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Default How would you fix the budget?

November 17th, 2010, 20:45
The percentage of 97 year olds who can run marathons is minuscule.

People will have a spectrum of healthiness at 68 (or any age) no matter what their jobs were and that is the problem. The "you retire at 68 and no earlier" type rules have no flexibility.
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November 17th, 2010, 21:06
Originally Posted by Thrasher View Post
Then the model should be changed. Stats quo is not progress.
There is no model that is going to allow the majority of the population to spend up to half their adult lives in retirement. So either you scrap the socialized retirement model completely (not a bad idea so long as you have adequate safety nets in place to prevent poverty in the disabled or elderly, which is what SS was designed to do in the first place), or you raise the age qualifications to make the system solvent.

That's it.

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November 17th, 2010, 21:27
Uh no, there are other possibilities, too, but they require some imagination…
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November 17th, 2010, 21:33
Such as? Because I have yet to hear of any pension system plan, theoretical or otherwise, that can function in the long term with people retiring only 2/3 through their lives.

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November 17th, 2010, 21:48
Well one option that quickly comes to mind is age dependent variable number of workhours, fewer as you get older, more when you are younger, rather just a step function cliff between working vs. retired.
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November 17th, 2010, 21:50
That's actually the first time I have heard of that. Interesting solution. However, you're still dealing with a loss of income because the people are working less.

I'd say some people already do this to some extent. Take an early retirement package from a job, then work part-time somewhere until SS kicks in (which also allows them to wait until later to start taking it and thus get a bigger check). Not exactly the same thing, but similar.

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November 17th, 2010, 21:52
Yes, but the more energetic younger can (and frequently do) work more hours. We should recognize that reality and build around it. shrug…

Similarly many retired people end up going back to work at my workplace at half-time because they are bored AND because the have very valuable experience to impart to their juniors…

Of course, working for a non-profit where people are motivated by the work rather than greed may skew my point of view…
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November 17th, 2010, 22:04
Originally Posted by Thrasher View Post
Yes, but the more energetic younger can (and frequently do) work more hours. We should recognize that reality and build around it. shrug…
It would be an interesting proposal to read, not sure how you could do it, but interesting.

Similarly many retired people end up going back to work at my workplace at half-time because they are bored AND because the have very valuable experience to impart to their juniors…
I wish my Dad would do this. He retired early at 54, did some consulting on and off for a few years, then fully retirend around 60, and now, 5 years later, he's bored out of his mind. I can literally tell that it is atrophying. It's not alzheimer's or anything, it's just from disuse. Really sad.

Of course, working for a non-profit where people are motivated by the work rather than greed may skew my point of view…
Greed is a pretty harsh word. Just because people don't want to work for low wages doesn't make them greedy. [/geedy investment bank employee]

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November 17th, 2010, 22:10
Well, I just think people need to recognize that work in itself can be fulfilling and thereby motivating without the profit motive… The US policy makers, pundits, politicians, and hivemind forget this. Of course, this is very subject to abuse by the greedy and power hungry…
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November 17th, 2010, 22:15
I find that most people that don't have a passion for their work end up not being overly successful at it. It's hard to hate what you do and be great at it.

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November 17th, 2010, 22:18
Originally Posted by blatantninja View Post
I wish my Dad would do this. He retired early at 54, did some consulting on and off for a few years, then fully retirend around 60, and now, 5 years later, he's bored out of his mind. I can literally tell that it is atrophying. It's not alzheimer's or anything, it's just from disuse. Really sad.
Too many companies aren't interested in "older" workers no matter what their experience.

(putting on my bean counting "human resource" manager hat for a paragraph)

Workers are no longer "personnel" but "resources" and like other resources are interchangeable and so you just go to the cheapest source. Younger workers are cheaper than older workers, younger foreign workers even more so, so get rid of the older (expensive!) domestic workers and offshore the work. Maybe have the old doddering folks teach the new guys before they go. Bonuses all around for us thinking of this!

Of course this eventually comes back to bite them and they don't understand what went wrong.
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November 17th, 2010, 22:22
Yes, the whole importance of the profit motive being the entire driver for efficiency is only part of the story, yet our politics are so polar, anything in the middle that actually resembles reality is ignored. It's like trying to drive a car by thrashing the steering wheel between all the way to the left and all the way to the right…
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November 17th, 2010, 22:25
Yep people treated as "resources" ala Microsoft Project is idiocy. What a gift MS has been to society…
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November 17th, 2010, 22:36
The percentage of 97 year olds who can run marathons is minuscule.

