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RETIREMENT: Retirees have earned reward

Letter by David C. Ogilvie, Gig Harbor on Nov. 15, 2011 at 3:05 pm with 43 Comments »
November 15, 2011 3:33 pm

Re: “Medicare and Social Security: Have and have-nots” (Our View, 11-15).

After reading this piece, I have to ask: What is your point? Should we, as retirees, feel a sense of guilt for having more than the entry level generation? Our generation is already known as one that helps with college costs, provides down payments for homes, and houses its unemployed adult children. But it seems this piece suggests we should take it a step further: Agree to reductions in Social Security and Medicare coverage.

In spite of the statistics you offer, we believe the financial spread between young and old has always existed – it’s a fact of life. Nearly everyone’s balance sheet is out of balance in those early years; liabilities far outweigh assets.

But, for those who forge ahead, overcome the obstacles, plan for the future and finally retire, there should be some reward. Please excuse the cliché, but that’s the American Dream.

So, I suggest we properly fund Social Security and Medicare, strip out the waste, fraud and abuse, and pass a workable system on to the next generation. Because, even though they may believe the day will never come, someday they will want to retire.

Leave a comment Comments → 43
  1. The younger generation is top heavy with kids who want instant gratification. Am I to be penalized because I and my wife deferred our gratification? We save for a downpayment for a house. We bought a modest home. We did not buy expensive cars. We did not inherit any wealth-not one thin dime.

    The last time I checked a Form 1040, I noticed the younger generation gets a $1,000 tax credit for each child. We raised our kids without any tax credit and at higher tax rates. We saved and invested what we did not spend for our retirement years.

    There has been a uproar demanding the high income taxpayers pay federal income taxes at a higher rate. The younger generation resists paying taxes for anything, yet it wants everything. I have no problem with paying at a higher tax rate. But, how about the younger generation paying for what it wants and consumes? Society can reduce the effects of social security “entitlement” by raising the federal income tax rates on the wealthy.

    The ‘super committee’ is already toying with the idea of introducing Chain CPI for future COLA’s. Maybe, all young complainers need to check into what Chain CPI is, because as soon as it adopted to compute COLA increases for social security, veterans’ pensions and federal retirement, private employers and state and local governments will adopt it.

  2. gerry0416 says:

    Another whining senior who doesn’t think that he has any responsibility for the problems of the country. We are all in this together and we are all going to have to sacrifice to fix the current budget problems.

  3. ah Yes but that’s the rub ain’t it? We’re all really good at demanding what someone else or some other group should sacrifice to fix current budget problems but what are you willing to sacrifice – oh wait, I forgot, you’re willing to pay less in withholdings – way to go – that will fix the economy, that will bring back living wage jobs, that will give us back our manufacturing base, that will give our kids an educational edge over those foreign kids for jobs of the future. Hmmm

  4. from the op/ed piece:
    Older people in general are bound to possess more than younger people, who have only begun accumulating possessions and equity in their homes.

    Well….duh!

    BUT, my father’s generation is much better off than my siblings and I are – he has a retirement based upon his highest three years of income that has been adjusted upward every year by COLA. I have a 401(k) plan which has been down right schizophrenic as of late – going up, going down, going up, going down – I think I will be lucky if I come out with the same amount I have invested when I start to draw upon it. And his SS benefits have, likewise been adjusted every year (until recently).

    AND, he was in his twenties after WWII and – like everyone else in America who was willing to work and do a little investing – his wealth increased almost automatically as the US economy roared.

    AND, with the hyperinflation of real estate values – being a homeowner really helped.

    BUT, those proposed cuts aren’t going to have much, if any, impact upon him. I, and others like me, who are on the bottom end of the Baby Boom who were expecting to retire in little over ten years are going to be hit with the cuts.

    I have more equity than my students – but then they have newer cars and other disposable items of depreciating worth – but I, and many of my generation, are not anywhere as well off as our parents.

