about how the earnings cap has not kept up with increase in incomes - it was originally supposed to be set at the 90th percentile of the earnings distribution (i.e., 90% of earners should be paying SS on all of their income) and I think its slipped well down into the 80th percentile, maybe lower. Just raising it to the 90th percentile again would solve at least part of the problem, without giving the masters of the universe on Wall Street a case of the vapors. (BTW, I never have understood why they seem to need so much more incentive, in the form of lower tax rates, to sit on their 'brains' and push money around, while presumably the guy on a garbage truck is not 'disincentivized' by having to pay full FICA on every cent he earns.)

Posted by: exgovgirl | July 8, 2010 4:36 PM | Report abuse

How cute that someone in his 20s thinks working to age 70 is a desk job would be easy! I retired at 58 from a desk job which I basically liked, but liked less and less as time went on because the work and I were both changing, and was happy to get out when I did. I did so for a variety of reasons, but the bottom line was I could afford to because I would get a pension (gov't) and had gotten a small inheritance when my father died.

I have several times raised the question whether people born after 1960, the ones who would have their full benefit age raised, will really have a rising life expectancy. Do we really believe that obesity and poor diet will have no effects? That cumulative chemical and other pollution and climate change will have no effect? That cancer will really be curable with simple anti-biotics and anti-infection measures?

Furthermore, as many, many people have pointed out, working after 50 or 55 is problematic unless you are self-employed, and if you become unemployed at that age it is pretty well for life. What then?

Once again, just why is it that we are even having this conversation when we know that Medicare is the problem and that SS really isn't a problem? Could it be that it is a way to deflect from discussing raising the wage cap?

BTW, Geithner apparently told CNBC that dividend and cap gains taxes would stay low. Are they really going to raise the top two brackets? Maybe raising the wage cap or applying it to investment income for people not already on SS would make sense too.

Posted by: Mimikatz | July 8, 2010 4:37 PM | Report abuse

@exgovgirl - According to this source
http://en.wikipedia.org/wiki/Personal_income_in_the_United_States
the current wage cap fully taxes more than 90% of individual earners. The cap has historically risen pretty rapidly. It roughly tripled during the 1970's, then doubled between 1980 and 1990. Since 1990 it has doubled again. So are people who propose raising the cap aware that it has historically been steadily increased at or above inflation?

Another point that I think gets missed is that while there is no SS tax on income over the cap, there is also no retirement benefit on income over the cap.

Posted by: tl_houston | July 8, 2010 4:52 PM | Report abuse

I concur wholeheartedly with everything you're saying here. People in jobs that involve physical labor understandably usually wish to retire as early as is practicable. Those with creative or stimulating jobs that are not physically stressful usually want to keep working as long as they are able. This could include academics, people in the arts or advertising, etc. I don't think "desk job" is a particularly accurate descriptor, however: people with boring, stressful pencil-pushing desk jobs probably want out if at all possible.

The issue for all these groups, however, is ability to retain their job until Social Security sets in, or sufficient money to live without a steady income before that. As we see increasing numbers of 50-somethings losing their jobs and failing to be hired into new ones, the real danger here is prolonged periods of economic hardship for "middle-aged" Americans.

I have little fear, however, that the retirement age will be raised to 70: the public outcry would be massive and harsh ... from both workers and employers.

Posted by: JJenkins2 | July 8, 2010 5:00 PM | Report abuse

--"We should think hard about what that means."--

Why don't you mind your own business, Klein, and worry about your own retirement on your own dime, instead of trying to fit an entire country's worth of people into your incompetent one size fits all vision? You spend your life trying to finagle your way around one government induced disaster after another, always seeking that next government "solution" that won't work.

The promise of a free country was that people could conduct their lives like adults, without having the government constantly looking over their shoulders and ordering them about, willy nilly. You are complicit in destroying the charter upon which the country was founded.

Posted by: msoja | July 8, 2010 5:05 PM | Report abuse

means test it.

Posted by: NoVAHockey | July 8, 2010 5:10 PM | Report abuse

Is it out of the question that everyone but the poorest provide for their own retirement? Someone convince me that old millionaires should receive Social Security benefits.

Posted by: kingstu01 | July 8, 2010 5:32 PM | Report abuse

1. I've spent the past 40 years working and therefore making "contributions" to social security. For the entire period, I've had to listen to progressives tar as a heartless creep anyone who pointed out the simple fact that ultimately we would not be able to afford the promises being made about social security. Now that it has even become clear to people as nuanced as progressives that we can't afford it, what do they want to do? Raise my taxes. Big surprise, that.