People will have a spectrum of healthiness at 68 (or any age) no matter what their jobs were and that is the problem. The "you retire at 68 and no earlier" type rules have no flexibility.
Earlier retirement and live with less money is of course an option. Either way the point is that the amount of healthy 68 year olds are steadingly increasing in most countries. We'll need some kind of limit… because some people are in a worse condition at 25 than others are at at 68. So I think the reasoning is irrelevant.

That's actually the first time I have heard of that. Interesting solution. However, you're still dealing with a loss of income because the people are working less.
Actually old people usually earn more ( at least they should ) so it might not be that much of a problem if they work less. It is a suggestion which could help, but it is not enough by itself.
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November 17th, 2010, 23:17
Originally Posted by GothicGothicness View Post
Earlier retirement and live with less money is of course an option.
It is not really an option except for the extremely wealthy under the current system. Social Security, the tax code, and many private pension systems REALLY hammer you for retiring early.

For instance,

Date of birth: 6/15/1950
Current earnings: $40,000.00
Benefit in year-2010 dollars

Retirement age Monthly benefit amount 1
62 and 1 month in 2012 $899.00
66 in 2016 $1,251.00
70 in 2020 $1,724.00

(from one of the social security benefit estimator web sites using their default values)

You will get hit with a 10% tax penalty (possibly more) from distributions from private and pension savings.
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November 17th, 2010, 23:27
Originally Posted by BillSeurer View Post
It is not really an option except for the extremely wealthy under the current system. Social Security, the tax code, and many private pension systems REALLY hammer you for retiring early. For instance,

Date of birth: 6/15/1950
Current earnings: $40,000.00
Benefit in year-2010 dollars

Retirement age Monthly benefit amount 1
62 and 1 month in 2012 $899.00
66 in 2016 $1,251.00
70 in 2020 $1,724.00

(from one of the social security benefit estimator web sites using their default values)

You will get hit with a 10% tax penalty (possibly more) from distributions from private and pension savings.
My parents are not extremely wealthy and they retired early just fine. I had one client that retired at 50 with $400k in the bank (which is not even close to extremely wealthy), and wasn't planning on drawing on his pension or SS until 65. It's all about lifestyle and how you've made your economic decisions in the past.

As for your 10%, that is not entirely correct. If you do retire prior to 59 1/2 and need to take funds out of qualified accounts (such as IRA's, 401k's, etc.), there are several ways to avoid the 10% early withdrawl penatly:

1) Hardship, medical, or other qualified expenses
2) 72t distributions (essentially they take the amount in your account, apply an IRS approved return rate, usually in the 6% range, and then come up with an amount that should, if that rate is realized, annuitize the distribution over the rest of your expected life).

There are a few other ways as well they get a bit more complex in the way they are set up as well.

As a side note, IMO the sweet spot for SS benefits is 66. If you look at the NPV of funds over expected life, it is the highest.

But this really gets back to the issue at hand, and that is that retirement, and especially early retirement, is really not a right, it's a privelege. SS was never ment to be a retirement system, it was meant to keep the elderly that could no longer work out of poverty, nothing more.

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November 17th, 2010, 23:48
Originally Posted by GothicGothicness View Post
It is a suggestion which could help, but it is not enough by itself.
No one claimed it was a complete solution.
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November 18th, 2010, 03:23
http://www.nytimes.com/interactive/2…oices=2vb5dbd0

I solved the US's problem !!!!
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January 13th, 2011, 17:15
To add to advice regarding tax breaks and military costs:

"CHART OF THE DAY: Reminder, The Deficit You're Freaking Out About Is Bush's Fault"

http://www.businessinsider.com/chart…eficits-2010-6
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January 13th, 2011, 19:24
That's very interesting. How do you explain the national debt increasing $3T under 2 years of Barack and Pelosiov while the national debt increased "only" $5T under 8 years of Dubya (which included 9-11, let us not forget)? Oh, sorry, I'm interrupting your "Blame Bush" chant, aren't I.

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