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CAUTION: Read the following with the understanding there are exceptions. There are people who through no fault of their own reach old age in poor financial shape, who were overwhelmed with misfortune and simply had little chance of success in their later years.
THIS IS ABOUT THE MAJORITY of the complaining over 65 population who are in the place they are, not from misfortune, but from inaction, poor decisions and a tendency to live in the moment and ignore the future.
Except for defense, the largest chunks of federal spending are on senior citizens and yet I often read something like this from a recent Time article, “Someone who has worked for 55 years like me should be able to retire.”
The same Time article says this. “The growing class of people who want to stop working, but can’t, represents a crack in a social compact that assured citizens who worked hard that they could take it easy when they hit 65, if not before.”
Assured they could take it easy? Not even the original intent of Social Security did that. Where did guarantees come from?
How did age 65 become synonymous with entitled?
“IRMAA premiums are unfair, Social Security should not be subject to taxation – I paid for my benefits working forty years.” Well, no you didn’t.
“I think Social Security benefits should be tax-free” – how do we make up the billions in lost revenue to both the Social Security and Medicare trusts?
I read about seniors who don’t think they should pay property taxes once they are 65, because they paid their working life and do not have children in school. In New Jersey you can have your property taxes frozen if you are over 65 and have income under $168,268 – about twice the national household income – are you kidding me?
But it gets better. A new program will cut property taxes in half up to $6,500 if you are 65 and have income up to $500,000. To me that is ludicrous.
Reaching age 65 and retiring may be an accomplishment, but it should not be a free pass. Most people have 40-45 years to plan and prepare for retirement and they get tax breaks to help them do so.
My biggest gripe in all this is that giving more to seniors creates a greater burden on young families, transfers more of a tax burden to them, makes their journey to age 65 harder.
There are no guarantees in life and there should not be just because you were fortunate to reach retirement age- even if you screwed up the journey. It’s not like getting older is a surprise.
I both agree with Richard, and like the present system where seniors like me can live it up.
If I were working, and I had a salary equal to the income I have as a retiree, I would pay at least twice as much in income tax – and that’s not even counting the employer’s share of FICA.
Provocative as always Richard. But regardless of how they got there, there is a large swath of seniors or soon-to-be seniors that are at the doorstep and realize that they’re objectively unlikely to support themselves for a significant duration in retirement, at least at the standard of living they enjoyed during their working years. As Richard points out, this can be due to a myriad of reasons both internal and external, but the end product remains, a group of seniors with simply not enough money. I find two likely and interlinked primary reasons. The first has been proven with time. The transition from defined benefit plans (e.g., pension plans) to self-directed 401(k)s is the biggie. Left to their own devices, even with ample direction, warnings, and caveats, it’s simply human nature to think short term (i.e, immediate gratification) over long (i.e., a retirement of unknown duration). Steps have been taken by government in recent years to address this (e.g., automatic enrollment in 401(k)s), but for probably 2-3 decades of seniors the damage is already done). The second is not a revolutionary thing, but really a evolving state of the country. Think of how many multi-generational households you know in the US? I personally can think of none, and the closest I can relate to is my own extended family, and the only reason that doesn’t exist for me currently is that the older generation has all passed. But the point is that seniors are essentially on their own financially, leaving for the most part SS and whatever individual retirement savings a senior accumulates.
And the net result? For many that simply falls short of the mark. So what does my crystal ball say? I think SS doesn’t get cut, period. And the part that will impact the entire economy? Sorry, but I think we’re going to see for a few decades that economically challenged seniors will be a drag on the American economy.
Human nature is a major factor as you say. The demise of pensions in the private sector not so much as barely half of workers ever had a pension and those that did had to work decades with the employer to gain real future income and job tenure has always been around five years.
A few years ago I never would have said this, but now I firmly believe the universal answer is a greatly enhanced – and paid for – Social Security system, but that’s not going to happen anytime soon.