US Question. Will the people that have to wait until 70 to get Social Security ever get what they paid in to it back out before they die since men's life expectancy is only 77 now?
I don't think there is an earlier option for less money anymore but could be wrong.
men's life expectancy is only 77 now
That figure is average life expectancy. IE 50% of US man are expected to reach 77.
A bit of history on why 65 was originally set as the retirement age.
The first country to set retirement at 65 was the Weimar Republic in Germany (1918-1933).
The reason 65 was chosen was that at that time only 5% (1 in 20) of the German population made it to 65. Retirement and the pension was a case of "You have worked hard all you life and will die soon, this is to let your final years be a bit easy"
Over the last century, in the west at least, over average lifespan has increased markedly and the quality of life for people of advanced age has also increased.
Many government now face the issue that they cannot afford to keep paying retirement benefits for two reasons:
1: Many many more people are reaching retirement age and they are living for decades more, rather than a few years.
2: With the decline in birthrates the ratio of working people to those in retirement has changed from about 10 to 1 to about 5 to 1 and is expected to get worse in the decades to come.
This does not answer your question but gives you an idea of the issues and hard decisions societies will have to face in the coming decades.
In the US, social security is a tax on poor people earning less than~$160k. That's the bottom 90% of earners.
The top 10% of earners collect about half of the country's personal income. Each of them does have to pay SS tax on the first $160k of earned income, but clearly there's a huge pool of income that doesn't pay into social security.
That figure is average life expectancy. IE 50% of US man are expected to reach 77.
I can't access the full paper that this is in reference too, so I'm not sure how they calculate it... but isn't life expectancy usually the mean age of death? I would expect the distribution to have a left skew from people who die young, which should mean that more than 50% of US men are expected to reach 77.
Take a life table, check the column that says lx, that means how many people of the model are alive with x years, normally l_0 = 10000. Then go down until you found lx = 5000 or lx = 1/2 l_0, that x is your life expectancy at birth. If you want to know the life expectancy at any age, look for the value of lx at that age, then look in how many years that value half, that's the expectancy.
Source: I'm an actuarie and study that in college, but don't ask me to go deeper because I don't use that at my job.
I was wrong.
average life expectancy
mean age of death?
To me mean = average, so the two statements are the same.
Are you talking about median age of death?
When child mortality was very high (pre- 20 century) that was definitely the case. I am not so sure that it is now. I feel that average life expectancy will be a lot closer to 50% survival rate (median age of death) than it was in the past.
should it be 70? fuck no. its goin the wrong direction thanks to rampant, unrestrained capitalism and lack of taxes.
that said, the last thing im thinkin is 'i hope i get all mine'
no one is askin if the military will get funded... there actually isnt much difference here
Where are you getting the 70 years old number combined with the "have to wait until" logic?
In the USA you can start taking Social Security at as young as 62, with most waiting until 67 for full benefits. The only folks waiting until 70 are those that want even MORE than the full benefit.
I think they're assuming retirement age will be raised by the time they retire.
If the pattern follows from the last age raise (from 65 to 67) then the people that will be affected by an "age 70 for full benefits" may not even be born yet. The last age raise started in 1983 and just came into full effect in 2022 (for only a 2 year age increase).
Social security will be bankrupt by 2033 according to their own estimates.
https://www.ssa.gov/OACT/TRSUM/index.html
Somehow they expect to pay 80% benefits beyond that point.
Expect your income taxes to go up…and by a lot.
They don't expect to go bankrupt by 2033. That's when the surplus/reserves will run out. The system doesn't have the fixed amount of money. Current employees are constantly paying into it.
20% is the shortfall between payout vs people paying in. And it will only happen if it's not addressed. Which I'm sure will get addressed last minute or something like that.
You can start collecting at 62 and get 70% of your computed payout, which I will be doing.
The math is too hard for me given inflation and all that, but since social security rarely seems to have enough money, I'd guess they're still paying out more than they take in...?
If you make it to 62, your life expectancy is 21 more years. that mean 21*0.7 = 14.7 years worth of social security payments. Full benefit at age 67 gets you 16 years worth of payments. If they'd raise full retirement age to 70, you'd only collect 13 years of payments.
I've been coached into waiting until age 70 to get 100% of the payout. If you cash in at age 62, even once you hit 70 you'll still be getting 70% of your payout. Could you bear to wait eight more years for the 100%? You've already waited 62 years! What's 8 more?
8 years is a long time and cancer can kill you in two, especially if you don't have good doctors and they don't catch that it metastasized already. Ask me how I know.
8 years are 2 election cycles. Much can happen in that time.
Could you bear to wait eight more years for the 100%? You’ve already waited 62 years! What’s 8 more?
It's easy to think that way in your younger years. That's a much more difficult request for people actually in their 60's, lots of people make it to that age with broken down bodies, various illnesses/prescriptions/whatnot & probably can't see themselves continuing to do the work thing throughout their 60's let alone 70.
There's also the problem of holding down a job at that age, ageism exists in a lot of industries so a lot of these people are first in line for layoffs / taking a massive pay cut from their earlier jobs vs being a Walmart greeter or just being unemployed.
But sure... in theory if you manage to stay fit & healthy well into your old age & are able to hold onto your normal job then sure working into your 70's or more could be plausible. People probably worry less about that stuff once they're higher up on the corporate ladder - though at that point they should already have fat 401K plans & other investments so the social security aspect becomes less relevant.
My dad waited until 70, and then by age 72 began a severe decline in health which eventually saw him homebound with a feeding tube, only leaving the house for doc appts or trips to the ER. I am quite certain if he had a do-over he would have retired earlier and enjoyed his 60s instead of working at his boring job.
