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February 03, 2005
jobs
I got my stuff done early today. Unfortunately, as is often the case with me actually not procrastinating, somebody else had a meeting and so now I don't really have anything that needs to be done until tomorrow.
And people ask me why I'm lazy.
I have my REI interview today, and I'm excited about it. I think it would be a great thing for me, to be working in an outdoor-centric environment like that. It's definitely a far cry from being a programmer. So I'll do my best to land a job.
I could also use the money, since it looks like Kara and I are going to try to take a 3-4 day cruise over Memorial Day weekend. It just seems to be the most cost-effective way to go. There are two we're really looking at, one of which is Carnival and the other, Royal Carribean. Both have pluses and minuses: the Carnival cruise is longer and leaves from New Orleans, and we'd have some time to bop around that city before we flew home at the end. The Royal Carribean one is on a nicer ship and is cheaper, however. Either way, should be a good vacation.
So, Social Security. It's the new Iraq. Here's the gist (as I understand it):
Time was, you were lucky to live past 70. If you spent your whole life working, wouldn't it be nice if you could quit at age 65 or so and relax a bit? So Social Security was set up, the idea being, everybody else pays into a system that guarantees to give you some scratch for a nice retirement when you get old enough...assuming you live long enough. It was a little lottery-esque, but, it definitely fits into that whole "respect your elders" mindset.
Three problems with this system. First, what happens if people start living longer? Rather than a small percentage of folks even making it to retirement and beyond, you have lots of people living into their 80s and 90s, causing the system to have to pay out longer and longer.
Second, what happens when there are also more actual people at retirement age? Such as what's beginning to happen with the Baby Boomers.
Third, and this is a little speculative, is that one supposes that people's expectations for retirement are more significant...a dollar doesn't go as far as it used to.
So, now you've got more people drawing money out of the system than putting into it...or at least, that's what is being said. I can't prove it one way or the other. But it seems plausible. Lots more people of retirement age, each living much longer than was anticipated when Social Security was dreamed up, and it's bankrupting the system. Slowly...but it's happening.
You have a number of solutions for this problem. One, increase the retirement age. The AARP will probably send me hate mail for simply daring to suggest it, although it's honestly the most reasonable proposal. If you're healthy enough to play golf, you're healthy enough to keep working. If you manage to make it to 80, then you're welcome to retire.
Another solution is to increase the amount of money people put into the system by increasing taxes. I don't see this happening either, for the obvious reason that nobody supports tax increases...and anyway, if W decided to give a tax cut right before waging a bunch of wars, I can't see him raising taxes for retirees.
The last solution is the one that he seems to want to go with, and that is, cutting benefits. Oh, he'll say that his reform plan isn't about cutting benefits until he's blue in the face, but that's really what it's about.
You pay in $1000. The government pays you back a percentage of that in benefits, eventually...I don't know the specific math, let's just say that you get paid %25 of that. $250 in benefits.
The new idea is, you're allowed to actually decide how to invest some of that money, with the hope that you'll be able to make money. Oh, you still pay in $1000. Say (this is all very hypothetical, numerically), half of it stays in your Social Security account, and half of it, you can decide what stocks to buy with it.
The difference is, the government is only on the hook to pay you %25 of the half that stays in your Social Security account. Your guaranteed benefits are now $125.
Theoretically, you make smart investments and manage to make up that other $125 on your own. Or you lose it because you're not a savvy investor, or Ken Lay needs a new yacht, or the stock market crashes. Tough luck. The government gave you its part of the deal.
That's my understanding of the way it works. Is it a terrible idea? Well, no...it's just a far less certain system. It has the potential to pay out more in benefits to some, and far less to others. It also makes sure that the system can keep paying out something to everybody, even if it's not as much as it used to.
I guess my generation never had the belief that Social Security was going to pay for our retirements anyway, so I'm not as concerned...I have my 401k, and if that doesn't get me through old age, I guess I'll have to go back to work. Which seems like a good enough solution to the problem on its own.
Posted by Mark at February 3, 2005 03:09 PM
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