2. We as a country have made promises we cannot afford to keep. If we do raise taxes, we should raise them across the board on all tax payers. There is no rationale whatsoever for restricting the tax increase to people who earn above a certain income.

3. Perhaps we should impose a tax on all those people who pretended, or were stupid enough, to believe we would be able to afford the program as promised.

Posted by: ostap666 | July 8, 2010 5:48 PM | Report abuse

Look, we spent the last 30 years enjoying tax cuts paid for on the backs on social security revenues. There's no shame in raising income taxes now to pay for social security promises made 30 years ago. People enjoyed the last 30 years of low income taxes and the waging of wars and the like, and by all accounts they had an excellent time of it, and without the creation of the SS trust fund and the use of increased SS tax revenues, none of it would have been possible. Like my mother taught me, you have to pay your bills when they come due, so there shouldn't be any reluctance to simply make some budgetary and revenue adjustments to pay for the current obligations. I don't see why this is controversial.

Posted by: constans | July 8, 2010 5:57 PM | Report abuse

@kingstu01 : Is it out of the question that everyone but the poorest provide for their own retirement? Someone convince me that old millionaires should receive Social Security benefits.

That's how it was until social security came along. The rate of poverty among the elderly was much higher than it is now. SS is what keeps most elderly people from being the poorest. It has become a part of our culture that the govt has a role in insuring that the old and the disabled are not left in grinding poverty.

Do millionaires deserve social security? No, but the structure of social security is that if you pay in, you get something out. I would support reducing the benefit for those over a certain net worth, but cutting them off will just make SS a much less popular program more susceptible to cuts in the future if everyone isn't included.

@msoja: The promise of a free country was that people could conduct their lives like adults, without having the government constantly looking over their shoulders and ordering them about, willy nilly.

I guarantee that the government will not order you to spend your social security check if you don't want to. I don't see the govt ordering me about any more than is necessary. I think that it is a good idea to obey traffic signs, whether the govt is ordering me to do so or not.

Posted by: srw3 | July 8, 2010 5:59 PM | Report abuse

re tl_houston: SSA benefits are progresive. So, if you increase the tax max and cover those earnings it will still result in more money going into the program than going out.

Also, I'm pretty certain that exgovgirl is correct and the percent of earnings subject to SSA taxes is lower than it used to be.

Posted by: ideallydc | July 8, 2010 6:00 PM | Report abuse

"If we do raise taxes, we should raise them across the board on all tax payers. There is no rationale whatsoever for restricting the tax increase to people who earn above a certain income."

This argument is absurd. A CEO who makes a salary of a million dollars a year pays the Social Security tax on earnings in January and early February and is then off the hook for the remainder of the year. A worker in the same company earning anything under six figures pays the tax all year long.

The idea of lifting the cap is not to "restrict a tax increase to people above a certain level," the idea is to tax ALL people at ALL levels at the SAME rate, and to stop requiring the poor and the middle class to give up a much larger percentage of their annual income than the rich in order to support Social Security.

Posted by: Patrick_M | July 8, 2010 6:03 PM | Report abuse

"First, at what age do you want to retire?"

I've only worked as a waitress and for myself and I cannot see waiting tables when I am 60, let alone 70.
My husband works a very physically demanding job and we were talking the other day about what he was going to do when he could just no longer do it (or his cancer came back and made it impossible to do the job he does now) and how we would survive till SS kicked in.
I remarked the the cats seemed to really like their food....

Posted by: vintagejulie | July 8, 2010 6:10 PM | Report abuse

There is much talk about SS when this program can pay full benefits for 30 years and 75% of benefits after that. We don't need a huge change in the program to keep it solvent for the foreseeable future. just by raising the income cap so that the wealthy pay a bit more for their benefits doesn't seem like a difficult decision. After all Reagan raised the payroll tax and "fixed" social security while giving a huge tax cut to the wealthy. I don't see why the wealthy can't give a little of that back. Why is this so hard to understand? Medicare OTOH is a problem that needs to be addressed sooner than later.

