Monday, May 25, 2009

Older workers 'going Galt' by retiring early?

It seems that many older workers are retiring early rather than staying on the job (thanks br549):

Reporting from Washington-- Instead of seeing older workers staying on the job longer as the economy has worsened, the Social Security system is reporting a major surge in early retirement claims that could have implications for the financial security of millions of baby boomers.

Since the current federal fiscal year began Oct. 1, claims have been running 25% ahead of last year, compared with the 15% increase that had been projected as the post-World War II generation reaches eligibility for early retirement, according to Stephen C. Goss, chief actuary for the Social Security Administration....

The ramifications of the trend are profound for the new retirees, their families, the government and other social institutions that may be called upon to help support them.


Though the article points out that early retirement has its drawbacks (naturally, the concern is for women--who may have to learn to live on less if hubby gets lower benefits) my guess is that anyone close to early retirement figures it's now or never, given the possibility that Social Security benefits will be cut down or dry up in the near future.

Also, instead of paying income tax from their job, these older workers will now be sucking off the government tit (though to be fair, many put in more money than they will ever get back). It's even better than going Galt, it's becoming a moocher instead of a producer. Now that producers are punished and moochers rewarded, I can see the appeal.

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22 Comments:

Blogger DADvocate said...

I'm sure that some of these people had no real choice. My company had lay-offs two months ago. The older ones laid off took early retirement.

12:00 PM, May 25, 2009  
Blogger fred said...

Why the incessant attack upon moocher/producer in your posts? Want fairness? Then cap social security for those with big retirements. I have a friend who gets over 2 hundred thou in retirement money and yet says getting his SS is "his due." why not suggest that retirees not get more than they put in? Why not note that subsided farmers and others are moochers? As job markets tighten perhaps we ought to make mandatory retirement a law, so that college profs, doctors, IT workers et al get out of job market and make room for younger needy people?
Of course not. Libertarians would say the govt ought not tell people this or that. If that is so, then let the market suggest to those older workers who want to retire sooner rather than later, for whatever reason, and not label them this or that bcause of their choices.

1:12 PM, May 25, 2009  
Blogger randian said...

why not suggest that retirees not get more than they put inBecause a guaranteed 0% return on your money is a net loss after inflation. The real problem is retirees whose benefits work out to an implicit 30 or 40% annualized return on their money. Some even received more in their first year than the total SS tax paid in their lifetime.

Why not note that subsided farmers and others are moochers?That isn't the subject of this blog. Check out Captain Capitalism, Cafe Hayek, Carpe Diem, or Coyote Blog is that is the kind of discussion you want.

If that is so, then let the market suggest to those older workers who want to retire sooner rather than later, for whatever reason, and not label them this or that because of their choices.Libertarians wouldn't care about their choices if we weren't paying for them. Social security shouldn't exist at all.

1:54 PM, May 25, 2009  
Blogger Joe said...

Utter nonsense.

This is demographics, pure and simple. Good grief. There was a little thing called THE BABY BOOM.

The baby boom wasn't some tiny blip, it was a huge, gargantuan, massive surge in births starting a year after WWII. 2009-1946 is... drum roll... 63. The minimum age at which you can start collecting social security is, gasp, 63!

Let's say your 63 and tired of the politically correct world of modern business where smart ass MBAs actually think they know shit. Why not bail? (Especially since you know congress is going to increase the minimum retirement age real damn soon.)

3:09 PM, May 25, 2009  
Blogger Joe said...

By the way, the other problem with this absurd theory is that most the people retiring have incomes at levels which have resulted in significantly lower taxes over the past several years.

Another point: collecting social security isn't being a fucking moocher. I goddamn paid into it and expect to get some fucking money out of it. Now, let's forget the fact that had I simply put all that fucking money in a mutual fund, I'd have a hell of a lot more to retire on, so stop the goddamn fucking talk about collecting social security being a moocher and sucking off the government tit. That fucking pisses me off.

3:15 PM, May 25, 2009  
Blogger Gary Cruse said...

What missing from the article is age-related job discrimination. After almost a year on unemployment compensation (and that came to some bucks, I tell you) and another year of fruitless not-even-an-interview job seeking, I realized I was already retired and didn't know it. So I took the earliest opportunity to begin social security.

