World braces for retirement crisis

Many people will be forced to work well past the traditional retirement age
Associated Press
Dec 31, 2013

 

A global retirement crisis is bearing down on workers of all ages.

Spawned years before the Great Recession and the financial meltdown in 2008, the crisis was significantly worsened by those twin traumas. It will play out for decades, and its consequences will be far-reaching.

Many people will be forced to work well past the traditional retirement age of 65 — to 70 or even longer. Living standards will fall, and poverty rates will rise for the elderly in wealthy countries that built safety nets for seniors after World War II. In developing countries, people's rising expectations will be frustrated if governments can't afford retirement systems to replace the tradition of children caring for aging parents.

The problems are emerging as the generation born after World War II moves into retirement.

"The first wave of under-prepared workers is going to try to go into retirement and will find they can't afford to do so," says Norman Dreger, a retirement specialist in Frankfurt, Germany, who works for Mercer, a global consulting firm.

The crisis is a convergence of three factors:

— Countries are slashing retirement benefits and raising the age to start collecting them. These countries are awash in debt after overspending last decade and racking up enormous deficits since the recession. Now, they face a demographics disaster as retirees live longer and falling birth rates mean there will be fewer workers to support them.

— Companies have eliminated traditional pension plans that cost employees nothing and guaranteed them a monthly check in retirement.

— Individuals spent freely and failed to save before the recession, and they saw much of their wealth disappear once it hit.

Those factors have been documented individually. What is less appreciated is their combined ferocity and their global scope.

"Most countries are not ready to meet what is sure to be one of the defining challenges of the 21st century," the Center for Strategic and International Studies, a Washington think tank, concluded in a report this fall.

Mikio Fukushima, who is 52 and lives in Tokyo, is typical of those facing an uncertain retirement. Fukushima, who works in private investment, worries that he might have to move somewhere cheaper, maybe Malaysia, after age 70 to get by comfortably on income from his investments and a public pension of just $10,000 a year.

If he stayed in Japan, he says, "We wouldn't be able to travel at all."

People like Fukushima who are fretting over their retirement prospects stand in contrast to many who are already retired. Many workers were recipients of generous corporate pensions and government benefits that had yet to be cut.

Jean-Pierre Bigand, 66, retired Sept. 1, in time to enjoy all the perks of a retirement system in France that's now in peril. Bigand lives in the countryside outside the city of Rouen in Normandy. He has a second home in Provence. He's just taken a vacation on Oleron island off the Atlantic Coast and is planning a five-week trip to Guadeloupe. "Travel is our biggest expense," he says.

In Rochester, Minn., Elaine Case, 58, and her husband, Bill Wiktor, 61, both retired at 56 after three-decade careers at IBM. They have company pensions and will receive Social Security in a few years. They love to travel. Wiktor climbed Mount Kilimanjaro last year. They've taken a trans-Atlantic cruise and plan next year to hike Peru's Inca trail.

"We're both enjoying our second lives immensely and with gratitude," Case says.

A BRIEF GOLDEN AGE

The notion of extended, leisurely retirements, like the ones Bigand, Case and Wiktor are enjoying, is relatively new. German Chancellor Otto von Bismarck established the world's first state pension system in 1889. The United States introduced Social Security in 1935.

In the prosperous years after World War II, governments in rich countries expanded their pension systems. In addition, companies began to offer pensions that paid employees a guaranteed amount each month in retirement — so-called defined-benefit pensions.

It got even better in the 1980s. Many countries began to coax older employees out of the workforce to make way for the young. They did so by reducing the age employees became eligible for full government pension benefits. The age fell from 64.3 years in 1949 to 62.4 years in 1999 in the relatively wealthy countries that belong to the Organization for Economic Cooperation and Development.

That created a new, and perhaps unrealistic, "concept of retirement as an extended period of leisure, " Mercer consultant Dreger says. "You'd take long vacations. That was the Golden Age."

Then came the 21st century.

UNDER SIEGE

As the 2000s dawned, governments — and companies — looked at actuarial tables and birth rates and decided they couldn't afford the pensions they'd promised.

People were living longer: The average man in 30 countries the OECD surveyed will live 19 years after retirement. That's up from 13 years in 1958, when many countries were devising their generous pension plans.