Posted by: srw3 | July 8, 2010 6:18 PM | Report abuse

Ezra,

I think ti_houston hits the drawback of raising too much the amount of money subject to payroll taxes -- that at some point, the replacement ratio for upper-income individuals will be too low such that the probability of the actuarial present value of contributions will exceed the actuarial present value of benefits. For those whose 35-year average wage-inflation-adjusted incomes are below $9,132/yr., Social Security replaces 90 percent of their 35-year average wage-inflation-adjusted income. For those whose 35-year average wage-inflation-adjusted incomes equal $50,000/yr., Social Security replaces 42.59 percent of their 35-year average wage-inflation-adjusted income. For $100,000, this figure is 29.58%.

If we raised the cap to $180,000/yr., and credited these contributions towards benefits at the 15% marginal benefit level, then someone earning $180,000/yr. would pay a 12.4% FICA tax, and have a 23.14% replacement ratio. I mean -- at some point raising the cap by too much will give a high-income beneficiary too high a probability of of net loss. And then support for the program collapses.

Posted by: moronjim | July 8, 2010 6:24 PM | Report abuse

NoVAHockey,

"means test it."

This will reduce incentives to save, and Americans already don't save much (despite the recession). It will likely also reduce political support for the program.

Kingstu01,

"Is it out of the question that everyone but the poorest provide for their own retirement? Someone convince me that old millionaires should receive Social Security benefits."

It's mostly political. If the program only helps the poor it becomes a welfare program and lose political support. Also, means testing can reduce the incentive to save, depending on how the benefits are phased out.

Constans,

"Look, we spent the last 30 years enjoying tax cuts paid for on the backs on social security revenues. There's no shame in raising income taxes now to pay for social security promises made 30 years ago. People enjoyed the last 30 years of low income taxes and the waging of wars and the like, and by all accounts they had an excellent time of it, and without the creation of the SS trust fund and the use of increased SS tax revenues, none of it would have been possible. Like my mother taught me, you have to pay your bills when they come due, so there shouldn't be any reluctance to simply make some budgetary and revenue adjustments to pay for the current obligations. I don't see why this is controversial."

Shouldn't the people who actually got the lower tax pay the bills? The people who got to enjoy the last 20-30 years with high incomes are now in their 50s and 60s and 70s. Many are already on Social Security. I don't see why it is fair to raises taxes on the guy who is 34 years old and making $200,000/yr - as fortunate as that is - so that he can fund the retirements of his predecessors who got a free pass. The controversial part is that Gen-X and the Millenials are going to see higher taxes in order to pay for Boomer benefits when, as you say, Boomers were irresponsible.

Posted by: justin84 | July 8, 2010 6:52 PM | Report abuse

"I mean -- at some point raising the cap by too much will give a high-income beneficiary too high a probability of of net loss. And then support for the program collapses."

Suppport would only "collapse" among the wealthy few who foolishly see the program as a personal investment vehicle, rather than as "social security."

Certainly a miserly minority won't support the program if they think it conflicts with their self interest, just as a miserly few childless homeowners resent paying property taxes that support their local school system. But everyone benefits from living in a community with good schools, and everyone benefits from living in a society where people at lower income levels can look forward to retiring from a lifetime of work at a reasonable age without fear of plunging into extreme poverty.

Wealthy people have derived benefits from the labor of the less well-off in society, and the rich can well afford to help support the safety net for the less fortunate during their retirement years.

Posted by: Patrick_M | July 8, 2010 6:52 PM | Report abuse

Msoja,

"Why don't you mind your own business, Klein, and worry about your own retirement on your own dime, instead of trying to fit an entire country's worth of people into your incompetent one size fits all vision? You spend your life trying to finagle your way around one government induced disaster after another, always seeking that next government "solution" that won't work."

What's your solution when liberals point to stories like someone who is 53 years old, out of work for three years and who has been eating into their 401k savings?

On one hand, had they been able to live in a low tax country during their first 50 years perhaps they'd have a lot more savings to rely upon, and jobs would be more plentiful. On the other hand, we can't go back in time and change the past.

I don't think we'll ever see political support for 'on your own dime'. What is the next best thing to do?

Posted by: justin84 | July 8, 2010 6:55 PM | Report abuse

patrick_m: is it your viewpoint that instead of a forced savings plan to rectify adverse selection issues in annuities markets (a main policy behind ss from the beginning), social security should just be a welfare program for the elderly?

moronjim: i find analyzing internal real rates of return directly more helpful than replacement rates...and these real IRRs are already dismal for high earners.