Don't complain about people not working if they're over fifty. That seems to be the cutoff for hiring. If this be mooching, just call me Minnie.

4:11 PM, May 25, 2009  
Blogger I R A Darth Aggie said...

why not suggest that retirees not get more than they put in?Because after that happens, you'll come along and complain that it leaves people in a lurch, and that it is "unfair"?

4:28 PM, May 25, 2009  
Blogger missred said...

i have some questions for you but i cant find the direct email address. it is related to this question but a bit off..

5:02 PM, May 25, 2009  
Blogger TMink said...

fred, why the incessant attack upon producer/capitalists in your posts?

Trey

6:12 PM, May 25, 2009  
Blogger Jason said...

Joe. Try the fucking decaf.

8:52 PM, May 25, 2009  
Blogger Simon Kenton said...

I plan to take SS as soon as I can, and invest the money for my kids, since it is they who are being enslaved by the government to support me. This seems the only personal way available to us to cleanse the system of its Ponzi Scheme immorality.

10:43 PM, May 25, 2009  
Blogger Indigo Red said...

On the otherhand, older workers being chucked-out the door opens jobs for younger workers who can more readily pay for all the geezers mooching from the federal teat. And given the huge numbers that younger workers who voted for Obama and the Leftist agenda, we can readily assume they truly want to foot the bill.

Truth in testimony requires me to state that I am about be 55 years old and I was layed off 5 days ago after 15 years. I will continue for a short period as a part time employee because I have the privilege to train my replacement - my former boss and younger man.

11:41 PM, May 25, 2009  
Blogger br549 said...

Aside from your love of the f word, Joe, you've missed the point, even while hitting on it.

5:22 AM, May 26, 2009  
Blogger Joe said...

I used the f-word because I'm tired of the branch of conservatism and libertarianism that holds that any use of government benefits makes one a moocher; I've been hearing this meme crop up and its become increasingly annoying. I would prefer the government worked differently, but this is the government we have. I support upping the retirement age, but I have paid a lifetime of taxes into the system and expect to receive those benefits for which I paid. This isn't just Social Security, but unemployment and other programs as well.

It's also important to observe that those of us in the middle class reap the vast majority of benefits from government programs. I decry the waste and overregulation, but welcome having a highway system, and air traffic control system, mostly disease free water and food.

The hypocrisy of the "going Galt" idiots is astonishing--they complain about "moochers", but enjoy many benefits of taxes. Are these people going to decline social security, medicare, use of the public roads? Are they going to reject help of the police and fire departments? How about sewers and pubic water systems? Do they decry collectively using money to build electrical distribution systems? Perhaps they will never use GPS, after all that's mooching off the government.

I don't like the social security system. It was set up poorly and in a way that invites corruption from politicians. If the government writes my IRA a check tomorrow for all that I've paid into Social Security, along with the matching amounts of my employers (me for several years in the 1990s) plus interest, I'll opt out of social security for the rest of my life. That isn't going to happen, so I am going to use the system that exists, including 401k and IRAs to supplement.

11:53 AM, May 26, 2009  
Blogger Dave Cornutt said...

Joe wrote: "I support upping the retirement age, but I have paid a lifetime of taxes into the system and expect to receive those benefits for which I paid." OK, I'm with you on that feeling. We paid for these services, yes. The difference is, regardless about how I feel about the services, I'm not going to get them. I've already resigned myself to that. I've paid into SS my entire working life; my generation has paid the highest FICA taxes ever paid by any generation, and I'm doing my retirement planning based on the assumption that I will never see a dime out of Social Security. Because the nasty truth is, Social Security is not and never was an investment program. It has been a Ponzi scheme from day one; benefits have always been paid out of current FICA tax revenues. I beleive Helen used the term "moocher" in an ironic sense, because most of the people who are collecting feel the same way about as you do, Joe. They see it as the payout on their investment. I understand why they feel that way, because they were always led to believe that it was, but the truth is, there was never any investment, ever.

Anyway, what's done is done. As I said, I do my retirement planning assuming the worst case, which is that SS collapses before I retire. (And I think there's at least a 50-50 chance that it will.) It's not a matter of choosing to be a "moocher" or not; it's a matter of not gambling my future on something that is fairly likely to not be there.

