I’ve been on TMF for a long time, but not real active. I don’t remember seeing Steve’s Rants, lol. If you’re citing rant #37, there must be a lot of them. Any chance you can post them again ?
I am very much in agreement about the hypocrisy that is spewed out on a daily basis from our “thought leaders”, both political and media figures. I despise Fox “news”, and it is very, very easy to sniff out who is getting their info from them, as well as who is pitching a narrative that they might very well be getting paid to pitch, from amongst the TMF posters. I am 99.9999% certain you’re not getting paid to espouse your “rants”, so would like to read them.
OT I went down to GR to see a concert over the weekend, and rode in a vehicle that had only fm radio, so actually listened to Sean Hannity and a few others. It was sickening, and funny at the same time.
That is only if you believe the pandemic years represents the new normal. That is very unlikely. A historical example was the Spanish Flu, which cause US life expectancy to decline by almost 12 years in 1918. The chart below shows how quickly the return to pre-flu life expectancy occurred.
It worked in 1983. Social Security was within a few months of insolvency. Raising the retirement age from 65 to 67, has helped keep social security solvent for an additional 50 years.
Wow, a slippery slope argument. The vote to raise the retirement age to 67 occurred 40 years ago, a frequency of about once a generation. Not a very slippery slope. Raising the retirement age is politically unpopular so the notion that it is going to be a frequent occurrence is pretty nonsensical. It occurs out of fiscal necessity and simple logic. As life span increases and the health at each age level improves it makes sense to raise the retirement age.
Before I applied for SS, I ran the numbers. The convergence point for collecting at 62 vs 66 was, iirc, age 86. After than, collecting at 66 provided more loot, but, as another member of the board put it “what would I do with the extra money at that age, get a better sippy cup in the nursing home?”.
So, my analysis said I pocketed more loot by collecting at 62, as well as not paying in to SS for those years between 62 and 66 (which was irrelevant, because I pulled the plug at 58). Yes, working 8 more years, to 66 instead of 58, would make the low pay years. in the 70s/early 80s, drop out of the benefit calculation, but I doubt that would make a very material difference in the monthly benefit.
Someone with lots of time on their hands could probably run the numbers: someone making national average pay each year, from graduation from a 4 year college, to retirement. What they pay in, vs what they collect, for retiring and collecting at 62 vs 66, and falling off their perch at 85.
That is, I suspect, why both factions in Congress have pretty much agreed to take SS and Medicare off the table, for now. Most people, including goobers, have parents, and they are loath to shoulder the cost of supporting their parents, regardless what “traditional family values” say.
Well yes, there is every sign of COVID being the new normal. Why would you believe otherwise? In 2022 COVID was the third leading cause of death–just behind cancer–in the United States, and thus far in 2023 COVID deaths are cooking along at a respectable clip. And as we’ve seen in the recent past, states with anti-science agendas still have the highest death rates. Until people decide they wanted to get vaccinated–which a lot of people don’t–COVID will continue to a be major cause of death in the United States.
“The General Rants” date from the Mish era, early 2004. I had started responding to some posts with various rants, and I started numbering them. Mish demanded rant accounting, so I consolidated the previous rants into four “General Rants”. Unfortunately, the original posts are lost on the old boards.
They started with “Rant #1”. The genesis of Rant #1 was based on a few observations: 1: Iraqi oil exports had been sharply limited by UN sanctions, only a trickle allowed to fund “humanitarian needs”. 2: Iraq had destroyed it’s WMDs, and was compiling the documentation to apply to the UN for removal of the sanctions, so oil exports could be increased. Increased oil supply would probably drive prices down, so increased supply was a bad thing. Talking heads on bubblevision kept insisting that, post invasion, words to the effect, "US oil companies will go in, develop the Iraqi oil reserves, increase production, and drive the price of oil down to $10 (iirc, at that time, WTI was about $18) If that was what bubblevision was selling, the opposite was almost certainly the objective, ie: not only prevent Iraq having the sanctions lifted, but disrupt what production there was, tightening supply and increasing prices, which is what happened. I had posted a couple scenarios on the Mish board, before the invasion, on how the Iraqi oil fields could be blown up, to the great profit of US oil companies.
Anyway, the four consolidated “General Rants” dealt with redistribution of wealth, US as a police state, the US as a theocracy, and US government sponsored terrorism. (there was no “no politics” rule in the Mish days) Rant #37 was the one about redistribution of wealth. In the 19 years since, we have seem that confirmed repeatedly, like in Michigan in 2012, when taxes were raised on retirees and the working poor, to help fund two rounds of tax cuts for the “JCs”.
The Spanish Flu example for one. That massive pandemic had no lasting effect on human life expectancy. In addition, countries in Europe are beginning to bounce back. Switzerland, Belgium, France, and Sweden are already back to pre-covid life expectancy. When it comes to Covid, Europe tends to see trends before the US does.
Speaking of health, an unintended positive consequence of raising the retirement age is improvement in senior cognitive ability, including a reduction in the frequency of dementia.
The interesting finding is the possibility of a causal connection between early retirement and cognitive decline. A more recent study concluded that all demographic groups will better maintain cognitive function if they delay retirement.