  5. Another letter-to-editor by a greedy, brain dead senior.

    News flash for you David, Medicare is broke, Social Security needs an overhaul, and we are spending too much money on the war machine.

    The cuts are going to happen whether you like it or not. The numbers are so ugly that it has to happen.

  6. itwasntmethistime says:

    I don’t think he’s a greedy, brain dead senior. I think he’s right on the mark. Young people want everything their elders have worked a lifetime for and they want it NOW. They buy more than they can afford by using credit, then complain when the payments on that borrowing pinch their lifestyle.

  7. SadujTogracse says:

    Just because SS and Medicare are in trouble does not mean we should penalize those who have paid into those accounts their ENTIRE working lives. That is THEIR MONEY!!! If we truly want to fix the system then give younger people a CHOICE. I would opt out of SS in a heartbeat if given the option. I don’t trust the government on “taking care of me” when I retire and I never will. I know how best to save for my golden years, all I’m asking for is that choice. How’s that for being pro-choice?

  8. When I was young, I felt shafted, I was mad, it seemed that I and those like me would be the first generation in America that the cards were stacked against, that there’s no way that I could achieve what seemed so effortless for the folks: a middle class life in a suburban house that I own. But, time rolls on, you do what you can to get by, hard work.. you don’t let on to the kids when you’re stressed about money or when things aren’t going well.

    Then one day, you wake up, and you look around the suburban home that you own, the late model cars, the retirement accounts, the fact that if you _really_ want something, you can write a check for it, and you realize that life isn’t really all that unfair, if you just keep on keeping on.

  9. commoncents says:

    If you truly know how to best save for your retirement years then you should know that SS should be no more than 42% of your retirement income stream and should never be considered the source of “being taken care of”. Unfortunately the majority of the people in this country are not able to meet this goal…and you’re asking them to be smart about saving for themselves without that safety net?

    Keep in mind that’s just for a comfortable retirement…Approx 30% of our aged citizens derive more than 90% of their income from Social Security meaning they were unable to save much (if anything) for their retirement. Their retirement is anything BUT comfortable. And you want to remove that safety net?

  10. SadujTogracse says:

    Nope, read again. If there are those that want to remain in the system and cross their fingers that the money will be there when they retire, go for it. There are others of us who know how to invest and are comfortable doing it on our own. (and you actually can invest money without it being tied to the stock market). All I’m asking for is a choice, nothing more.

  11. concernedtacoma7 says:

    “Just because SS and Medicare are in trouble does not mean we should penalize those who have paid into those accounts their ENTIRE working lives. That is THEIR MONEY!!!”

    Please, they are going to take out WAY more than they put in.

  12. SadujTogracse says:

    Really? Doesn’t that depend on when they die?

    So let me get this straight. You want to tell people who were told they would get x amount per month in their retirement and now tell them that it is going to be less than that? Isn’t it bad enough that the government has raided this account to accommodate their own reckless spending? And some people sit there and say SS isn’t a scam, if this same thing were going on in the private sector there would be people going to jail.

  13. gerry0416 says:

    The changes to Social Security and Medicare that I am talking about will not affect anyone that is currently collecting payments. The way to fix these programs is to gradually start raising the age that individuals start collecting these benefits. This is based on the undeniable fact that we are living longer. These programs were never designed for the life spans that we now enjoy. Most of the complaining that we are hearing is coming from the idiot seniors who get most of their information from AARP which only cares about collecting fees from and selling insurance to their uneducated members.

  14. commoncents says:

    Saduj –

    You do have a choice. You have a choice where to invest your 60-70% percent. No different than a retirement plan with an ESOP component. Allows you to get a little riskier with your other investments.

    As for SS getting raided… What would you have the government invest that money in?

  15. SadujTogracse says:

    Yes, that’s a way to “fix” the system, that is if wating until you are 70 or older to get your money is a fix. And if you die before that age then all that money you gave into the system is just wasted. How about giving the INDIVIDUAL control over THEIR money? Instead of being treated like you are teenager with an allowance and age restrictions, let the individual manage their own money and their retirement if they should so choose.

