[tabi] Re: article on the health of Social Security and retirement
- From: "Sally Benjamin" <salbenjamin@xxxxxxxxxxx>
- To: <tabi@xxxxxxxxxxxxx>
- Date: Mon, 27 Sep 2010 10:29:02 -0400
Chip,
I tried to open this message and when I did it says language pack instillation.
Sally Benjamin
salbenjamin@xxxxxxxxxxx
----- Original Message -----
From: Chip Orange
To: tabi@xxxxxxxxxxxxx
Sent: Friday, September 24, 2010 5:35 PM
Subject: [tabi] article on the health of Social Security and retirement
I know a lot of blind people have a very direct interest in the health of the
social security system, so I decided to post the short article below.
Allison and I plan to retire in a little over two years, when we're 51. This
article addresses those who have plans such as these; as well as those who have
concerns over the social security system.
----------
http://www.cnn.com/2010/OPINION/09/22/farrell.low.retirement.age.cx/index.html?hpt=C2
Lower retirement age to 50-something
By Chris Farrell, Special to CNN
September 22, 2010 3:27 p.m. EDT
STORY HIGHLIGHTS
* Chris Farrell: "We can't afford early retirement" is alarmist; there's no
Social Security crisis
* Farrell says public and private pensions depend on economy's 2 percent
steady growth
* Mandating older retirement is a step backward, he writes. Wealthy societies
don't do that
* The goal should be giving people freedom of choice in the last third of
life, Farrell says
Editor's note: Chris Farrell is economics editor for Marketplace Money,
American Public Media nationally syndicated public radio personal finance
program. An award-winning journalist, Farrell is a regular contributor to
Marketplace Morning Report. He is chief economics correspondent for American
Public Media's documentary unit, American Radio Works. He's also chief
economics correspondent for Minnesota Public Radio. Chris regularly writes for
Bloomberg BusinessWeek.
(CNN) -- "Grow old along with me! / The best is yet to be, / The last of life
for which the first was made." Robert Browning, 1864
How quaint Browning's celebratory ode to aging is these days. Americans seem
gripped with dread about an aging society. The alarm "we can't afford it" is
ringing loudly all over the place, from congressional hearing rooms to
corporate boardrooms to policy think tanks.
The reason for the alarm is the federal government's rising tide of red ink.
Retirement looms for the roughly 76 million baby boomers born between 1946 and
1964. The oldest members of the Woodstock generation could start collecting
Social Security in 2008 and they'll be eligible for Medicare next year. And the
core of the federal government's long-term debt-and-deficit problem is
entitlement spending.
Yet the widespread perception that Social Security, the oldest entitlement,
is a basket case is deeply wrong. (In sharp contrast, health care spending is
the driving force behind the scary budget projections.) There are looming
financial concerns, but they're manageable from an economic point of view.
There is no crisis. For one thing, when it comes to Social Security, and all
public and private pensions for that matter, what really matters is the health
of the economy. For example, the future Social Security tab is easy to meet if
the U.S economy continues its average annual per capita growth rate of around 2
percent, which it has for the past half-century or so.
Read the opposite view on retirement age
<http://www.cnn.com/2010/OPINION/09/22/munnell.raise.retirement.age/index.html>
For another, the real Social Security concern lies with the consensus on how
to shore up the system's finances: Raising the age of retirement to, say, 70.
It's the signature change that has gathered around it as close to a bipartisan
consensus as is possible in today's fractured politics.
Average life expectancy, so goes the argument, is about 78 years. That's way
above the average expectancy of 61 years when Social Security became law in
1935. We're also healthier and better educated. Therefore, we're told, it's
feasible for most Americans to work longer and the change will relieve some of
the system's long-term financial pressure. What's not to like?
Everything. Mandating that folks retire later is a big step backward. Before
the 1950s, retirement was for the rich. Most elderly Americans needed to earn
an income and work was often hard to get. Yet with Social Security, and
Medicare in 1965, a majority of aging workers could look forward to a period of
fulfillment at the end of their working lives. It was a major social and
economic achievement of the 20th century. The richer a society becomes, the
more people spend on health care, education, leisure and, yes, early
retirement. That's what wealthy societies do.
This suggests that the public policy goal should be to lower the retirement
age to, say, 50-something. Again, that's an age of retirement only the rich can
afford. Why not create a comparable option for everyone?
It sounds crazy, doesn't it? The idea is well outside the mainstream. But too
much of the discussion about Social Security has taken a narrow bean-counter
view of the system. The goal of reform should be to make the system better by
enabling people to enjoy greater freedom of choice in the last third of life.
Now, the choice may be work, full-time or part-time, paid or volunteer. It
could mean learning more and heading off on various adventures. For many people
it might involve nourishing their spiritual well-being and making a difference
in their community.
"Today, ordinary people wish to use their liberated time to buy those
amenities of life that only the rich could afford in abundance a century ago,"
writes Nobel laureate and University of Chicago economist Robert Fogel in "The
Fourth Great Awakening and the Future of Egalitarianism." "These amenities
broaden the mind, enrich the soul, and relieve the monotony of much earnwork."
Fogel offers up a possible blueprint for accomplishing the goal of an earlier
retirement. The transition might take several generations. It would require
that everyone save when they're younger -- a universal mandatory savings
requirement. Yet under very reasonable economic growth assumptions households
that were required to set aside nearly 15 percent of their annual income into
retirement savings would be financially free to pursue their passions in the
mid-50s. For low-income people, he recommends boosting their savings with a tax
of 2 or 3 percent "applied progressively to the top half of the income
distribution."
There are other ideas that would accomplish the same goal. Fogel's is one
possible blueprint. To be sure, in these times it's hard to imagine that the
economic resources are there to finance early retirement. But America remains
the world's wealthiest nation. Social Security reform should build on economic
opportunity, not embrace penury. We can afford it and, yes, the best is yet to
be.
The opinions in this commentary are solely those of Chris Farrell.
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