Posted on 01/29/2023 9:19:11 PM PST by SeekAndFind
On January 10, the French government announced plans to raise the retirement age from 62 to 64.
The change would mean that after 2027, workers in France would have to work 43 years to qualify for a government pension, instead of 42 years. French workers promptly took to the street in protest decrying even this very small reduction government welfare.
Like many countries in Western Europe and North America, France faces a major demographic problem in that its population is aging and demanding ever larger amounts of public pension funds.
Meanwhile, the younger working-age population is shrinking as birth rates continue to fall. So, the French state is looking for ways to stay relatively solvent.
For Americans who follow our own old-age social benefits systems, this problem will seem quite familiar. Although the US regime is not in as dire fiscal straits as the French one, the US's federal government nonetheless faces huge and growing obligations to current and future pensioners. This will only grow more urgent as the population continues to age and as the numbers of prime-age workers stagnates.
Indeed, the Social Security scheme is an excellent example of how government programs, once established, gradually become far more costly—in real per capita terms, not just aggregate terms—as time goes by. Many recipients now spend decades collecting benefits on a program that had been sold as a program only for people who were too old, exhausted, and injured to work at all. Meanwhile, fewer and fewer workers are called upon to foot the inflated bill.
At the center of this mission creep for Social Security is the fact that Social Security benefits originally began at age 65. Yet, at that same time, the life expectancy at birth was below 65. (It's much higher now.) Many people lived well past 60 back then, of course, but not nearly as many as do today. In other words, a far smaller fraction of the work force collected Social Security, and for a shorter period. Today, however, more workers live long enough to collect Social Security, and they now receive payments for longer. That's a sure way to inflate the cost to taxpayers of old-age benefits. (It's also a sure way to encourage able-bodied workers to leave the workforce, thus tilting the economy more toward consumption rather than production.)
Even if we ignore the moral problems presented by transferring huge amounts of income from current workers to pensioners, the realities of demographics in the twenty-first century mean the minimum "retirement age" should really be at least 75. Too long has a shrinking pool of workers been forced to fund pensioners who start collecting government benefits in their 60s and can now expect to be on the dole for 20 years or more. Moreover, this phenomenon is growing. Social Security increasingly forces today's workers to shoulder an ever-greater burden on their ability to earn a living and support their families. The days of subsidized extended vacations for able-bodied 65-year olds must come to an end, but until that day comes, the damage can at least be limited by raising the age of eligibility.
When it was being sold to the public in 1935, those promoting Social Security took advantage of sentiments that people over age 65 were essentially too old to work, and thus would soon fall into poverty. This certainly would have seemed plausible at the time. Most jobs in 1935 involved significant amounts of physical labor whether we're talking about cleaning laundry, waiting tables, farming, mining coal, or building houses. Work was also more dangerous—as historical work injury data makes clear—and workers were more likely to sustain injuries that would render one unable to work. For example, a 65-year-old simply could not safely perform much of the work required at a steel mill. (As shown in this 1944 video on the steel industry.)
Especially important to efforts at presenting Social Security as fiscally prudent was the fact that with a minimum age of 65, the number of Social Security beneficiaries would also be limited by the realities of life expectancy. In 1940, for example—the first year that pensioners could receive benefits—life expectancy at birth was only 61 for men and 65 for women. Indeed, even if we eliminate the toll of childhood diseases on life expectancy, the numbers do not change dramatically. In 1940, total life expectancy for persons over 15 years of age was 68. Moreover, in 1940 the percentage of the population surviving from age 21 to 65 was only 54 percent for males and 61 percent for females. But what about those who actually made it to age 65? In 1940, a male at age 65 would, on average live another 13 years. A female would live another 15 years. So, when looking at the work force in 1940, we can eliminate nearly half of the men and about 40 percent of the women as likely future Social Security recipients. About half of those who actually made it to 65 would then collect benefits for no more than 15 years.
Now let's contrast that with life expectancy realities in our own time.
Life expectancy at birth today is 78 years, and for those who reach age 15, it is 80. for both men and women, more than 75 percent of the population reaching 21 will survive to age 65. That's an increase of 50 percent for men, and around 30 percent for women. For those reaching age 65 in 2022, males will live another 18 years on average, while females will live another 20 years.
These growing commitments from Social Security are further aggravated by the fact that while the retiree population is growing, growth in the work force is stagnating. Since 1960, the total number of Social Security recipients has increased by 364 percent. Meanwhile, the prime age population (age 25-54) has grown by only 90 percent. Put another way, in 1960, there were 4.6 prime age workers per Social Security recipient. In 2020, that number was 1.9.
Now let's look at this in dollar terms. Per prime-age worker, inflation-adjusted dollars spent on SS amounted to $9,590 in 2022. That's up from $4,814 in 1980, or an increase of 99 percent over the period. During the same period, inflation-adjusted weekly earnings for workers increased 16 percent. Part of this discrepancy is due to the fact SS payments are consistently—as mandated by law—bumped up by cost-of-living adjustments to account for price inflation. Wage workers enjoy no such guarantees.
Social Security benefits are rapidly outpacing both population growth and earnings growth. In the aggregate, the program is more generous (toward pensioners) than ever.
To stanch some of the bleeding from today's workers who get an increasingly raw deal on this, the time has come to stop the ever-upward creep in how much Social Security recipients collect.