The OECD says the average retirement age would have to reach 66 or 67, from 63 now, to "maintain control of the cost of pensions" from longer lifespans.

Compounding the problem is that birth rates are falling just as the bulge of people born in developed countries after World War II retires.

Populations are aging rapidly as a result. The higher the percentage of older people, the harder it is for a country to finance its pension system because relatively fewer younger workers are paying taxes.

In China, the 65-and-older population will rise from 11 percent of the working-age population in 2010 to 42 percent in 2050. In the United States, this old-age dependency ratio will rise from 20 percent to 35 percent.

In response, governments are raising retirement ages and slashing benefits. In 30 OECD countries, the average age at which men can collect full retirement benefits will rise to 64.6 in 2050, from 62.9 in 2010; for women, it will rise from 61.8 to 64.4. Italy is raising the age from 59 to 65.

In the wealthy countries it studied, the OECD found that the pension reforms of the 2000s will cut retirement benefits by an average 20 percent.

Even France, where government pensions have long been generous, has begun modest reforms to reduce costs. France has raised the number of years people must work before they can receive a full pension from 41.5 to 43. More changes are likely coming.

"France is a retirees' paradise now," says Richard Jackson, senior fellow at the Center for Strategic and International Studies. "You're not going to want to retire there in 20 to 25 years."

The fate of government pensions is important because they are the cornerstone of retirement income. Across the 34-country OECD, governments provide 59 percent of retiree income, on average. The government's share ranges as high as 86 percent in Hungary. In the United States, the world's largest economy, it's about 38 percent.

If rich countries don't cut pension costs even more, says Standard & Poor's, a credit-rating agency, their government debt will more than triple as a percentage of annual economic output by 2050. The debt of most countries would drop to what is commonly called junk status.

Many of those facing a financial squeeze in retirement can look to themselves for part of the blame. They spent many years before the Great Recession borrowing and spending instead of setting money aside for old age. In the U.S., households took on an additional $5.4 trillion in debt — an increase of 75 percent — from the start of 2003 until mid-2008, according to the Federal Reserve Bank of New York. The savings rate fell from nearly 13 percent of after-tax income in the early 1980s to 2 percent in 2005.

The National Institute on Retirement Security estimates that Americans are at least $6.8 trillion short of what they need to have saved for a comfortable retirement. For those 55 to 64, the shortfall comes to $113,000 per household.

"People are going to be shocked at how little they have," says Alicia Munnell, director of Boston College's Center for Retirement Research. "For some middle-income people, it will mean canceling the RV" — the recreational vehicle that has become a symbol of retiree life in America. For those worse off, she says, it could mean an old age in poverty.

THE FINANCIAL CRISIS MAKES THINGS WORSE

As if demographics weren't burden enough, the outlook became worse when the global banking system went into a panic in 2008 and tipped the world into the worst recession since the 1930s.

Government budget deficits — the gap between what governments spend each year and what they collect in taxes — swelled in Europe and the United States. Tax revenue shrank, and governments pumped money into rescuing their banks and financing unemployment benefits and other welfare programs.

That escalated pressure on governments to reduce spending on pensions or raise revenue. Hungary took one of the most draconian steps: It demanded that its citizens surrender their private retirement accounts to the government or give up their government pensions. Poland seized a portion of private retirement accounts. Ireland imposed an annual tax on retirement accounts.

The Great Recession threw tens of millions of people out of work worldwide. For many who kept their jobs, pay has stagnated the past five years, even as living costs have risen, making it tougher to save for retirement. In addition, government retirement benefits are based on lifetime earnings, and they'll now be lower. The Urban Institute, a think tank in Washington, estimates that lost wages and pay raises will shrink the typical American worker's income at age 70 by 4 percent — an average of $2,300 a year.

Leslie Lynch, 52, of Glastonbury, Conn., had $30,000 in her 401(k) retirement account when she lost her $65,000-a-year job last year at an insurance company. She'd worked there 28 years. She has depleted her retirement savings trying to stay afloat.

"I don't believe that I will ever retire now," she says.

She also worries about her children, all in their 20s: "I don't think my three sons will ever retire" because pay raises have been so weak for so long.

Less money from a government pension isn't the only factor weighing on future retirees. When the financial crisis struck five years ago, the world's central banks cut interest rates to record lows to stop the economic free-fall. That also punished people with much of their money in investments that pay interest.