  16. commoncents says:

    gerry – please keep in mind that not every social group is living longer. The wealthier white collar citizens are living longer (thankfully as I’m one of those) but there are not the same gains in blue collar mortality rates. Raising the age to begin collecting should be off the table…however, reducing the benefit, increasing the employee portion of the tax, raising the cap limit, and means testing should all be part of the equation.

  17. concernedtacoma7 says:

    Sad- an adjustment to the system has to be made. Perhaps the answer is to lower future benefits on those 45 years old or younger. This would allow them 20 years to plan financially and still leave a target retirement age of 65.

    But the promise made to old people was total BS. Hey, give us a dollar today and we will give you 100 when you retire. Don’t worry, the kids will be paying for it! Oh, and give me your votes…

  18. SadujTogracse says:

    “your 60 to 70%???? And the other 30-40% is not “yours”? Sorry, it’s ALL your money. Just because it’s taken out of your paycheck in the form of taxes and you don’t see that money doesn’t mean it isn’t yours. You don’t have a choice on where your FICA tax money is invested. It is taken away and then you hope it will be there by the time you retire. You have no say in it whatsoever other than electing politicians who you think have your best interest in mind. Good luck with that.

  19. SadujTogracse says:

    concerned, I agree it was total BS but the “promise” was still made. This and countless other promises from a government that you are telling me knows better how to invest my money than I do. Sorry, that dog don’t hunt.

  20. bigredone says:

    My biggest complaint with this discussion is this: SOCIAL SECURITY IS AN ENTITLEMENT PROGRAM.

    No it is not. It is paid for by the same people who take it out. The rate is set by the government as to how much is required to pay in. I don’t see anyone wanting to change the money deposited only the money withdrawn.

    A complete revamp of the system is needed but not on the backs of people who are 5-10 years away from drawing out what they were promised 40+ years ago.

  21. concernedtacoma7 says:

    Red- they voted people into office on the premise of this failed ponzi scheme.

    THEY ARE TAKING OUT MORE THAN THEY PUT IN (TO INCLUDE INTEREST). Call it what you want, but it is generational theft.

  22. SadujTogracse says:

    You are all talking about tweaking the system when what is really needed is an overhaul. A system based around choice and active participation in one’s own retirement savings will solve the problems. I have no problem with having a government account for people who don’t feel comfortable managing/investing their money. However there are many of us out here who want to be in control over all of our retirement money. Why should we be denied that choice?

  23. A system based around choice and active participation in one’s own retirement savings will solve the problems.

    Oh yeah….a system based upon the 401(k) system we already have – that are doing so well lately.

  24. SS is viable for another 25 years without any tweaking
    http://vtdigger.org/2011/05/13/aarp-report-shows-social-security-is-viable-for-another-25-years/

    Medicare is the bigger problem though “Obamacare” has extended its viability to 2029
    http://www.bloomberg.com/news/2010-08-05/medicare-s-viability-extended-to-2029-following-health-overhaul-u-s-says.html

    There are problems that need to be dealt with but, using the economic crisis as the reason to deal with them now is bovine excrement..

  25. SadujTogracse says:

    beerBoy, who says it has to be based upon the 401k system we have now? As I stated earlier there are ways to invest one’s money without having it tied to the stock market.

  26. concernedtacoma7 says:

    BB- talk to a financial planner if you do not like the volatility of your 401k. SS is not a viable retirement plan but a safety net.

  27. Test

  28. BB – Your first long post about your father’s generation was right on. I have been saying that for years. You can add in that college costs were low for that generation and for their kids (if they helped them out). I was going to tell you to diversify your 401K more (maybe more bonds) but tacoma7 beat me to it. One more note – baby boomers got burned along with younger folks when the pension (like your Dad got) was changed to a 401K. Most people have little financial knowledge. How can they possibly make informed decisions about their retirement plan? Many boomers are now having to work well past 65 because of there poor financial decisions (and two recessions since 1995). If you are one of the lucky ones that has a pension, you are golden. If you have a 401K, good luck.

