Friday, July 12, 2019

Just Six Years

     Not even all of six -- in January 2025, I'll be able to retire with full Social Security.  And don't think I won't take the Federal check, as long as it holds out: having been forced into contributing to FDR's* New Deal "safety net," I have paid in far more what I'll get back and as long as the system is still operating, I'd like to have that small return, thank you all the same.  That and my (tiny) IRA should get me by, assuming I live very frugally.

     If I hold out longer, Uncle Sam will allow me a little more -- but there's a catch:

      Present projections have the system's reserve assets crossing zero in 2034, with a choice after that of cutting benefits about 25 percent and running it right off the incoming tax, cranking up the retirement age (again), or increasing the payroll tax that funds it (to a chorus of, "Boomers ruin everything," from the generations still working).

     It's a race against time!  So why am I not in the least excited about it?
* Like most of the New Deal, this was a reaction to a more radical proposal; in this case, the Townsend Plan: elderly physician Francis Townsend was pushing the notion of paying every (non-criminal) retiree over sixty the remarkable sum of three hundred 1933 dollars every month, but they had to spend it all within thirty days.  That's around $3800 in 2019 dollars!  It was getting pretty popular, too; as ever, the trouble with the elderly is they have little to lose and plenty of free time.  Congress and President Roosevelt ginned up Social Security by 1935, a tearing hurry at Congressional speed, and headed off Dr. Townsend at the pass with a higher retirement age and a smaller payout.
     Alas, it's a pyramid scheme, and relies on population growth, inflation and a retirement age set late enough that a significant percentage of the prospective recipients die before receiving full benefits.  Medical advances get a lot more of us past 65 -- or even 67 -- these days, so small wonder it's running on empty.


The Neon Madman said...

Hang in there if you can and don't discount the possibility of going early, especially if conditions at work get unbearable. Start serious planning now. Maybe freelance or contracting would be a possibility?

I pulled the plug 3 months ago at 63, after spending the last 25 years in electronics contract manufacturing. Couldn't be happier - getting out of the modern work environment dropped my stress level enormously.

The big question about being able to retire at any point isn't necessarily the income level - it's health insurance. If you can figure out how to cover that, your options for leaving become much more flexible.

rickn8or said...

What did FDR and the Congresscritters care? They knew they'd be long dead before the scammery was discovered. Meanwhile, they'd still be in power and looking like The Good Guys.

Nothing Congress does quickly is good. Neither is anything Congress does slowly.

waepnedmann said...

What you will be amazed at, when you retire is how busy you are.
You will be asking yourself how did I get anything done when I worked full time?

Roberta X said...

"The health insurance." Yeah, that: I have zero options other than work and I am hoping to get my bad knee swapped out before retirement. So I'm in for as long as I can manage.

Rickn8: It's a littler more complicated than that. The plethora of grass-roots movements was bidding fair to sweep Washington away, and what might replace it -- other than chaos -- was pretty bad. Informed contemporary accounts are considerably more alarming than what we read in history books. It was mostly "We have to save our phoney-baloney jobs," with a lot of added, "Will America as we know it even survive?" The poor were gonna eat the rich unless they were placated and the rich darned well knew it.

Waepnedmann: Maybe. If present behavior is any predictor, I'm going to sleep an awful lot.

Glenn Kelley said...

The people that set up those schemes had 2 constants . They thought births would continue to grow the population and that life expectancy would stay in the 70 to 75 year age bracket .

Now life expectancy is in the mid 80s and the birth rate is about 1.6 babies /woman . If your population is growing it's not because more people are being born it's because people aren't dying . Immigration is the only other way to get the people you need to pay the bills .

markm said...

I'm involuntarily retiring - unless the local job market for my specialty unexpectedly picks up. I feel fit to keep working 10 or even 20 more years, and wanted to just for the fun of it, but my employer ran out of money, I'm too old to move again, and there's been no job prospect in sight since February. So I've signed up to start SS a few months before my magic 66th birthday, which will cost me a few dollars a month forever. It's enough money as long as neither of us runs up to much in medical bills over and above Medicare, but the grandkids are going to have to fend for themselves.

But really, with the huge increase in life expectancy since the 1930's, why has the retirement age only been bumped up by one to two years? Most 75 year olds are in as good or better shape (that is, alive!) than the median 65 year old was when this started. It's bad enough that this pyramid scheme has a shrinking base, but it's also much taller...