"The low-interest rate environment has been brutal," says Catherine Collinson, president of the Transamerica Center for Retirement Studies. She points out that $500,000 in savings would yield $25,000 a year at an interest rate of 5 percent, just $2,500 at 0.5 percent.

The crisis also frightened many away from the stock market. Stocks can be riskier than other investments, but they yield more long term. Many investors have shunned stocks while the world's stock markets have soared. In the United States, the Dow Jones industrial average has risen nearly 150 percent since March 2009. Japan's Nikkei index is up 56 percent just this year.

The past five years have been so tumultuous that some people have been reluctant to invest at all.

Olivia Mitchell, who studies retirement at the University of Pennsylvania's Wharton School, says her grown daughters rebuffed her when she urged them to save more for retirement. Stocks, they said, are too risky. And bonds don't yield enough interest to be worth the bother.

THE ASIA CHALLENGE

In Asia, workers are facing a different retirement worry, a byproduct of their astonishing economic growth.

Traditionally, Chinese and Koreans could expect their grown children to care for them as they aged. But newly prosperous young people increasingly want to live on their own. They also are more likely to move to distant cities to take jobs, leaving parents behind. Countries like China and South Korea are at an "awkward" stage, says Jackson at the Center for Strategic and International Studies: The old ways are vanishing, but new systems of caring for the aged aren't yet in place.

Yoo Tae-we, 47, a South Korean manager at a trading company that imports semiconductor components, doesn't expect his son to support him as he and his siblings did their parents. "We have to prepare for our own futures rather than depending on our children," he says.

South Korean public pensions pay an average of just $744 a month. South Korea has the rich world's highest poverty rate for the elderly. It has one of the world's highest suicide rates for the aged, too.

China, too, will struggle to finance retirement. China pays generous pensions to civil servants and to urban workers who toiled in inefficient state-owned factories. These workers can retire early with full benefits - at 60 for men and 50 or 55 for women, depending on their job. Their pensions will prove to be a burden as China ages and each retiree is supported by contributions from fewer workers. The elderly are rapidly becoming a bigger share of China's population because of a policy begun in 1979 and only recently relaxed that limited couples to one child.

The World Bank says the cost of those pensions could eventually reach twice the size of China's annual gross domestic product. That would put the bill at more than $16 trillion.

China is considering raising its retirement ages. But the government would likely meet resistance. "I heard that the authorities might postpone the age of the retirement, but I sure hope not, since I've already worked for almost 42 years," says Dong Linhua, 59, a former Shanghai factory worker and now a real estate investor, who owns three apartments and two small shop spaces.

China also tightly regulates investing, limiting access to assets that are more likely to generate the returns workers need to build a healthy retirement account.

"Things that you and I take for granted, like being able to invest in mutual funds or being able to buy stocks and bonds, are in their infancy in China," says Josef Pilger, leader of Ernst & Young's Asia-Pacific pension practice in Sydney, Australia. "The biggest fear the Chinese regulators have is: What if we relax investment restrictions and we have a financial crisis? People will be on the street, saying: 'You let me play with fire, and I burned my fingers.' "

THE END OF TRADITIONAL PENSIONS

Governments aren't alone in cutting pensions. Corporations are, too. The traditional defined-benefit pensions they long had provided are vanishing. Companies don't want to bear the risks and costs of guaranteeing employees' pensions. They've moved instead to so-called defined-contribution plans, such as 401(k)s in the U.S., which shift responsibility for retirement savings to employees.

The problem with these plans is that people have proved terrible at taking advantage of and managing them. They don't always enroll. They don't contribute enough. They dip into the accounts when they need money.

They also make bad investment choices; often buying stocks when times are good and share prices are high and bailing when prices are low. Investment returns from defined-contribution plans are typically 0.76 percentage points lower than returns on defined-benefit plans, according to the consulting firm Towers Watson. That difference adds up: At a 5 percent annual return, $100,000 becomes $432,000 after 30 years. At 5.76 percent, it's 24 percent higher — $537,000.

Many have raided their retirement accounts to pay bills. In the United States, 26 percent of workers with 401(k) and other defined-contribution plans take loans or make hardship withdrawals before they reach retirement, according to a study by HelloWallet, which offers online services that help people with their finances. Working Americans withdraw $70 billion annually from retirement accounts — an amount that's 40 percent of the $175 billion put in. Employers add an additional $118 billion.

