Saturday, June 16, 2012

Washington Post columnist stirs reaction with opinion on sparing seniors over 55 from any sacrifices

Matt Miller has an important column in the Washington Post Saturday morning, “Young Americans get the shaft”, with master link (and thousands of comments already) here.  

Miller implies that there is no reason to coddle all seniors over 55 or already receiving benefits, because he says most are receiving more than what they put in. Even Rand Paul would protect current beneficiaries, he says.

Again, on social security, people should be guaranteed a fair actuarially supported return on the FICA taxes already paid (including those by employers, which otherwise could have been paid as wages).  But it seems hard to say just what that return is as lifespans increase.  In Medicare, however, seniors may have contributed much less for what they receive.  That was the case with my own mother (passed away at the end of 2010 at 97), and that brings up more arguments about filial responsibility -- but that can shaft young people further. 

Miller makes the point that money spent on seniors isn't available for shoring up infrastructure, which would help not only with more jobs, but would also provide more security (as to the power grid).  He also criticizes bloated military budgets. 

Sunday, June 10, 2012

Many more people start social security benefits at 62 -- with long term unemployment, they have to

Motoko Rich has an important front page story in the New York Times, Sunday June 10, “Forced to early Social Security, unemployed pay a steep price”, link here

The narrative relates the experience of a woman who lost her job in advertising in southern California (after her employer lost two big accounts in one week), couldn’t find another one,  moved in with friends in North Carolina doing charity work, and then moved back to California (Palm Springs) after Hurricane Irene damage. 

She barely gets by on the $1100 a month Social Security she started at 62.  Her early start on benefits means they will he less by about 30% for the rest of her life.

I did the same thing, starting at 62.  But my employer’s pension plan was predicated on that expectation, with the way the “social security offset”  (or “bridge) had been set up by my original employer.  If I live to age 77 or greater, I lose out.  (I am 68 now.)

But before 2000, it was a common expectation that people would “retire” before age 60 and start some kind of consumerist or boutique second career, probably make less when doing what they “wanted”, and use social security as a financial planning tool.  Now, the ethics and sustainability of that view has been questioned by calls for means testing, or delayed benefits based on accumulated wealth.

Social Security reports that early retirement claims have increased sharply since 2009.  Mine started in 2005.

Wednesday, June 06, 2012

California cities vote to cut pensions for public employees, not clear if this affects current retirees

NBC Nightly News today (June 6) reported on the actions of voters in California to roll back pensions for public workers in San Jose, San Diego, and other cities.  It was not clear from the report if this action could cut pensions of existing retirees already receiving benefits, or "merely" require public workers to pay more for their own future benefits (moving them toward the "defined contribution" area). However, comments by at least one San Jose firefighter seem to suggest that it could affect current retirees.

NBC also reported on the bankruptcy of Central Falls, RI and the implementation of cuts in nearby Providence.

Actually, an editorial in the June 7 Wall Street Journal (paywall link), p. A18, reports that in San Diego the measure affected "only" new hires, shifting them to defined contribution plans, whereas in San Jose, existing workers get cuts in future pension credits or must pay up to 16% of their income.  Does that mean existing retirees are still unaffected?

The narrow avoidance of recall in Wisconsin by Republican Governor Scott Walker may embolden other states to try to cut benefits.

Friday, June 01, 2012

A couple more points about filial responsibility, FLMA, Medicaid

A recent booklet by Sarkisian and Gerstel (soon to be covered on my books blog) makes a couple of points regarding filial responsibility that I forgot to mention in my posts last month.

One if that the Family Medical Leave Act (FMLA) of 1993 does indeed mandate allowing employees to take up to twelve weeks of leave, although unpaid, from work to care for one’s own parents as well as one’s children.

Another regards Medicaid.  Of course, the “look back” regulations for accepting Medicaid (the number of years ago assets could have been given to potential heirs) are the more familiar way filial responsibility has come up in the past (until the reports about the cases in Pennsylvania covered last month).  The authors mention that Medicaid regulations do not allow immediate or even extended family members to be paid for hands-on caregiving help.