My sister's rant about men with pensions and Soc. Sec.
My older sister was born in January of 1947. (I was born in December of 1950.) She got married right out of high school. Her first marriage in 1966, lasted 25 years, (although, truth to tell, the last nine and half years were a prolonged divorce battle.) Her second marriage began in 2000, and is happily ongoing.
About twenty years ago, my sister started ranting about how the problem with the world was men with pensions. I believe that her divorce battle led her to that belief. Her first husband was a police officer, who, after working on the force for twenty years, retired at the age of 44 with a full pension. He is now 64 and has been receiving a full pension of $72,000. for twenty years. His father and grandfather both lived into their late 80's, so by the time her ex- dies, he could possibly have received a full pension for twice as long as he actually worked at his job. (Is there any wonder why we're in such a screwed up economic state? But I digress.) I give all that information as background.
Last weekend, my sister let loose with a new variation on her rant, which I thought I'd run by the brainy people here and see what they think about it. Her new rant is that the Social Security ages of people with pensions needs to be raised to become more closely aligned to life expectancy, and that people with pensions should not be eligible for early SS benefits.
According to her, people nowadays are retiring too young and living too long on retirement benefits, and people with pensions which kick in after, say, 20 years, are retiring early and milking the Soc. Sec. system simply because they can. (yes, I know. insert here, the dog licking his balls joke) In other words, our golden years have become our golden decades and decades. (Golden Generations?)
Her example goes like this: "Let's say you retire at age 58 with full pension benefits and full medical benefits. Your pension is, let's say, approx. $85,000/yr. If you were born in 1946, according to Social Security, you are able to begin collecting a reduced Social Security amount begininng at age 62 or full benefits at age 65."
My sister suggests that the individual collecting a full pension from retiring at age 58 (DOB 1946) should no longer be able to start collecting partial SS at 62. We should raise their age of eligibility for SS to 72.
Being completely un-informed on this subject, I throw it out to the masses for feedback. What are your thoughts on this? ... And remember, it's not my idea, it's my sister's. I'm just posting this so I have something to say to her in response the next time we have dinner together.
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Your sister is not living in the world most Americans inhabit. Those of us that enjoy defined-benefit pensions are a small fraction of those without such certainty. And the existing pensions are rapidly evolving away from what she describes.
The ages for SS and private pensions are in fact being raised, and given the uncertainty most of us face over health care, few are retiring before 65. And I intend to work until I'm not effective anymore, rather than stop early. Unfortunately, Baby Boomers holding onto their jobs reduce the openings for our children.
The ex who retired from the police is such a tiny issue, compared to the wealth-inventing debt structures we are now having to demolish as unsafe.
March 20, 2009 5:50 PM | Reply | Permalink
I wasn't sure I should comment since I am not brainy. Tom has the real points here. I mean the pensions do not look that good anymore.
You can take care of the problems by changing tax laws. If you really do get 90 g's a year, your ss
will be counted as taxable in full. It is kind of like that now, I think it is 1/2 or something like that.
COLA is something that can have a real affect on all this.
Oh, and really fine blog Mr. Smith. A topic people, MSM and other blogs are skipping over.
Being a worthless person, I assure you I will take my pennies from ss at 62 unless fortunes change.
March 20, 2009 6:05 PM | Reply | Permalink
I am without any real pension, other than a tiny one from the DGA for a six month stint I did back in 1976. My sister works as a paralegal at a big law firm, so she moves in higher salaried circles than I do.
March 20, 2009 6:29 PM | Reply | Permalink
Aside from the part of her rant where people are "milking" the syatem, which is ridiculous if they are doing what is legal, it is a valid argument because Social Security was "invented" when the average lifespan was much shorter, lots of people died before collecting a cent, and more manual laborers existed who were basically no longer capable of working by 65 as their bodies had worn out and there weren't many titanium joint replacements and heart bypasses going on.
But it's not like no one has ever been aware of the problem. Does she know an adjustment was already made, put into law way back in 1983:
http://www.ssa.gov/pubs/ageincrease.htm
Maybe that will shut her up?
As for police pensions, they famously, or infamously if that is your wont, have long gotten very generous ones after relatively short length of service. I believe basically what's behind that originally is because they risk their lives on the job, and it was recruitment enticement, similar to military. After it became standard in police labor contracts, it's hard to take it back, and it's really pretty standard, communities can't compete without doing it. Many firefighters get similar, a good pension and retirement while still relatively young. I still wouldn't want to do it.