Retirement specialist Teresa Ghilarducci of the New School for Social Research in New York says the voluntary plans "work for a robot with an Excel spreadsheet," not for people trying to pay bills and care for children who aren't thinking decades ahead to retirement.

NUDGING WORKERS TO SAVE

Several countries are trying to force — or nudge — workers to save more for retirement.

Australia went the furthest, the soonest. It passed a law in 1993 that makes retirement savings mandatory. Employers must contribute the equivalent of 9.25 percent of workers' wages to 401(k)-style retirement accounts. (The required contributions will rise to 12 percent by 2020.) Australians can't withdraw money in their accounts before retirement.

When politicians were debating the plan, only about half of Australians supported it. Within six months, approval rose to 85 percent. The difference: Workers started receiving statements that showed retirement savings piling up, says Nick Sherry, who helped design the program as a cabinet minister.

In October 2012, Britain required employers to start automatically enrolling most employees in a pension plan. At the start, contributions must equal at least 2 percent of earnings, half provided by employers. By 2018, contributions must rise to 8 percent, of which 3 percentage points will come from employers.

In 2006, the United States encouraged companies to require employees to opt out of a 401(k) instead of choosing to opt in. That means they start saving for retirement automatically if they make no decision.

EASING THE PAIN

Rebounding stock prices around the world and a slow rise in housing prices are helping households recover their net worth. In the U.S., retirement accounts — defined-contribution and defined-benefit plans combined — hit a record $12.5 trillion the first three months of 2013, according to the Urban Institute. They've gone higher since.

However, net worth is merely climbing toward a level considered inadequate at its peak in 2007. Boston College's Center for Retirement Research says the recovery in housing and stock prices still leaves 50 percent of American households at risk of being unable to maintain their standard of living in retirement. That's down from 53 percent in 2010 but up from 44 percent before the Great Recession hit in 2007.

Only half of all Japanese say they've even thought about how to finance their retirement. And 63 percent are counting on getting most of their income from a government pension system that's going broke.

When they look into the future, retirement experts see more changes in government pensions and longer careers than many workers had expected:

— Pension cuts are likely to hit most retirees but should fall hardest on the wealthy. Governments are likely to spend more on the poorest among the elderly, as well as the oldest, who will be in danger of outliving their savings.

— Those planning to work past 65 can take some comfort knowing they'll be healthier, overall, than older workers in years past. They'll also be doing jobs that aren't as physically demanding. In addition, life expectancy at 65 now stretches well into the 80s for people in the 34 OECD countries, an increase of about five years since the late 1950s.

"My parents retired during the Golden Age of retirement," says Mercer consultant Dreger, 37. "My dad, who is 72, retired at 57. That's not going to happen to somebody in my generation."

 

Comments

From the Grave

You could die of old age while reading that article.

Stop It

I thought the same and just skimmed it. A whole lotta words for naught.

Simple Enough II

+1!

From the Grave

I'll stay plenty busy digging...

Contango

Re: "The higher the percentage of older people, the harder it is for a country to finance its pension system because relatively fewer younger workers are paying taxes."

Reads like the classic definition of a financial pyramid scheme.

If a private entity operated a scheme like public pensions, the govt. would close it down and place the officers under arrest and try them for fraud.

wetsu

As I have long maintained, the politicos knew full well what they were doing while suckling at the teat of the Boomer generation. Now they feign outrage and surprise when the fruits of their greed come due? It's ok, though, grandpa told us that the R's and D's would take care of everything. BTW, I am fed up with supporting the younger generations of free loaders (tongue in cheek). It was just ducky when I was footin' the bill, wasn't it? Now that the Boomers who supported the whole shebang are retiring it is time for belt-tightening and sacrifice on the part of retirees, eh? There are a bunch of scam artists in Columbus, Washington, and Wall Street that should be the first ones sacrificed. It's ok, boys and girls. After all, they're good repubs and dems, the radio said so.

Lemmings.

Contango

Re: "It was just ducky when I was footin' the bill, wasn't it?"

And the Boomers for all the cries about them being the "Me Generation" are becoming the "Sandwich Generation."

