On 2/27/2016 1:48 PM, Paul Braun wrote:
... is that we must make
drastic cuts to Social Security to help balance the budget, despite the
fact that SS has nothing to do with the budget and is funded purely by the
workers paying into it throughout their working lives.
An ambiguous statement, which could be read to say that SS is an investment retirement system, where past contributions
are saved to pay future benefits. That's not true. Current benefits are paid from current receipts; the young supporting
the old, just as those of us now on SS supported older folks when we were working.
And that's where the projected crisis comes from, when projected income drops below projected benefits. We are,
collectively, living too long, maybe. :-)
Unfortunately with living costs the way they are now, unless you were one
who was lucky enough to have a decent job most of your life and could pay a
decent amount into a retirement fund, one that wasn't decimated by an Enron
or Madoff-level fraud, or if it wasn't decimated by the stock market (one
of mine is worth half of what it was two years ago)
Unless the very long term trends change, it should be OK again in the future,
with any luck well before you need it.
The saying goes that it's better to be lucky than smart. It's a good thing I have generally been lucky, as my financial
smarts aren't much. Through no fault of my own, other than procrastination in deciding when/how to invest the results of
an enforced conversion of stock to cash, my retirement accounts have been heavily in cash through the downs of the last
year. In fact, I didn't even know they were happening until quite recently. I don't follow the market or watch/read the
news, and my statements didn't show any big changes.
, it's tough to be comfortable after retirement.
I certainly don't know what the overall statistics and individual situations are. I know that late in her life my mother
was living on a quite modest income. But two factors were very different than they are for younger people. One was that
her expenses were quite low. She didn't do expensive things, especially in the last years. With good Medicare
supplemental coverage, even her substantial medial costs didn't end up costing her much (But lordy! the paperwork!). She
didn't go out much, her house, kitchen remodel, new windows, etc., furniture, car and so on had all been paid for. She
was living "beyond her means" in a current cash flow sense, and drawing down her retirement accounts, but very slowly.
Had her health held up into her mid nineties, another ten years, it might have been time to look into a reverse
mortgage, or some arrangement with her children, who would end up inheriting the house anyway.
I'm just suggesting that simple measures of income may not tell a very accurate picture of how at least some older
people are doing. For those without assets, yes. For those with assets that reduce current expenses, and/or can be
tapped into for current expenses, I imagine there's a whole range of situations. I do see regular junk mail pushing
reverse mortgages, so I'm guessing tapping into those assets is pretty common?
Fortunate Grateful Moose
--
What if the Hokey Pokey *IS* what it's all about?
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