Thanks for that link. Where you live and other factors also effect LE and morbidity.
Interestingly, people with annuity income also live longer according to some studies.

It is important to distinguish between the post-WWII demographic boom in births vs. the cultural generations born during that era. Generations are a function of the common formative experiences of its members, not the fertility rates of its parents. And most analysts now see generations as getting shorter (usually 10-15 years now), partly because of the acceleration of culture. Many experts now believe it breaks down more or less this way:

DEMOGRAPHIC boom in babies: 1946-1964
Baby Boom GENERATION: 1942-1953
Generation Jones: 1954-1965
Generation X: 1966-1978

http://www.cdc.gov/nchs/products/life_tables.htm

* * *

“Retire at 58 in Germany.”

Unrealistic for the future. Retirement reform is already the subject of government scrutiny in Europe (they have no choice — their retirement systems are not only more generous than those of the USA, but their demographic and economic future looks to be worse than that of the USA). Early retirement is known everywhere to be a special problem and one place to look to avoid the problems that have been long known. That's despite work stoppages and demonstrations when even hint of reform happens.

http://www.nytimes.com/2008/03/23/us/23health.html You could be talking plus or minus 3 years.

Retire at 58 in Germany. With all that experience, maybe start a business instead of wasting what energy reserves one might have on some repressive employer trying to squeeze the last bit out of you for him/her self. No U.S. studies on that I'm sure.

This already is being done. You don't think that the retirement age is fixed at 65 years, currently, do you? It's close, still, but not 65 any longer.

http://www.socialsecurity.gov/retire2/retirecha…

Raising it from 65 to 68 helps reduce costs (think of all the person-years' worth of expenses reduced), but it is to still too low an age. Modern retirement age should be somewhere in the low seventies.

“[T]o sustain the dependency ratios of 1980–2000, the retirement age would have to rise to 72 or 73 by 2030.”

http://www.researchaffiliates.com/ideas/pdf/demographi...

“One way to index the NRA would be for Social Security to provide benefits for the same number of years (i.e., keep the life expectancy at NRA the same). When Social Security was created, life expectancies at 65 were about 12.7 years. If we used this method, the NRA would be around age 72 today.”

“Another way to index the retirement age would be to determine the age that maintains the same ratio of retirement years to working years. … If this idea had been used since the creation of Social Security, the NRA would be age 70 now.”

http://www.actuary.org/pdf/socialsecurity/bunning2.pdf

“Making matters worse, the problem defies an easy solution. Immigration will help but only marginally. Attempting to maintain a constant ratio between working-age and pension-age populations might mean, for example, that 80 percent of Germany’s population in 2050 would consist of immigrants or their progeny. Retirement ages could be raised, but such measures will have no effect on depopulation. Meanwhile, relying solely on longer work lives might mean that, by 2050, the typical European worker would work until his or her late seventies, and the typical Japanese worker until age 83. Child subsidies and other pronatalist policies might help to prevent depopulation, but these measures are costly. If such policies are effective (their record is dubious), they could saddle countries with a double dependency crisis: simultaneous baby booms and senior booms. Many adjustments are needed, but no panaceas exist.”

http://www.twq.com/02spring/hewitt.pdf

Truthfully, if somebody said that the new retirement age was 68 instead of 65, I'd have little problem with it. Just make the changes ten years in the future, not a year before I'm due.

I'd personally love it if they could decide the rules now, so that I'd know how to plan for it. But, if history is any guide, I'm in for about 5 more “this will fix it forever” cycles.

It is only rarely that a child does not become self sufficient and leave the parents.

There's a growing trend to live with your parents, well into the 40s (so far). That way, if your parents lose their home, you lose yours at the same time.

It makes infinite sense, because the retirement programs are unsustainable, and we can't afford public expense for people to retire too early. (There is also no need for a 1930s view toward the young and a “fixed amount of labor” misconception.)

Oh — and G.D., you omitted, again, Obama and the Congre-Dems' record spending, beyond what Bush did. Obama's budget, also, projects deficits forever. Is that responsible? (No.)

“Currently, the trust fund is estimated to run out of money by 2042″

Now, you should know that it's wrong to look at this, as Pelosi has done (wrongly, of course), rather than at what counts, when Social Security (and Medicare) deficits begin. The trust funds have no value — they are just claims on revenues needed to be secured in order to pay benefits in full. If that is what's desired, then once deficits begin, new money must be found somewhere — more taxes, more borrowing, or taking money from elsewhere in the budget. That is when the serious problems begin — long before “trust fund exhaustion” (in 2037). Why do people avoid or try to evade the obvious?

* * *

“What are the things we can do to change it?”

(No, changing federal law to make funding of retirement programs “mandatory” is no magic solution.)

Aside from modernizing the retirement age, and probably indexing it?

The base case for entitlement reform is what the Trustees identify as sufficient to make it solvent.

(To this day, few people read the Trustees' Reports, as some of us have for the past several years.)

“[E]xpected [Medicare SMI Part B, and Part D] steep cost increases will result in rapidly growing general revenue financing needs-projected to rise from 1.3 percent of GDP in 2008 to about 4.7 percent in 2083-as well as substantial increases over time in beneficiary premium charges. “

“[Medicare] HI Trust Fund could be brought into actuarial balance over the next 75 years by changes equivalent to an immediate 134 percent increase in the payroll tax (from a rate of 2.9 percent to 6.78 percent), or an immediate 53 percent reduction in program outlays, or some combination of the two. Larger changes would be required to make the program solvent beyond the 75-year horizon.”

“Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two. Ensuring that the system remains solvent on a sustainable basis beyond the next 75 years would require larger changes …”

http://www.socialsecurity.gov/OACT/TRSUM/index….

Life is hard enough without inheriting the mistakes of the generation that came before. – VTG

True enough, and yet all of us inherit the mistakes of previous generations. Of course we inherit some of their accomplishments as well. I'm the same age as HemmD, but I bash the boomers as much as anyone. My feeling is that they wasted much of their enormous potential by ignoring so many of the lessons they learned early in life and by opting for lives of self-gratification instead. Of course there are many examples of boomers who took a nobler route, just not enough of them. Only my personal opinion in any case.

Anyway, I agree with GreenDreams, this is an interesting thread and I find myself in agreement with certain aspects of nearly every post, even though we are all approaching the subject from a different perspective. And oh by way, don't mess with my SS.

Currently, the trust fund is estimated to run out of money by 2042. Let's face it. None of has a clue what the global financial picture will be even 10 years from now, let alone 32. The $3.5 trillion it would take currently, to keep SS healthy for 75 years is less than the money Bush gave away to his rich buddies in tax cuts and a needless war of choice.

For over 30 years, the GOP (yes and some Dems) has pursued a “borrow and spend” philosophy that has saddled future generations with a staggering national debt. The total of all presidents before Reagan added up to $1 trillion. Reagan tripled it. Bush I doubled that. Clinton brought it down slightly, Bush II binged out on “tax cut” fiscal policy and unfunded wars and corporate giveaways like Medicare part D.

Now we're acting like caring for our elders is beyond our means, but tax breaks for fat cats and playing policeman to the world, and massive corporate largess; oh those are all just fine. Get a grip. Us “geezers” are an unstoppable voting block, and every day, every worker gets older and wants a safety net in place for themselves. Better look elsewhere for money to pay for this endless coddling of the super rich and pointless militarism.

Means testing is one reasonable change that would be of benefit. Likewise, payment into SS should be open ended. If a Banker wants to collect a hundred million dollar bonus, maybe it's about time he paid his 7.5% on the whole 100 million and not just the first 50 thousand. There may not be many millionaires, but plenty of people make over the current cut off. 7.5% additional for all income over 50k would go a long way to help while not hurting those who already give up a bigger portion of their gross salary to SS.

Truthfully, if somebody said that the new retirement age was 68 instead of 65, I'd have little problem with it. Just make the changes ten years in the future, not a year before I'm due.

The young need to be cognizant of our difficulties, juat as we need to be cognizant of theirs. It is not all sweetness and light to be young right now. I know too many young people who are struggling to feel anything more than grateful that I'm not one of them!

Wall Street bankers can go to hell, as far as I'm concerned. And Joe Biden has a very generous government pension plan, he won't collect SS, anyway. We should all be so lucky.

First, it was not generosity, it was responsibility. Social responsibility. It's the best example of “paying it forward” that I know. It's the same kind of social responsibility that makes one pay for schools one doesn't attend or for roads one does not travel.

That being said, the pickle is indeed large and unpleasant.

My solution requires that the young remember that reponsibility while requiring the old to remember true fairness. Joe Biden doesn't need SS, nor do Wall Street Bankers. There are millions, however, who have “paid it forward” for too many years to be told that is just too tough now that one has reached retirement.

But children grow up. It is only rarely that a child does not become self sufficient and leave the parents. There is the joy of seeing them learn, grow and develop into a fully functioning adult. Most children do leave the nest.

Life is hard enough without inheriting the mistakes of the generation that came before. Young people today are going into debt tremendously to obtain educations, they are confronting an abysmal job market. They face a series of challenges that you and I did not, at that age.

They owe us nothing beyond respect and human decency. They should not be responsible for paying for wars, and deficits and drugs consumed, before they were even born. And it is terrible to think that some people think they should be.

That was very nice of you to pay for those retirees. Very kind of you. But upon retirement, it is my generation and the generation after, that will be footing the bill for *your* retirement. Generous of us, no?

You will be, essentially, living off the largesse of the portion of society that is still working. That's the dole, as far as I'm concerned. It is the social contract that we have agreed upon, but it is becoming untenable. This must be addressed.

I say this not to offend, though I am sure I must have, but to point out the reality of the situation. We are in a pickle. We cannot afford the system as it now stands.

What are the things we can do to change it?

You sound like the late sixties or early seventies. Don't trust any one over 30, that's the ticket.

Any time the youngsters want to pay us old goats back for the food, clothing, education, and nice house they grew up in, I'm willing to collect.

Old age may be a train wreck, but youth is wasted on the young.

It's good to know that our two party system has taken the time to plan our economic demise. It really does take a bi-partisan effort to get things done in Congress.

I've even identified when that is: 2016 elections.

(Onset of Social Security deficits — redeeming trust fund bonds — is projected to happen around 2016, an election year.  At that point, more money must be found to pay the benefits in full, and by definition the problem can no longer be evaded.  Yes, evaded, not avoided — they should be solving the problem now, and they are dishonest to deny there is no problem or an easy solution is at hand later.  The long-term incumbents will retire either in 2016 or more likely, in 2020, in large numbers.  Their replacements will be handed the task of solving a worse problem, during the start of a very long bear market as Boomers are selling the private assets they have to finance their retirements, at the same time.)