Millions of kids who can't make it are coming home to live with Mom & Dad.

Also, millions of Depression era babies who can't make it financially are moving in with their Boomer kids.

Millions of Boomers are getting it from both sides - some of 'em are my neighbors!

Nemesis

Contango, the problem is, the boomers brought this upon themselves by voting in more and more paternalist nannystate socialist government. I could retire tomorrow on what I've paid in taxes so far to support the welfare state.

Contango

Re: "by voting in more and more paternalist nannystate socialist government."

Currently the Boomers are a mere fraction of the problem.

IMO, ya gotta go back to Wilson (income tax) and FDR (WPA, SS, et al). This crap has been festering for decades.

Try reducing entitlement spending and the AARP comes out in force.

Approx. 10K Boomers turn age 65 EVERY DAY!

It will be increasingly difficult for them to vote against their own best interests.

Nemesis

Yes, well, people voting out of their own interests instead of any kind of principle is what got us in this mess. That's part of why the Founders didn't want direct election of senators.

wetsu

I agree with the premise of people voting out of their own interests being part of the problem. However, the people who most act out of their own interests are politicians, the very ones that essentially hold the keys to the money. Why do they respond to senior groups? Because they vote, thus, the cowards give plenty of attention to the prevailing attitudes of said seniors. The point is we must find a way to hold these numbskull's feet to the fire. I initially held out hope for the tea party, but, no more. I also know plenty of well-informed, principled older folks who stand up for themselves for good reason.

deertracker

Unless you work on Wall St. pooh!

Contango

Re: "Wall St."

OR are a big govt. bureaucrat Bambie.

Really are you ...

Who cares, the only ones who count are our congressmen. Lets lay around and wait for them to bring jobs here for us. They and the president are bending the constitution so we don't have to think about what is good for us.

But people on here blogging get upset at me for challenging laws of physics and laws concerning electricity. I have opened my eyes and am trying to create jobs/careers people can retire from comfortably even in later stages of the game. But people want me to wait, because the government says clean coal is the answer. God Bless the USA, and Happy New Year.

deertracker

Good post!

Simple Enough II

So what is your option you propose, I must have missed it.

Really are you ...

Create a new business that will open so many new doors of opportunity. Employing 750 people plus from the start. This could replace all combustion engines. This could let people generate electricity in their home. This will solve the need to combust fossil fuels now, and not pushing this problem onto our children. Power outages will be for not. If people did not need to rely on distant power stations and an outdated grid system. Our military will be able to go on deployments without the need to fuel their modes of transportation. Military soft sites would not need those loud generators to supply electric power. This will change things overall for the better. And its size is compact, no battery back up. A generator that does not need external forces to operate. No fossil fuels, nuclear, sunlight, wind or water needed to operate.

This will not make the nuclear engineer obsolete, because the nuclear rods will be around for thousands of years. We will need these engineers to prevent accidents like Chernobyl and Fukushima. With what I am doing, there will be a need for electrical engineers everywhere.

There is 2,080 hours working in an 8 hour working shift per year. At 18 dollars an hour, that comes out to 37,440 dollars a year. At 25 dollars an hour, That is 52,000 dollars a year. At 30 dollars an hour, that is 62,400 dollars a year. At 36 dollars an hour, that is 74,880 dollars a year. 36 dollars an hour is quite a bit for an hourly rate, but if you value your employees contribution to success. Is that even enough? Breaking the 36 dollars down comes put to a penny for every second for every minute of every hour worked. But that penny for every second covers multiple things such as attention to detail, safety awareness, and physical labor. That would be a lot of money, yes. But projected sales would easily cover it, with money left over for R&D. Yes company taxes would be astronomical, payroll taxes would be quite high. But, so be it. We need people gainfully employed around here, with full time hours.

Contango

Re: "Create a new business (snip)"

A legitimate entrepreneur would spend less time writing about it and more time actually working to make his/her dream into a reality.

"Genius is one percent inspiration, ninety-nine percent perspiration."

- Thomas Edison

Really are you ...