  29. Sorry, there should be their.

  30. klthompson says:

    beerBoy: In lamenting that you are not as well off as your parents that is probably true for now. But, assuming you are twenty or more years younger than your parents you may possibly be far better off than them in twenty years.

  31. ct7 – I have been aggressively investing in moderate/slightly aggressive risk funds. I make note of my monthly statements but try to ignore them when they go down and not get too happy when they go up – I’m in this for the long-term and know that letting it ride in relatively secure and diversified investments is a sound strategy. I do not count on SS as my retirement but I count on it being part of my retirement.

  32. gerry0416 says:

    Commoncents, I doubt that you can document your claims. I’m sure that the Boeing factory workers have about the same life expectancy as the Boeing office workers. I do believe that what you are referring to is the fact that some individuals on the bottom rungs of the ladder tend to in life style choices that are detrimental to their health such as smoking, heavy drinking and poor eating habits. It’s time to do away with class warfare.

  33. In reading US History of what government was like before FDR – Warren Harding was it? and earlier presidents believed that it was unconscionable to take the people’s money (aka taxes) and give it to anyone other than businesses – hence trickle down economics. Which of course worked so well that it brought on the Great Depression.

    FDR and Eleanor brought a radical notion to government in the midst of dire economic circumstances of that “Great Depression”. These 2 people had the audacity to think that government has a responsibility to aid those citizens who suffered economic hardship through no fault of their own. If we can ship money off to Pakistan, India, Israel, South America – and businesses – why not our own citizens.

    Social Security was premised mathematically on a pyramid of older, less secure citizens at the top, supported by a broad base of younger working people. It worked for many years but as the “pyramid” of population ages, it doesn’t take a mathematician to foresee how SSA as currently structured cannot fulfill it’s premises indefinitely.
    With me so far?
    Ok – now what’s to be done about it? What is the solution?
    1) Forget scapegoating. The idea of social safety nets is incredibly necessary – but how to pay for it is the conundrum. I just wish we could all stop attempting to address the problem by scapegoating some other group – other than ‘all of us as a people with a collective problem”. That social scapegoating of “other groups” – those Democrats, those Republicans, those Jews, those wealthy old people, those liberals, those other groups that you are visualizing in some emotionally charged virtual reality – that you a victim of. Just STOP please. It pits us against each other and has us squabbling as friends and neighbors and communities over red herrings.
    VICTIMS and people who sit around lathered up by the businesses to lick our wounds and blame everyone else.
    2)Acknowledge that we have a collective culpability in how we got here and what we do about moving forward.
    3)WE can intellectualize all we want and talk about complexities but WE are the people. WE tell WAshington D.C. what we want but first let’s turn to someone of a different viewpoint and acknowledge that person’s pain and ask for 3 possible solutions.
    4)Try to find some common ground with at least one if not all of those solutions and ask that person to join with you in suggesting solutions – not blame to Republican and Democratic Washigton Senators and REpresentatives

  34. commoncents says:

    gerry – actually I can document my claims…

    http://www.actuary.org/newsroom/pdf/bluecollar_061101.pdf

    Now, the conclusions that came out of the committee that came up with this analysis was actually that blue collar employees do statistically die earlier EXCEPT when they were higher paid blue collar employees. However, they did not really want to include that latter part into the equation…although they do acknowledge it.

    Keep in mind that this is the Society of Actuaries that came up with this…

    Anectdotally (sp?)…I have heard it said that many of those BA factory workers do pass away within their first year of retirement. Obviously not most…but enough to have garnered notice.