March 20, 2009 7:01 PM | Reply | Permalink
Use the social security calculator at the link, for her birthday of 1947, tell her she will have to wait for full retirement until 66. Will that make her happy, or jealous of the "greatest generation" who got both the benefit of retirement at 65 and much improved lifespan at the same time? They also grew up during the Depression and had WWII to "enjoy" during their best years of their lives. Does she really begrudge them those few extra years on the golf course?
March 20, 2009 7:08 PM | Reply | Permalink
Whoa! Pensions of $85,000 a year?? Do I know anybody like that? No, I don't.
And, contrary to what you (or your sister) might hear, not even a retired union member from Detroit's auto plants makes anywhere near that much. I know--because more than half my family qualifies.
I don't know what kind of circles your sister ventures into but I can tell you that those hypothetical $85,000/year pensioners are few and far between.
(Let me guess--your sister voted for Bush twice?)
March 20, 2009 8:37 PM | Reply | Permalink
No, actually she's a Democrat who hates Bush and his crowd as much as anyone here, and has voted Democratic forever.
Maybe I didn't present this in the right light. As someone who found a job that she's very good at doing very late in her life, she doesn't want to retire, so she's not looking to quit anytime soon, nor is she jealous of anyone in the 'greater generation' and doesn't begrudge anyone anything. Our mom is part of that generation and will be 91 in August, and thank God for Soc. Sec. and Medicare.
No, she is simply looking at the system in frustration and is, in her own way, trying to think of a solution.
Why are excessive pensions not negotiable? I understand the theory of police and firemen doing a dangerous possibly life-threatening job, but they are very well compensated for that job. I see her point that unions insisting on the constant escalation of pay and pension has not had the effect originally intended, it has, like the bankers and wall streeters, led to excess.
And before I'm accused of being anti-union. I'm not. I've been a member of three unions and believe owner and management need to be kept in check with the power only a union can offer.
But, where does a union's responsibility lie when it comes to serving it's members? If all there is to a union is demanding higher wages and bigger pension plans, then aren't they slitting their own throats in te long run?
If the $85,000. a year pension seems excessive, you can look up pensions online. My ex-brother-in-law, a policemen on Long Island, is in the public record as getting just over #72,000. a year. His name was nowhere near the top of the list as far as the amount of his pension.
March 20, 2009 10:20 PM | Reply | Permalink
But, where does a union's responsibility lie when it comes to serving it's members? If all there is to a union is demanding higher wages and bigger pension plans, then aren't they slitting their own throats in te long run?
____________________
Where is the union's responsibility? You apparently haven't been following the news about union concessions over the last 10 years or so. The unions have no power any more. If they make demands--even legitimate demands--they're threatened with the specter of companies going off-shore.
There is more to a union than "demanding higher wages and bigger pension plans". They're there to make sure laborers are treated fairly and are safe. I would hate think what this country would have become without them. Come to think of it, now that only 13% of the country is unionized, look what we've become! What happened to our middle class? (It was strongest and healthiest when unions were strong and healthy, and that's a fact.)
You might want to read this: http://www.aflcio.org/aboutus/faq/
You might want to
March 21, 2009 1:11 PM | Reply | Permalink
I see her point, but there are much bigger issues. As long as multi-millionaires can collect Social Security at the same level the rest of us can, but during their working years, only relatively small proportion of their salaries is subject to the Payroll Tax, it is unfair.
It is a very regressive tax; people who need all they earn to survive, pay a disproportionately high amount of their earned income into the system. Although the ceiling was raised some time back, I believe the ceiling should be eliminated. That would completely solve the "Social Security Crisis," (except that Congress sees that income as a well to dip into whenever they want to, and that should also be stopped).
I agree with those above who say that pensioneers are too small a group to waste time worrying about; and once they die out there won't be anymore any way.
March 21, 2009 11:00 AM | Reply | Permalink
Ramona I agree with you about the function of unions and most everything else you wrote. @hat was I thinking?
Thanks to all who responded. I'm going to send a link to my sister.
For me, another lesson learned about how to write more clearly and thoughtfully. Sorry for the confusion. I noticed that in trying to write on this issue, on which I am admittedly less than knowledgeable. I sometimes framed things in a way which highlighted my point, but which contradicted something I believe. Oh well, live and learn.
March 21, 2009 3:06 PM | Reply | Permalink
Don't be so hard on yourself, please. These are the kinds of things we need to talk about if we're ever going to understand one another.
Good for you for bringing it up.
Ramona
March 21, 2009 7:21 PM | Reply | Permalink