Stalemate. I have gotten advice from so many people, and no real advice as to what the next step is. Patent it, don't patent it, sell it to the big three autoakers, get patent pending and build, sell each unit for this much. Who would be able to afford that? Once you patent that, you'll be taken out in a couple hours because you are messing with big oil profits. What good would that be if the patent is locked in my name for 17 years? And no one could use it to improve life? I would be messing people's stock market oil shares up. They would be happy. I would be taking money from the government in gas taxes and utility taxes. I am not a business savvy person. As my luck would have it, I have been fortunate enough to be employed by local factories who have felt the need to leave Ohio. Besides living pay check to pay check and limited funds, I need to figure out a course of action that is much larger than I can handle on my own. I am not a business savvy person.

Contango

Re: "Stalemate"

Reads potentially like fear of success.

Every decision has pluses and minuses.

A prudent, rational individual makes a decision, sticks with it and has no regrets.

A journey of a thousand miles begins with a single step. - Tao Te Ching

IMO, put your shoes on and get out the door.

Really are you ...

Edison was, besides many other titles, a businessman.

Contango

Re: "a businessman."

Take a tour of the Edison Museum in Milan.

He resolved never to produce an item which was unprofitable.

He made tons of discoveries, like the "Marconi Effect," which he never capitalized on.

At the time of his death, he had over 2000 notebooks filled with ideas.

He tried over 10,000 different elements to function as filaments in the light bulb. IMO, most would have given up after a few hundred.

Persistency pays.

Really are you ...

Off topic, but, I went over by his birthplace during the Melon Festival to find out exactly where it was. I had planned to return at a later date for inspiration. But figured that since he only lived there until he was, I think, in his early teens, that it wouldn't contain very much of his work. When he was in New York, he had quite a few scientists working for him. Tesla on the other hand did everything on his own. Tesla deciphered everything in his head before he built it. Tesla was labeled a mad man and died a lonely old man trying to improve life for everyone. But Tesla's relentless pursuit of doing everything in 3's has helped a lot.

Contango

Re: "it wouldn't contain very much of his work."

You'll be surprised.

Again: Take a tour of his boyhood Milan home.

Perhaps it'll give you some inspiration.

Yes, Tesla was a genius.

Unfortunately, History is full of intelligent people who died broke.

"Truckin' like the doodah man
Once told me 'Gotta play your hand
Sometimes the cards ain't worth a dime
If you don't lay them down'"

- Truckin', Grateful Dead

Kingsin

Contango, I responded to reallyareyou in a previous thread he had posted concerning his revolutionary world changing energy production idea- and was only able to squeeze the vaguest of info concerning it. From the little I could gather, I felt he was speaking of some form of perpetual-motion gizmo- which I'm sure you know the Patent-Office won't even consider. IMO, from his sporadic postings and their vagueness- I would put my money towards him actually laying the groundwork for a scam. JMO

Contango

Re: "I responded to reallyareyou (snip)"

I don't disagree with what you wrote.

IMO, it's largely a case of: 'Put up' or 'shut up.'

As for "scam"; I only invest in what I understand, kinda the ol' Peter Lynch approach.

I used to have guys phoning and wanting me to invest in their oil and gas limited partnerships. They usually ended up slamming the phone down on me. THEN I knew it was a hoax.

Someone with a legitimate opportunity wouldn't phone someone just to piss 'em off. lol.

Really are you ...

Of course, I am not going to spill the beans on a blog site. This will happen, then that will happen..., and there you go. Constant electrical generation. And then some one else steps in and says I have this working prototype, and this is how it works ( thank you really are you kidding me!).

Really are you ...

You would think that people would be more upset with the pursuit of and discovery of antimatter. It has happened, physics will change.

Lol. When I was in high school, Pluto was a planet.

Really are you ...

So besides the new jobs/ careers created. People could purchase an all electric automobile, and not have to buy any type of fossil fuels to move it forward. Long term saving money. When people purchase the household version, no grid reliance. I suppose their would be some kind of credits, and it probably be tied into their home loan. Long term no utility bills, just water, sewer, and a mortgage. I don't know about the buy back from the electric company, when the device is not supplying electrical needs to the owners home electricity can be fed back into the grid. O' and I forgot about the possibilities for lawn mowers, and tractor trailer combination vehicles.

Contango

Re: "So besides the new jobs/ careers created."

Most long time readers GOT IT a long time ago.

NOW get out and DO it!

Those that can DO.

Those that CAN'T, just talk about it AND talk about it AND talk about it, etc.