  35. LarryFine says:

    Big difference between a “societal safety net” and cradle to grave entitlements… and there are plenty of academics that believe FDR’s policies prolonged the deppression… and Obama wants to repeat that mistake.
    Heck, even CBO Director, Doug Elmendorf, admitted that in the long run the stimulus will shrink the economy. He testified at a Senate Budget Committee hearing that the stimulus will indeed “be a drag on GDP” over the next ten years… kooky

  36. LarryFine says:

    … even kookier is that the video has been removed from youtube.

  37. commoncents says:

    Larry – I agree with you re: differences between safety net and cradle to grave entitlements. One way to do that is to make sure that people understand the difference between Supplemental Security Income and Social Security…they are not the same prgrams and are not paid using he same monies. I can understand why the former gets a lot of attention and scorn. Not so sure why people get so bent about the safety net for the aged.

  38. commoncents says:

    Saduj – so you advocate adding a layer of complexity so that we now must track who is in the system and who is out of the system…and what of those who start out not being in the system but realize the error of their ways? and vice versa?

  39. here are plenty of academics that believe FDR’s policies prolonged the deppression… and Obama wants to repeat that mistake.

    Further demonstrating that economics and history are soft “sciences” used to promote ideological biases (btw – the split is even, not even close to consensus)

    And….Obama’s half-measures aren’t in any way close to the New Deal efforts.

  40. LarryFine says:

    So we agree on something else bB.

    How much did FDR spend compared to O’Bama ?

  41. chile74 says:
    Nov. 16, 2011 at 7:57 pm BB – Your first long post about your father’s generation was right on. I have been saying that for years. You can add in that college costs were low for that generation and for their kids (if they helped them out).
    When I started holding a regular job in 1965 I brought home $125 per week, my rent was $94.50/mo, gas 31 cents/gal. electric and phone both around $9/mo. each,etc. etc. I lived very well on my own, paid my bills on time and had some left over. I am now 65 living on ssi and can barely pay my bills. I worked for every dime I earned. Unfortunately I made some wrong financial decisions which I won’t go into but the point is that I deserve every cent from ssi I worked all my life for without needing government assistance and never would think of blaming anyone else for my own decisions. I do feel bad for people that are 50+ and understand their frustration and worry over that will happen to ssi in the future. They deserve the same benefits as I. The bottom line is that our government is out of control in their spending ie: Foreign aid in the trillions to countries that hate us. I could go on and on but you get the point. Besides cutting foreign aid it would help the economy imensivly if our greedy politicians had to live with the same laws that they pass down to us.

  42. Darlin…don’t know where the tie in with my post is. BB was talking about the Greatest Generation which I feel got a lot of breaks compared to other generations. I certainly would not begrudge you your SSI benefits. Shouldn’t you be on Social Security at 65 or is the SSI giving you just as much money? SSI is not going away. I believe it is designed to help those under 65 who are unable to work. We will always take care of those folks. However, the SSI system is riddled with fraud. It needs to be audited to see who really qualifies.

    Darlin…..I think you are mistaken about foreign aid. It is not costing us trillions of dollars. It is less than 1% of our annual budget.

    Back to the article – I do agee with Dave on most of his points (I hate to admit that since he is a liberal who bashed Bush for all of his 8 years) but I think Medicare will need to be reformed and all of us will have to pay more. What we are putting in does not even begin to pay for all of the cadillac care that is provided. Just look at your SS statement to see how much you put into the system and double it for your employer portion. It won’t be nearly enough to pay for heart surgery, bypass surgery, cancer treatments, etc. Premiums need to go up and that means you and me, Dave. I would also raise the tax at least 0.1%, try to eliminate fraud, waste, and abuse (you notice I said try since the oversight is poor), and negotiate for better prices for RX drugs. That’s a start.

  43. Mr. Ogilvie

    For what it’s worth I apologize for the bashing you are getting from the comment mob. I turned 51 this year, work harder than ever and have just begun to think about what retirement will be like.

    Dignity should be a priority in our culture toward seniors.

    Tax Social Security on 100 percent of income and the problem is solved.

    Once we in the Baby Boom die off things will get easier for those “left behind.”

    Me best to you and yours.

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