Posted by: stantheman21 | July 8, 2010 7:06 PM | Report abuse

justin84: "I don't think we'll ever see political support for 'on your own dime'."

Relying on political support is what created the sundry messes growing up around our ears.

There is no next best solution. There may be temporary fixes, but the general march of events will continue downward, until the hole we're in is too deep to do anything about.

I believe the country is too awash in stupidity and incompetence for there to be any other course than the headlong one we're on. I merely try to leave a clue or two for those who might have inklings.

The intelligent thing would have been to have never started the Social Security Ponzi scheme. Once that stupidity was embraced, one need only refer to Franklin: "They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."

The man eating cat food out of the 401k that the government sees fit to *allow* (in a free country!) him to have is reaping the just desserts of Franklin's wisdom.

Posted by: msoja | July 8, 2010 7:35 PM | Report abuse

--"Wealthy people have derived benefits from the labor of the less well-off in society, and the rich can well afford to help support the safety net for the less fortunate during their retirement years."--

How perfectly generous of you to decide that for them, Patrick.

And when do the rich get to decide what to do with your buffoonish collectivist self?

Posted by: msoja | July 8, 2010 7:47 PM | Report abuse

"patrick_m: is it your viewpoint that instead of a forced savings plan to rectify adverse selection issues in annuities markets (a main policy behind ss from the beginning), social security should just be a welfare program for the elderly?"

I believe that the primary purpose of the program is to provide a guaranteed baseline income for elderly Americans. The program is now looking at a temporary and rather minor shortfall (decades ahead) because of a temporary bubble in demographics. So my view is that if there is a choice to be made between curbing benefits to those who have paid into and relied upon the system, or raising the cap for as long as needed to properly fund the program, I will opt for the latter.

If such a reform causes others to see social security as "welfare" rather than as "forced savings," so be it. Call it what you will, I will continue to define it simply as "social security" (society providing a very small measure of retirement security to its citizens).

I think we do far less violence to the underlying purpose of the program by raising revenue than we do by removing benefits.

If we raise the age of retirement, or in some other way scale back what is already a very modest benefit, we will certainly incur other costs in other programs like unemployment and disability payments, food stamps, and other forms of public assistance.

We have the means to maintain social security, and our people will rightly expect and demand that we keep the promises that have been made.

Posted by: Patrick_M | July 8, 2010 8:12 PM | Report abuse

With the vast resources at your command at the Washington Post, can you get data newer than 2001?

Posted by: Richard722 | July 8, 2010 9:29 PM | Report abuse

Ezra,

Here’s some interesting info on this from the usually reliable source bankrate.com:

If you work and are under full retirement age for the whole year, the government deducts $1 for every $2 you earn above the annual limit; the limit was $12,000 for 2005. In the year you reach full retirement, it deducts $1 for every $3 you earn above a different limit: $31,800 in 2005. Once you reach full retirement age, you may earn as much as you like without loss of benefits…There is another compelling reason that keeps people working between 62 and their full retirement age: health coverage. "The primary deciding factor for people retiring, or not retiring, is not Social Security, but health care. Basically, the sign is, 'Will work for health insurance,'" says Carney.

at: http://www.bankrate.com/brm/news/pf/20050920a4bb.asp

Then Wikipedia, with the OECD as the source, shows only 20% of Americans age 65-69 are employed, less than I thought, and only 5% over 70 (but that can be misleading. It might be 15% age 70-75, and then it plummets after that).

at: http://en.wikipedia.org/wiki/Retirement

So it’s something to think about. How many people really can work after 62 or 67. The thing is, the highest earning ones who add the most to GDP are more likely to; that’s what your chart shows; so even if it’s 30%, it’s a very productive 30%.

But yes, you need to have the related issues taken care of well to do this – strong age discrimination laws with strong enforcement, exceptions for those not capable of working, required extra sick days and optional lower hours offered for elderly workers, and more. It might be nice to have a compromise where you include these kinds of protections, and phase out benefits for the extremely wealthy, and lose the cap on the payroll tax, in exchange for a rise in the benefits age.

Richard H. Serlin

Posted by: Richard722 | July 8, 2010 10:10 PM | Report abuse

If so many higher earners want to work to 70, couldn't we institute some higher SS benefit if you work until 70, paired with raising or eliminating the tax cap?