As for some of the other public services you mentioned, to tell the truth, I don't feel like I'm getting my money's worth out of them anymore. It sure looks to me like corruption on many of them is approaching 100%. The Interstate highway system bypassed the city I live in; we finally got a spur to a north-south route, but we still don't have good east-west routes. Some drives which should take two hours actually take four or more. When we inquire with our representatives about construction of new routes, we get numbers from an Ayn Rand nightmare: "fifty years at least", "not in your lifetime", etc.

Fire? Volunteer fire department where I live. Police? The largest category of crimes committed against middle-class victims is property crimes, and many police departments don't bother investigating property crimes anymore. Water? Munincipal system; the only thing the federal government ever does is heap new regulations on it, which raises the cost without improving the quality of service any. Sewer? Septic tanks. Electricity? I'll grant you this one, since we have TVA as a supplier, but the local system is muni, and anyway, TVA isn't really a traditional government agency.

So let me turn your question around. You ask, "If I'm paying for this stuff, why should I not get it?" I ask, "If I'm not going to get it, and it's clear that I'm not, then why should I pay for it?"

12:21 PM, May 26, 2009  
Blogger br549 said...

S.S. certainly was not meant to do what is now does. It will collapse under its own weight. When begun, there were many more paying in than receiving. Look at it now.

S.S. is in the general fund, and is a shoe box full of iou's. It is supposed to be a separate and untouchable fund, just as it is a separate deduction from ones paycheck. A long time myth continues to be perpetrated upon us all. Most of what you have been ranting about Joe, are to have been taken care of through income, sales (after tax tax), property, capital gains taxes. We have been hearing about the eminent collapse of S.S. for as long as I can remember. The congress has never had the guts to decrease spending, cut benefits, or intelligently abolish the program for something better. Everyone who trots in here knows that. Not too many of us know the Constitution (or the Monroe Doctrine for that matter) as well as we should, considering we own this country. You'd think we didn't, and that the three branches of government did, and all we do is what we are told. Who works for who, anyway?

Those way too young to retire, won't see it. Those close enough, may wish to retire now in order to get some of it before it is gone away, increasingly given to someone who perhaps never lifted a finger to earn it.

1:50 PM, May 26, 2009  
Blogger Rob Fedders said...

This comment has been removed by the author.

8:40 PM, May 26, 2009  
Blogger Rob Fedders said...

"Millionaires Go Missing" -- WSJ

http://online.wsj.com/article/SB124329282377252471.html

(Sorry, I don't seem to be able to post this as a direct link)

8:43 PM, May 26, 2009  
Blogger Jason said...

Well, if you're investing the money for the kids, they really aren't quite being enslaved to support YOU are they? :)

But if you're going to do that, it might make better sense to do that investing NOW and take the SS bennies.

Incidentally, if you KNOW you will invest the money (safely) rather than spend it, there's no reason NOT to take the earlier payout. You can revoke your SS application, pay back all paid out bennies, interest free, and reapply at the higher payout rate by filling out Form 521. It's available at their web site, www.ssa.gov. Spousal consent will be required if your spouse is taking benefits. For more info, call 800-772-1213.

Be careful about taxes on SS bennies, though!

7:29 AM, May 27, 2009  
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4:28 PM, May 27, 2009  
Blogger Bill said...

I essentially did this at the end of last year. My company offered early retirement, and I took it. Taxes were not the only reason, but they were a significant part of the calculation. I can start drawing SS this year, and between that and my pension, the additional income from the salary was just not worth the stress.

By the way, affirmative action was also a factor. Anyone who thinks that AA simply means that some other guy gets promoted a little sooner than he would have otherwise has never worked for an AA boss, who is really not qualified for the job, and makes a series of amazingly bad decisions.

9:47 PM, May 30, 2009  
Blogger Eric said...

I disagree with your statement that this is somehow "better" than "Going Galt". John Galt's actions required *nothing* from anyone else, he vanished and lived his life without placing obligation on anyone else. These people are forcing us to pay for them. Sure it's great for them, but the "better" solution would be to not require us to pay for their lives.

The correct answer is not "if you can't beat 'em, join 'em". It's "don't support the system in any way, by giving *or* by taking".

10:04 AM, May 31, 2009  

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