As I've written before: Reads like you need a venture capitalist or an angel investor. Someone with business savvy and most importantly money.

Happy New Yr. and good luck!

Unassumer

Just get your kids and grandkids out there and put them to work because I am planning on getting my check at 62 whether it's enough or not. I might still work part-time just for something to do and extra money but I am not killing myself for nothing anymore.

Contango

Re: "I am planning on getting my check at 62"

Good advice.

When buying life insurance, you're betting the ins. co. that you will die. They're betting that you won't.

If you delay benefit payments from Social Security (annuity), with the expectation of a future larger monthly check, you're betting that you're gonna live long enough to collect it.

The govt. is betting that you won't.

"Nem di gelt" (Take the money) - Henny Youngman

donutshopguy

Do the math. If I take my Social Security at 62 years old it will take me to the age of 75 to make up the money if I wait to 66 years old. God only knows if SS will be around at that time . I'm sure the benefits will be reduced.

I'd be happy if the government just paid me the money I put in over the years in a lump sum. I don't even care about the interest.

It's going to get ugly if you didn't prepare.

deertracker

It is going to get ugly even if you did prepare.

Contango

Re: "even if you did prepare."

How would you know?

Enjoy the 'crumbs' that the govt. will give you in shared poverty.

deertracker

Happy New Year pooh! You can break out the good stuff tonight. BTW, that's how it is suppose to taste! Goes well with "crumbs".

donutshopguy

I'm prepared for the ugly part too.

deertracker

Good for you sprinkles!

Contango

Re: "that's how it is suppose to taste!"

Enjoy your Kool-Aid & vodka Bambie. Happy New Yr.!

Fromthe419

Good article, but rather long winded. I'm not sure what will bankrupt the US first, unfunded liabilities (SS, medicaid, etc), costs of servicing our debt or a run on treasury notes. I agree with deertracker and donutshopguy...it is going to get ugly. We are living at a very interesting time in history, no one has every seen a global currency collapse.

KURTje

We own nothing, we only occupy time & space. You folks over 60 realizing now how hard it will be for your grandkids?

Contango

Re: "You folks over 60 realizing now how hard it will be for your grandkids?"

This defeatist mentality never changes; throughout History every generation thinks that they have had it worse than preceding ones.

"I am an old man and have known a great many troubles, but most of them never happened."

- Mark Twain

The Big Dog's back

This coming from the king of "defeatist mentality".

Contango

Re: "This coming (snip)

Thanks for that report from Bizarro World.

Darwin's choice

Well, if it's getting ugly, the past 5 years of failure is setting the stage.

Happy New Year everyone!

KURTje

How dumb can you be pooh? That is just one of the many truths about life. When I die the land I "own" goes with me? Right...btw, her child is with grandma for the night & Shelia & I will enjoy each other this evening & the 1rst New Year's Day also. Start your New Year right Winnie.....don't be a hater.

Contango

Re: "When I die the land I 'own' goes with me? Right..."

To quote you: How stupid can you be Kurtie?

Your heirs or the State gets your real estate.

Got a Last Will and Testament Kurtie?

BTW: Nobody cares what you do with "Sheila" and only white trash would write about it on a public forum.

KURTje

Knew it. A new year yet the same venom from you. What a miserable life you lead. So much more to living than materialism. People like you validate why America is in dire straits.

Contango

Re: "A new year yet the same venom from you."

Remember kurtie ol' boy: When you point a finger, there are three pointed back at you. :)

People like you whining about how unfair the world is "validate(s) why America is in dire straits."

grumpy

Re: " That is just one of the many truths about life. When I die the land I "own" goes with me? Right.."

Well kurtie the land and other assets I have will go to where I wish them to go, be it to kids, grandkids, great-grandkids, or whatever charity I wish them to go to. I won't care what these folks do with them as I won't be around. The reason to save is so I don't have to depend on gov't or charity to take care of me. If SS and medicare slow down or even stops, it won't make me that much difference. I have saved and can take care of my needs and my wife's needs. I won't be depending on gov't for my pension, the gov't pension that the gov't has just decided to cut, or slow down the increase for those on it. I wonder if that is just the beginning of gov't cuts for pensions? The gov't already has those votes and needs to offer more programs for catching new voters. Gov't must figure they have those on gov't pensions, SS, and medicare already owned. I'd rather depend on me and what I have saved than on what gov't will give me, they can always cut it or even stop paying. They just need to slow the flow to those receiving. Kind of like having the frog in warm water and slowing raising the heat till its boiling frog legs for supper.