Our findings suggest that postponed retirement is beneficial to cognitive function for all genders, races/ethnicities, educational levels, and regardless of professional or non-professional occupational status. The clear implication is that more recent cohorts, who have an older statutory retirement age, may, indeed, enjoy an enduring protective effect of postponed retirement against cognitive decline.https://www.sciencedirect.com/science/article/pii/S2352827321001300?via%3Dihub
A 2013 French study using the medical records of over 400,000 workers found that those who retired at 65 had a 15% lower chance of dementia than those who retired at 60, after controlling for other possible factors. Delaying retirement can delay dementia, large study finds
Instead of going through that once a generation, why not set full retirement age to 85% of 5-year (or whatever period makes sense) average life expectancy? For example, if life expectancy is 79, full retirement age is about 67. If life expectancy goes up to 83, full retirement age is 70. Etc.
Another convenient “study” that would justify preventing people retiring “for their own good”. I will lay odds that nothing is more mind numbing that working on an assembly line. It would have to rank at least as highly on mental vegetation as the bounty of “bachelorettes who think they can sing” TV shows that are on.
Sweden 65 you can start drawing on your retirement at 62
Denmark 65
Norway (flexible retirement age) average age of retirement on the State Pension is 62. Retirement pension is flexible and you may start drawing your retirement pension from the month after you turn 62. You can in Norway combine work and pension at 62 without your pension being reduced. (In the US you can’t work and start SS before 67 without a reduction in benefits)
* [the preceding paragraph is full of specifics on how benefits are reduced by taking benefits early]
These benefit adjustments for early and delayed claiming are intended to provide the worker with roughly the same total lifetime benefits, regardless of when he or she claims benefits, based on average life expectancy—also called actuarial fairness. Because of this, theoretically, claiming behavior for average-mortality beneficiaries will not affect program outlays in the long run.
Researchers have noticed several issues with the actuarial adjustment. For example, the adjustment factors were determined more than four decades ago based on life expectancy and interest rates at the time of enactment. Some researchers argue that the actuarial adjustment factors should be updated to reflect the increase in longevity and the decline in interest rates. Specifically, a longer life expectancy and a lower interest rate will call for a smaller actuarial adjustment—reducing the early claiming penalty and lowering the credit for delayed claiming.
Additionally, because an individual’s mortality may differ from the population average, the actuarial adjustment schedule does not appear to be perfectly fair for all beneficiaries. The actuarial factors may advantage one group relative to another by gender, income level, and other measures. For example, research has found that late claimers of Social Security benefits have higher lifetime earnings and lower mortality than those who claim at age 62, and the benefit increase from delayed claiming is larger for those with higher lifetime earnings because their delayed benefits exceed the actuarially fair amounts (which are based on workers with average life expectancy). Some researchers maintain that this may undermine the redistributive element built into the Social Security benefit formula, which replaces a higher proportion of career-average earnings for low earners than for high earners.
Because “life expectancy” is not the best metric to use. It is certainly the easiest, and the most widely understood, but I maintain it is far from the most appropriate. As Einstein liked to, let’s do a thought experiment. Suppose life expectancy suddenly increased by 10 years, but useful employed life did not.
To some extent that is covered in the quoted text above (italics are original). The mechanism is not perfectly fair and never will be. Some professions are dangerous and people die early (think: coal miners), wear out the human body sooner (furniture movers), or have other unfortunate effects affecting people’s abilities to earn a livelihood. I am not striving for perfection here, only noting that raising the retirement age is not a panacea as thousands, more likely millions will fall into the gap previously reserved for the elderly destitute.
I remind that corporate America seems unlikely to have enough jobs to employ the recently laid off 64 year old population, and unless attitudes change dramatically likely never will.)
While I entertain the possibility, I am mindful that this may be looking at effect rather than cause. People being run out of corporate jobs are likely to take retirement rather than flip burgers, and 60-year-olds are run out of corporate jobs because their mental acuity is slowing, their memories fading, and their ability to adapt diminishing.
It would not be the first time the effect has been mistaken for the cause,.
That is not quite what I was talking about. The quote talks about total benefits received by the retiree. I am talking about benefits received, vs money paid in, at 62 vs 66. If the actuary is saying you receive the same total lifetime payout regardless whether you retire at 62 or 66, then, that implies that you get nothing extra out of the system, for having paid in to it for four more years, by retiring at 66. So, that would confirm the hypothesis that the SS cash flow would be improved by dropping “early retirement”, making no payout, at any rate, available, before “full retirement age”.
You can’t do thought experiments that are literally impossible. There needs to be some probability that it could actually occur. Life expectancy, especially averaged over 5 or 10 or more years, literally can’t jump by 10 years (or even a month). Life expectancy averaged over a period of time ALWAYS moves very slowly. Even the COVID shock, when averaged over a period of time, shows a slow decrease, hopefully moderating after a few years. In short, life expectancy averages move very slowly, and any effect of this kind of thing would be very slow … almost generational. It’s solely to remove the political issues.