Posted by: MosBen | July 8, 2010 10:20 PM | Report abuse

"If so many higher earners want to work to 70, couldn't we institute some higher SS benefit if you work until 70, paired with raising or eliminating the tax cap?"

If Bill Gates or Warren Buffett wish to work until the age of 70, are they more deserving of a bigger monthly check than the Microsoft janitor or Berkshire janitor with an aching back who works until 67?

Does it make sense for use to send bigger checks to those least in need?

Does the measly social security check of any well-invested wealthy individual even make a serious dent in their own thinking about when to retire?

Posted by: Patrick_M | July 8, 2010 10:38 PM | Report abuse

Sorry, it is very late where I am. Meant to say:

"Does it make sense for us to send bigger checks to those least in need?"

Posted by: Patrick_M | July 8, 2010 10:47 PM | Report abuse

One of the other problems with raising the retirement age is the workforce is not really setup to keep older workers working. In this recession, older workers have a harder time finding jobs. At most large companies if they have layoffs often it is older workers who are pushed out the door because they are more expensive. If we delay when people can retire, we need to have systems in place to allow them to work. Some is cultural - companies should want experienced folks, not push them out - but that is not how we are setup.

Posted by: iag4 | July 8, 2010 11:29 PM | Report abuse

in 1930, 54% of men over the age of 65 participated in the workforce

in 1950, this percentage was down to 45.8%

by 2008, the percentage was down to 17%.

while there are obviously numerous factors involved here, most public fiscal economists acknowledge that social security has played a huge part. See Public Finance by Harvey S. Rosen, Ted Gayer (seminal textbook on public fisc issues, concluding that SS "depresses both saving and work effort" but also stating that this might not be a bad thing depending on your views on income security/leisure for the elderly etc).

I thought these numbers were interesting...

Posted by: stantheman21 | July 9, 2010 1:31 AM | Report abuse

What you know about Cholesterol may be wrong. Does High Cholesterol REALLY Cause Heart Disease? http://bit.ly/d454ZR

Posted by: henryjose09 | July 9, 2010 2:56 AM | Report abuse

Justin84 "The controversial part is that Gen-X and the Millenials are going to see higher taxes in order to pay for Boomer benefits when, as you say, Boomers were irresponsible."
Just how were we irresponsible ? Take a look at the Senate. How many are Boomers and how many have been serving for the last twenty years. Who has controlled the misuse of SS taxes and how are Boomers responsible ? We've supported a SS system for 40+ years and now we have had pensions eliminated. Those who are young have lots of time to make up for lack of a pension (if employed)but many of us in our fifties had the system change when we were close to forty or older. We've had to endure several recessions which have damaged our retirement hopes. And now SS is being challenged when it is really not the problem. Medicare is the problem. SS can be easily fixed by raising the top income for witholding and by changing the index for increasing. Done, fixed. The big problem with early retirement is healthcare as has been stated. What if you can't work and have no healthcare ?

Posted by: Falmouth1 | July 9, 2010 7:35 AM | Report abuse

"Take a look at the Senate. How many are Boomers and how many have been serving for the last twenty years."

Just out of curiosity, I looked it up. There are a lot of Boomers in the Senate but most are in their first or second term. There is one, Kent Conrad, who has served for over 20 years.

There are 12 Boomers who are beyond 12 years (2 terms).

Posted by: tl_houston | July 9, 2010 9:58 AM | Report abuse

--"Does it make sense for us to send bigger checks to those least in need?"--

It's ostensibly their money, Patrick, or have you forgotten that small item?

Or are you admitting that it's all just another naked redistributionist theft?

Posted by: msoja | July 9, 2010 12:18 PM | Report abuse

Falmouth1,

"Just how were we irresponsible ? Take a look at the Senate. How many are Boomers and how many have been serving for the last twenty years."

To begin with, I was responding to
-----------------------------------------
"People enjoyed the last 30 years of low income taxes and the waging of wars and the like, and by all accounts they had an excellent time of it"

and

"Like my mother taught me, you have to pay your bills when they come due".
------------------------------------------

I am merely pointing out that the people who enjoyed the fruits of the irresponsibility for the last thirty years are not the people who are being asked to pick up the tab. People who were able to enjoy the period of irresponsibility, as implied by the previous poster, are now several decades older, many about to retire.

So the boomers didn't have to adequately fund the government during their peak earning years, and now the bag is being handed to the younger generations.