Contango

Re: "The gov't already has those votes and needs to offer more programs for catching new voters."

Yea, the progressive-socialists 'stupidly' told the truth about needing the young "Invincibles" to help offset the additional costs associated with the newest unfunded entitlement, Obam☭are.

It's unfortunate that they continually lie about the duel pyramid schemes of SS & Medicare.

The massive transfer of wealth from the youth to seniors is the largely unknown story.

Hedge fund mgr. Stan Druckenmiller often speaks out on this issue.

Google: "Druckenmiller Sees Storm Worse Than ’08 as Seniors Steal "

Again unfortunately, ignorance surrounding economics and personal finance are at abysmal levels in the U.S.

KURTje

Smells to be you. Fortunate to have many great things in my life. Friends, laughter, contentment. That was my real point. Feel free to bow before your life sized portrait of Marc Dreier. HAPPY NEW YEAR!!!

Contango

Re: "Fortunate to have many great things in my life "

Reads hypocritical since you still manage to find a lot to b*tch, moan & whine about there don't you kurtie ol' boy? :)

RU_KIDDING_ME

I think that employers forcing folks in their 50's and 60's out the door to make way for younger, cheaper workers so that they can keep paying the Administrative folks big $$$$$$$$$ is MORE of a problem from a humanitarian standpoint.

AJ Oliver

That article is typical right-wing alarmist propaganda. Think for yourselves, people. Start by reading "Retirement Heist" (it's in the library) - whick clearly documents how pensions are being looted. GM and Delphi are good examples. Their pension plans were rock solid until the funds were stolen by management. Your retirement will suck only if you continue to let yourselves be ripped off.

donutshopguy

AJ,

Think for yourself.

Social Security was rock solid until the funds were stolen by management. (government bureaucrats and politicians)

Your retirement will suck if you continue to let yourselves be ripped off.

AJ Oliver

Contrary to right wing mythology, the social security trust fund has well over a four trillion dollar surplus backed by the full faith and credit . .
But it is correct to point out that the government was complicit when the managers of Verizon, United, Delta, GM, Ford, etc. diverted those pension funds. It was out and out criminal.

Contango

Re: "full faith and credit . ."

i.e, Taxation.

Pensions being looted? Ain't possible. See: ERISA.

"God bless the child that's got his own." - Billie Holiday

Contango

Re: "social security trust fund has well over a four trillion dollar surplus,"

All in non-marketable securities redeemable ONLY by the U.S. Treasury, i.e. fraud and a pyramid scheme.

"In fact, since 1980 no marketable securities have been added to the Trust Funds."

Google: "Research Note #20: The Social Security Trust Funds and the Federal Budget" (SSA)

Give me $4T and I'll give you Monopoly money. Deal?

TRUST US, we're from the govt. lol.

KURTje

Right now as it is cold, just got in from snowmobiling. Fire has been going all day, hot food ready to be enjoyed, along with more canned goods from this years garden in the basement. If we lose power I'll start my small generator. DO FOR YOURSELF. Plus Shelia is here again for the night....its called living folks. That's what I was taught by my parents, who were taught by theirs.

Contango

Re: "That's what I was taught by my parents,"

Your parents taught you to scr*w single moms and write off-topic narcissistic crap on a blog?

They should be proud.

Dr. Information

The narcissist kurtje types more nonsense than I've ever seen.

Contango

Note: She comes to him.

Wassamatter too cheap or ashamed of her to take her out? lol

She must be a 'real' catch to go for a hayseed like him.

@ kurtie: When are ya gonna make an 'honest' woman outa her?

Or is it a case of: Why buy the cow when you can get the milk free? :)

KURTje

What sad lives you 2must lead. Everything need qualified ? Your St.Paul education failed you pooh. Mad Dr, because your moneyed crooks doing time? You guys are walking zombies. the end

Contango

Re: "What sad lives you 2must lead."

And your life of snowmobiling, eating and spending the night with your single mom in your little country shack is so fascinating?

Tell me more, tell me more. lol