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Unnecessary Breaks

Richard Quinn, 1:24 pm ET

IT’S SOCIETY’S responsibility to provide for those in need. “Need” is the key word here. It bothers me that so many resources are directed to those of us who made it to old age.

Although there are many low-income seniors, the generalization that we’re all income-challenged is a fallacy. According to the Congressional Research Service, “The poverty rate for individuals aged 65 and older historically was higher than the rates for adults aged 18-64 and children under the age of 18, but today is the lowest among those three age groups.”

The fact is, seniors have a higher median net worth than most younger Americans. Their median income is equal to or greater than many middle-aged Americans raising families and saving for retirement. Nevertheless, senior discounts and tax advantages indirectly transfer monetary resources from younger to older Americans.

In New Jersey, for example, seniors with household income of up to $150,000 can get a rebate on property taxes and apply to have future increases frozen if their income doesn’t exceed $92,969. (For comparison, the median income for all households in New Jersey is just over $85,000.) Many states have similar programs with income limits that may or may not apply. There are also discounts of all kinds just because we’re old.

Contrary to what many believe, seniors are the only group of Americans virtually guaranteed not to be living on a fixed income, thanks to investment growth and Social Security’s cost-of-living adjustments.

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David Lamb
David Lamb
1 month ago

“An acceleration of means testing for older folks for SS and Medicare benefits and tax preferences could separate the more fortunate (wealthy) seniors from the ones on fixed income with little savings, and I have to assume this will happen (in a big way) before I begin drawing SS in another 9 years at age 70.”

Nailed it.

parkslope
parkslope
2 months ago

Unlike the US, senior discounts are essentially nonexistent in the EU but student discounts are very common. The more generous safety net for seniors in Europe makes it more obvious that they don’t need discounts while the discount in the US is a long-standing tradition that began when it made more sense.

Matt McGuinness
Matt McGuinness
2 months ago

There used to be another syndicated financial columnist I enjoyed reading regularly, way back when Jonathan Clements was still writing a regular column in the Wall Street Journal and Humberto Cruz was a syndicated columnist. I can’t remember his full name and I don’t think he wrote for the WSJ, but his thumbnail photo is still quite clear to me! And I’m pretty sure his first name was “Samuel”. (Anyone: please complete the name for me so I don’t go crazy, if my description triggers recognition of the columnist in question !).

Anyways, a common theme in “Samuel’s” columns was, just as you say, younger people have a much less secure retirement awaiting them, financially, than the generation of older folks who are already there or closing in fast. And for similar reasons; wealth transfers to the elderly codified into IRS law and policies favoring the elderly based on longstanding societal stereotypes, perhaps developed during WW II or the 50’s and 60’s I’m guessing.

Although at the time he was writing, he was probably referring to the greatest generation, while you are now making the same point mostly about their successors the baby boomers like myself (born in 1960), as time marches on.

But the wealth gap in society today has only widened as a result of the Covid pandemic, by increasing the net worth of home and stock owners, but not so much younger working age folks early in their careers with few appreciating assets. So Samuel’s and your point is even more true today than it was 10 years ago, IMO.

An acceleration of means testing for older folks for SS and Medicare benefits and tax preferences could separate the more fortunate (wealthy) seniors from the ones on fixed income with little savings, and I have to assume this will happen (in a big way) before I begin drawing SS in another 9 years at age 70.

The coming massive expected estate wealth transfer from boomers to the next generation may help, but not anytime “soon” in the case of late boomers like myself – I plan to live another 25 years or more, God willing…!

Nate Allen
Nate Allen
1 month ago

A couple names that came up in Google searches for financial writers were Samuel Shulsky and Samuel Brittan. Try googling both names and see if the images of the guys you see ring a bell.

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