As noted above, we see that, on average, men and women collect Social Security for a period that has grown by five years since 1940—an increase of 38 percent for men, and 33 percent for women. To even put a dent in this, the minimum age for SS needs to rise to 70. Yet, even this is much too low given how turning 65 in 2022 is nothing like what it was in 1940. Ever since it was first put forward, Social Security has assumed that reaching the age of 65 is also closely associated with disability. That may have been a good assumption in 1935 when work was more often dangerous, likely to produce disability, and medical care was much less adept at addressing these disabilities.
In 2022, however, the word "disabled" hardly describes the majority of Americans in the 65-74 age range. Indeed, only one quarter of this population reports having any disability at all. The share of Americans from 65-74 who report poor health has been declining, as has the proportion of workers in physically demanding jobs. It's unclear why 100% of these workers would require government income subsidies. In any case, workers who are actually disabled would qualify for disability benefits even if the age is raised. Moreover, a male worker today who reaches age 75 can still expect to live another 11 years. A female can expect to live even longer. Raising the age to 75 still wouldn't eliminate a taxpayer-subsidized "official" retirement, but the change certainly would reduce the length of time today's workers toil in a state of indentured servitude to today's pensioners.
One thing raising the age has going for it is that it's been done before. A 1983 change very gradually increased the full-benefits age from 65 to 67. That's much too little, and even an increase to age 75 would be a mild reform. Other reforms, up to and including abolition, should include means-testing pensions and totally defederalizing and decentralizing the program. But it's also easy to imagine the tidal wave of opposition from activists who vehemently oppose even a very mild reduction in Social Security payouts. Raising the age won't make Social Security just, prudent, or wise. But cutting federal spending is always the right thing to do.
"Dittos" for me.
So what are you gonna do for the next 20 years?
“So what are you gonna do for the next 20 years?”
Fish. Learn to cook. Play golf. Teach a couple of online college courses. And at the end of the day, continue to try to seduce my wife of 33 years.
I’m a disabled vet so our medical won’t be too bad. Have no recurring bill payments with the exception of life insurance. But with the new VA burial insurance plan, I can cut over 300 a month from my monthly expenses.
If they hadn’t kept robbing SS and giving it away to those who aren’t supposed to receive it, it would be flush...
The end goal of all this, no matter what they tell you, is putting government in complete and total control of every person’s finances — except for the ultra-rich, who give money to the politicians who make these laws.
If I didn’t think they would piss the money away on something else...I could live with raising the age.
The irony is that libertarians won't stop pushing for policies like free trade, open borders, and removing all government benefits until we get a real socialist revolution.
People plan their future based on the Social Security Age.
Do you want to lose elections? Because this is how you lose elections.
That’s it exactly. You were never supposed to live to collect, and those that did wouldn’t for long.
^^THIS^^
I hit 70 years old next quarter. My East Coast company laid me off when they closed the office in my West Coast state. I want to work. So far, every single submission of my resume has been met with silence.
Moreover, I had vested in two separate pension funds. Both got looted to zero. Later in my career, I participated in 401(k) plans as soon as they became available, but not for long enough to build a retirement nest egg.
I wanted to "die with my boots on." I fear no such luck.
Sounds like you have a good plan. Too many of my pals have not had a plan other than starting the cocktail hour(s) at noon.
Or people could have/can fund their own retirement. Anyone today that does not fund their 401k or IRA is going to be broke in retirement.
One thing about aging is that we each do it differently. I have friends my age that are really young and some that are really old. I felt really young until I fought off cancer and now I feel pretty darn old, but my mind isn’t thinking I’m old until the bodily limitations hit.
Some people are physically, mentally and temperamentally happy working in their 70s and even 80s. Others aren’t,
I retired at close to 67. It has been fun, but I didn’t save enough and now, at 74, I don’t do some of the travel and other modestly priced diversions I used to do.
Our “leaders” are well aware of the problem.
They have decided for a different “solution”.
Use the “health care system” to kill the elderly.
If the “experts” use the mass media to tell elderly people to take the vaxx, for example, you can be sure it is a really bad idea.
There is no way they want the elderly to live longer.
FDR did not want SS to be a welfare program.
He wanted workers to pay in and get paid back later.
The cap is based on the maximum benefit amount. Once you reach the maximum benefit amount, you don’t keep paying in.
100% agree. In particular, the SSI benefit (disability really infuriates me because it is handed out to pretty much anybody who applies for it.
One of the most egregious examples of abuse I've witnessed is in my own family. One family member was in the construction field and in his early 40s he developed knee issues so could no longer do the work he was accustomed to. However, his employer offered him an inside job at the same level of pay with opportunities for advancement (such as supervisor, foreman, construction manager).
But he decided he didn't want to be a "paper pusher" or a boss, so applied for SSI and got it, at the age of 42. Since then (this was 20 years ago), he has been collecting a full Social Security check as though he waited until FRA age (67) to collect.
What has he been doing the past 20 years? He's been going to the gym, hanging out at the beach, and working "under the table" at various jobs for extra cash. He could be working pretty much any job that doesn't require him to work on his knees. Sure, he's not rich but he's getting along just fine, while the rest of us work.
Meanwile I've been working my entire life without a break. I'm just now approaching the age of 62 when I can collect some benefits but I'm going to push it to 67 or beyond because I'm still healthy and able to contribute rather then become one of those collecting.
There is no reason whatsover to be giving lifetime "early retirement" SSI checks to people with only limited disabilities.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.