Furthermore, I suspect that slowly lengthening lifespans ALSO come with slowly lengthening, certainly on average, useful working career periods. The argument that physical labor stops a career is not valid because that already happens at 50 to 60. The ideal should be that those in physical labor for their career should transition out of physical labor and into training/managing/process development in their 40s/early 50s in preparation for the last 15-20 years of their working life when they can’t do the physical stuff anymore. By the way, this even applies to the most common US occupation (trucking), after age 50 is becomes much more difficult and many retire by 55 due to that fact.
On the other hand, perhaps people with impaired metal capacities tend to retire early. I’m sure there is a correlation, I’m not at all sure that there is a cause. I’m sure that my last three years of working were killing my brain power and certainly my mental health.
That’s why it’s a thought experiment. Einstein famously envisioned several of them, including traveling at the speed of light, being enclosed in a free falling elevator, and following a photon to decide whether it is a particle or a wave. So yeah, a “thought experiment” is a way to consider things in a non-linear world.
I cannot believe you said this. You think a lot of moving guys (appliance installers, furniture assemblers, roofing contractors) are going to move into “management”? Wow.
Except that corporate America has no use for out-of-work 62 year olds, and some 62 year olds cannot continue doing the job they have trained a lifetime for, or any other except “fries with that” or “greeter”, which is unseemly and insufficient, at least to me.
Dad retired two Decembers ago at age 81. He turned 82 a few weeks later into January. He has a slight slow down in his memory. He had an eye surgery problem that hurt his overall performance. The domino effect caused him trouble. He is now over his eye sight problem. The next two surgeries straightened him out. He has regained some of his memory function. He was not that bad.
The real precipitating factor was he was working remotely during Covid but was about to be called back into the office. He decided he was too old to catch Covid. This was just prior to a vaccine coming out.
If his second cataract surgery had gone well, he had a smoker’s cough on the table with the tools in his eye and Covid was not going on, he would be working today. Or just retiring at age 84.
There isn’t enough potential for upward mobility. Think of an Amazon warehouse. There are multiples more workers than there are managers. There aren’t nearly enough management slots for the vast majority of workers ever to get out of the warehouse.
Amazon has a program called Career Choice for its hourly workers which provides pre-paid tuition and books to four year institutions in worker’s preferred field of study, like accounting, nursing, etc. The idea is worker needs a way out of the warehouse, but there aren’t nearly enough management slots for people to be promoted so they can be re-trained in some other field. However, the program has low participation rates. Apparently, many workers don’t see themselves in future management/professional roles and/or otherwise aren’t thinking about employment opportunities decades down the road.
That is where you make the mistake. Social Security looks at the NPV of payouts, not what the worker paid in. The entire system is PAYGO, not the ROI of invested funds paid by the worker(s). The Boomers overpaid for their benefits because it was irresponsible to shift the entire payment obligation (for Social Security benefits owed to the Boomers when they retired) onto the next 1-2 generations of workers. Hence, the $3+T SSTF. Key point: The economic destruction of 2000 to 2009+ caused a massive shortfall in the SSTF because there were far fewer workers paying into the system (i.e. lots of people not working) and instead being on unemployment, welfare, etc. That large an ongoing shortfall in revenue to the SSTF meant the fund was short trillions of dollars that were planned/expected to be received.
May be worth knowing that the Swedish retirement system is praised by the likes of the WSJ and the National Review. Sweden did two things that conservatives love to keep their equivalent of social security solvent. First they partially privatized the system. Second and perhaps most important, they mandated that pension benefits can never exceed revenues, essentially making deficits impossible. This means that if tax revenues fall below a threshold, pension payouts are automatically reduced.
In effect, the Swedes made their retirement system solvent by reducing the amount of guaranteed benefits. Even with all this, Sweden is also increasing its retirement age. In 2026, the early retirement age will be 64 and full retirement increased to 67. This will likely continue to increase as the retirement ages are pegged to life expectancy.
It is good to be skeptical but you should probably also assume that the researchers doing such studies are as smart as you are. In the article linked in your post it is stated that the researchers recognized the possibility you mentioned and did the following:
To rule out the possibility that mental decline may have led people to retire earlier, researchers did analyses that eliminated people who developed dementia within 5 years of retirement, and within 10 years of it. “The trend is exactly the same,” suggesting that work was having an effect on cognition, not the other way around, Dufouil said.
Remember that line from “The Ten Commandments”: “cities are made of brick, the strong make many, the weak make few, the dead make none”?
Yes, “JCs” would rather have young, healthy, strong, workers. If there aren’t enough such candidates around, would they rather have someone who may have lost a bit of speed, strength, and stamina, or no worker at all? A Burger King near me has two grey haired guys working. Some years ago, I stopped at a Mickey D’s in Ionia, MI, and observed the entire staff seemed to be composed of “empty nest” moms, in their 40s and older. I have mentioned before the recent news item of the 82 year old cashier at WalMart. A WalMart I stopped at a couple months ago had a “greeter” that, while not elderly, had significant mobility issues. A “JC” will hire the best that is available. If the best available happens to be 75 years old, but reasonably able bodied, that is who will be hired.
