Any comments about Mr Madoff?

[Happy Monkey]

Originally Posted by classicman

Tom, are you seriously trying to say that you cannot see there are multiple conversations going on? You conveniently omitted import posts. Some of which were half in jest. None were directed to you. Where is the example that HM laid out? There is also a response from him and another from me.

He's not wrong, though. You do seem to be figuring out a situation where insurance doesn't pay out, and treating it as a "gotcha". You might as well say "what if I pay for car insurance my whole life and never have an accident?"

As I said before, SS's solvency is based on the ratio of workers to retired people. If it got to the point that solvency required the retirement age to be 80, that would mean that there were enough retired people over 80 to counterbalance all the workers under 80. That would indicate an increase in average lifespan, making the scenario of dying at 79 less likely than under present conditions.

And that brings up a strength that Social Security has over other insurance, and even over investment. What if you live for much longer than the average lifespan? Most insurances in that type of situation would raise your rates. Investments will run out if you live longer than your financial planning anticipates. Social Security keeps paying out as long as there are still people who haven't retired yet.

[classicman]

Originally Posted by Happy Monkey

You do seem to be figuring out a situation where insurance doesn't pay out, and treating it as a "gotcha". You might as well say "what if I pay for car insurance my whole life and never have an accident?"

If it got to the point that solvency required the retirement age to be 80, that would mean that there were enough retired people over 80 to counterbalance all the workers under 80. That would indicate an increase in average lifespan, making the scenario of dying at 79 less likely than under present conditions.

The solvency of SS is based upon the parameters as you aptly stated. My point was, and still is, that they can embellish, for lack of a better word, the solvency by raising the minimum age at which one receives full benefits.

If they keep the age at 65 (for example) then the solvency is quite different than if they raise the age to say, 80 as in your example. By raising the age they are eliminating many people who have paid money in. This works because, as any amortization tables shows, the rate of death over 65 increases dramatically, thus allowing all the dollars put into the system by those now deceased individuals and spreading it a fewer who remain alive to/after the increased age. Your assumption that it will be based upon a longer life expectancy is not necessarily true. It may and probably will be raised just to keep it solvent.

By increasing the minimum age they effectively reduce the number of recipients while keeping the number of people putting into it. Is it illegal? No. Is it wrong? I certainly think so.

That is my point. If all remains as it is, there will still be money there for all who retire, I guess so. Will it be $1.00 or $100.00 - who knows. The reality is that in order for it to have some measured benefit for most recipients, the rules of the game are going to be changed.

[Happy Monkey]

Originally Posted by classicman

Your assumption that it will be based upon a longer life expectancy is not necessarily true. It may and probably will be raised just to keep it solvent.

It only has to be raised if life expectancy increases. Solvency is not a problem unless there are too many retired people for the working population to support. And, as TheMercenary pointed out, there are much easier (both politically and practically) ways of increasing funding than raising the retirement age. Of the three methods I mentioned (rates/retirement ages/upper tax limits), the retirement age is the one I would expect to, politically, need a life expectancy justification.

Raising the retirement age to 80 simply could not happen, politically, unless people were regularly living well past it. Raising the maximum yearly limit would, comparatively, be a cinch.

[sugarpop]

Originally Posted by Happy Monkey

It only has to be raised if life expectancy increases. Solvency is not a problem unless there are too many retired people for the working population to support. And, as TheMercenary pointed out, there are much easier (both politically and practically) ways of increasing funding than raising the retirement age. Of the three methods I mentioned (rates/retirement ages/upper tax limits), the retirement age is the one I would expect to, politically, need a life expectancy justification.

Raising the retirement age to 80 simply could not happen, politically, unless people were regularly living well past it. Raising the maximum yearly limit would, comparatively, be a cinch.

I still don't get why it needs to be raised. Just make people pay in based on what they actually make.

[Happy Monkey]

Originally Posted by sugarpop

I still don't get why it needs to be raised. Just make people pay in based on what they actually make.

That's my point. It really doesn't need to be raised, though it does make some sense to keep it in line with life expectancy. Life expectancy for those reaching 65 increased 2-5 years between 1940 and 1990. and the retirement age is going up 2 years.

[sugarpop]

Originally Posted by Happy Monkey

That's my point. It really doesn't need to be raised, though it does make some sense to keep it in line with life expectancy. Life expectancy for those reaching 65 increased 2-5 years between 1940 and 1990. and the retirement age is going up 2 years.

And it's been raised since 1940, no? Wasn't it raised just a few years ago? Or in the past 15 years or so? (My memory is faulty on this...)

[Happy Monkey]

Originally Posted by Happy Monkey

That's my point. It really doesn't need to be raised, though it does make some sense to keep it in line with life expectancy. Life expectancy for those reaching 65 increased 2-5 years between 1940 and 1990. and the retirement age is going up 2 years.

Originally Posted by sugarpop

And it's been raised since 1940, no? Wasn't it raised just a few years ago? Or in the past 15 years or so? (My memory is faulty on this...)

That's what I meant.