I think if you reach 62 and you’re gainfully employed and truly enjoy what you do, there’s nothing wrong with holding out for more benefits. But if you are able to retire earlier, I can’t recommend continuing to spend your days doing work you don’t enjoy because “what’s 8 more years”. Those 8 years could be your big chance to enjoy the fruits of your labor.
But what if you invest it for those 8 years?
Don't watch kurzgesagt's video on "South Korea"* getting older, if you don't want to know the awful answer to that.
People will have and get social security paid. But the environment wars and mass immigration will be the answer, which means you'll be looking at 20 years of conservatives bitching and whining.
Want to avoid it on a personal level? Emigrate to north europe. Sad, but it is what it is.
video is more general than that. But they used korea as the clickbait.
There is an early option for less money.
You can start at 62 but you get twice as much if you wait until 70.
What a gamble.
I get $2,177 a month at 62, $2,681 at 65 (Medicare age), and $3,836 at 70. I also have a pension, and a 401K. There is an incentive to work longer, but I don’t need to. Most of the people I work with retire around 65.
What's twice as much as $0?
I don’t think there is an earlier option for less money
Sure there is, go to the SSA website itself the earliest eligibility is 62
https://www.ssa.gov/retirement/eligibility
You can also register yourself there & see your own estimates based on when you expect to claim social security.
You really need a Vegas odds maker and and epigenetics expert to figure the over and under.
I'm 62 I'm hoping to work to 65-70 to get as much as I can before I kick the bucket.
Uh no, if they did then everyone that lived past average life expectancy would have issues.
I expect the issue will need to get addressed in the future, especially as the wave of millennials retiring will be far worse than the boomer wave.
I wouldn't be surprised if it gets combined with a change in qualification age for Medicare. You push Social Security age qualifications up but push Medicare down to put the added healthcare costs on the Federal Government instead of the states. It would likely involve a slow ratchet up rather than an immediate jump. I can also see the deal include ditching the social security tax cap, or maybe adding a new tier.
Social security never made any sense to me anyway. Why not just make the economy healthy so that people can save into old age? Perhaps invest a little into financial literacy so someone doesn't blow all their savings in Vegas when they're 45. It's frustrating the the government's like, "You can't spend that money. We don't think you're smart enough to plan for the future, but we're ethical enough we'll keep it for you and return it to you when you're old and grouchy."
Average life expectancy at birth is 77, because of people dying along the way for various reasons. Life expectancy at 65 is 83. The average person who makes it until 65 will live until 83
The federal government is the sole issuer of currency. When the federal government spends, it credits recipients accounts with the press of a keystroke. The money is created from nowhere. When the federal government collects taxes (social security, etc) it debits the accounts of taxpayers effectively deleting that money from existence. If the government issued social security payments that exceeded the amount it collected, it would be creating money, which is one of its functions.
This is not at all how the federal reserve and treasury department work.
The fed does create money, but not directly. They control the reserve rate, which determines how much banks can lend over backed deposits, which in turn affects the amount of currency (not just physical but also digital) in circulation.
They can also issue or absord treasury notes and bonds to impact money supply, though this is fairly small compared to the first method.
Lastly, the treasury can print physical, paper or coinage money. This called "fiat currency" by the way. This, however, accounts for an even smaller portion of the moneg supply than bonds.
In short, the government cannot, does not, and will not simply "create money from nowhere."
Please avoid posting false information.
Federal Reserve Bank Chairman Ben Bernanke says that money is spent by the federal government simply by changing numbers in bank accounts.
"For further support we can just listen to Federal Reserve Bank Chairman Ben Bernanke. When asked “Is that tax money that the Fed is spending?” he replied, “ It’s not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed.” Mosler says, “the Chairman of the Federal Reserve Bank is telling us in plain English that they give out money (spend and lend) simply by changing numbers in bank accounts. There is no such thing as having to ‘get’ taxes (or borrow) to make a spreadsheet entry that we call ‘government spending’.”
It is that simple. How does the government spend? “Keystrokes,” says Wray. The money does not come from anywhere, it is created by the currency-issuer. Thus, taxing and spending are functionally two completely separate operations. The government issues the money with a few keystrokes at the Fed first, and then it taxes, removing some from circulation."
https://medium.com/@nicholasadiaz7/on-the-role-of-taxes-mmt-707fb4b3b80b
When the government approves civil projects such as infrastructure projects, the payments are considered issuing of currency according to modern monetary theory.
From Wikipedia regarding governments with Fiat currency: "When a government spends money, its treasury credits its operating account at its central bank and deposits this money into private bank accounts. This money increases the total deposits in the commercial bank sector."
Social security is a Ponzi scheme. Every Ponzi scheme has an end. The Fed has been able to keep it going longer than normal by "printing" money, but it can't do that forever. We are just now starting to see the beginning pangs of inflations. It will inevitably get worse.
I thought it was funded by taxing the working people to fund retiring people? Is there currently a shortfall?
At this point I'm just assuming that by the time I'm "retirement age" there won't be any social security anymore, and I'll just have to keep working until the day I either drop dead or win the lottery
Even if social security was still paying out it’s not like you could retire on it anyway. You need a lot more.
Start an IRA and put a few bucks a month in to buy shares of a mutual fund. Every penny you can invest in retirement will pay off when you do retire, and the sooner you can start, the better.
No average year of IRA return will beat the 6.8% interest or more that a lot of us are paying on student loans debt.
I'll certainly drop before I am able to retire.