In any case, the make up of the Senate means little - we don't live in a dictatorship. Baby boomers were the largest voting bloc since at least the early 1980s. If they didn't like the deficits of 1980-1996 and 2002-present, they should have thrown the bums out.

For that matter, if they had children at replacement rate - 2.1 per woman vs. 1.7 or 1.8 during the baby bust - we wouldn't need to hike taxes for SS.

"We've supported a SS system for 40+ years and now we have had pensions eliminated. Those who are young have lots of time to make up for lack of a pension (if employed)but many of us in our fifties had the system change when we were close to forty or older."

Yeah, like the people who started working in 1996 and are now in their mid 30s already. They've seen stellar market returns. They have no pensions either. Conversely, anyone who started saving in the 1970-1985 range should have decent returns despite all that has happened, especially since everyone is told that as you get older you should switch into bonds, which have been in more or less rally mode since 1982. On top of that, the young are having a much worse time of this recession than the old. Unemployment rates for the under 35 crowd are in the 12-13% context, vs 7-8% for those above 35
http://www.bls.gov/web/empsit/cpseea10.pdf

But don't worry about potential problems with social security. Now that the boomers are retiring, we can make sure the system is solvent by raising taxes on the schmucks in the younger generations.

"SS can be easily fixed by raising the top income for witholding and by changing the index for increasing. Done, fixed."

This reads to me as saying SS can be easily fixed by raising taxes on younger people in the upper middle class (the wealthy don't pay FICA on their capital income) and cutting their benefits. Why do younger generations have to pay for older ones because they did not fund the system adequately, nor save enough for their retirement?

Posted by: justin84 | July 9, 2010 1:40 PM | Report abuse

Ezra,

I'm interested in a graph, much like the one you posted, but containing 1930 numbers as well... I'm guessing it wouldn't look all that much different... or at least the disparities in income and expectancy would be very much prevalent. If that was the case, that is to say, if pre-implementation disparities were not much different than 1972 and 2001 (post-implementation) disparities would we still expect this graph to say anything at all about the social security retirement age? Since the wealthy will always 1) not often perform manual labor as a career and B) have access to high quality health care as a rule... and, as far as 2001 goes, access to a well funded 401(k)... well, the graph doesn't really tell us all that much, does it?

The goal of social security... it's purpose... it's raison d'etre... is anti-poverty. This is not the same thing as pro-wealth. The prevention of cat-food consumption is the goal, not the increase in leisure time or even life expectancy. So if the SSI implementation is successful (and I believe it is...) the gains in the lower income distribution can be attributed to SSI. Gains and benefits in the upper income distribution cannot be correlated with SSI implementation and, indeed, can be explained by other factors independent of SSI.

So. you are right when you say we are a far richer country now, than we were upon implementation. That's not the same thing as saying we are without poverty. So, to remain focused on anti-poverty, and to prevent the mission-creep so prevalent in this argument, we ought to raise the retirement age, if under some voluntary or means-tested manner, in such a way as to keep the most benefits going to the poorest recipients.

poor people do everything poorly: they drink a lot, and they drink the poorest quality alcohol available. They smoke a lot, and they smoke the cheapest available tobacco products (some of which barely has any tobacco in it...) They eat the cheapest foods and often have to live in an environment ill-suited to optimal health (poor heat in winter, poor circulation in summer...) And they often have to spend a lifetime in the jobs that break their backs and grind their bones, with little in the way of compensation and often nothing in the way of health care.

Social security was (is) a great anti-poverty measure, but let's not fool ourselves that the job is done with sophistry about leisure time or what affect it (may have) had upon the wealthy...

Posted by: swedock | July 9, 2010 2:14 PM | Report abuse

It is a stretch to blame the boomers. There may have been more boomers voting, but the votes deciding who would be president have not been very many. Those of you who are in your 30s and 40s could have changed the outcome of the votes as easily as the boomers could have.

The boomers and anyone else who pay into Social Security (FICA) out of every paycheck have acummulated 2.5 trillion extra to help pay for the boomer's retirement, so we wouldn't be a burden to the younger workers.

I can't believe some say we didn't pay for our own retirement when Social Security is most of our retirement. Most will have paid in for 45 years when they retire. If you went to work at 20 and retired at 65 that would be 45 years.

Since wealthy people live longer and receive more years of Social Security, maybe we should raise their full retirement age or cut their benefits.

Posted by: Sheclipse | July 10, 2010 1:42 AM | Report abuse

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company