Tag Archives: Social Security

AARP Says More Work And Less Retirement Is Good News

Remember when AARP was an organization for retired persons? Remember when the American Dream included a decent job, a house and yard, and retirement?

The acronym AARP was shorthand for “American Association of Retired Persons.” But the organization decided to change its brand. The spelled-out moniker was dropped in favor of just plain AARP.

The capital letters AARP became the full, official name. The letters don’t stand for anything. I’m beginning to wonder what AARP, the organization, stands for.

Did the organization that advocated for retired persons change its identity — and its mission — along with its brand? Has AARP decided that retirement is no longer cool? It almost seems as if they’ve  decided to support WORK and give up on RETIREMENT.

The cover story for the September issue of AARP Bulletin proclaims:

“Good News for Older Workers: Keep, Change or Improve Your Job After 50.”

The “RP” in AARP now stands for “Real Possibilities.” I’m not making this up.

“Tens of millions of older Americans are working today at ages when their parents and grandparents had retired.

Nearly a quarter-century ago, in 1991, only about 1 worker in 10 planned to stay in the workforce beyond age 65. Today, that number has risen to almost 4 in 10.

In 1991, according to the Bureau of Labor Statistics, some 30 percent of Americans age 55 or older were working. By 2013, the workforce participation rate for those 55-plus had passed 40 percent, and it’s rising steadily. The federal Equal Employment Opportunity Commission says the current era marks the first time in U.S. history when four generations — pre-boomers, boomers, Generation X and millennials — are engaged in the workforce at the same time.”

The above quote is from the article, “The Value of Older Workers: Experience makes them better problem solvers and more reliable,” by R.R. Reid in the September 2015 issue of AARP Bulletin. The September issue is not yet up on the website, but AARP Bulletin Today includes many related articles.

The hard copy of the September issue cites excellent sources for the claim that millions of older Americans who would have been enjoying their hard-earned retirement in the late 20th Century remain hard at work in the brave, new 21st Century. So it must be true. People of my baby boomer cohort are less likely to be retired — and more likely to still be working — than were our parents and grandparents, who were probably retired at our age.

300px-SocialSecurityposter2I’m constantly reading or hearing about the difficulties of retirement. Many people say they can’t afford to retire; some say they expect to work until they die. They believe they have little choice. For many, the cost of living outstrips retirement income based on Social Security, pensions, and savings. See the results of AARP’s latest survey of workers aged 55-64.

Retirement income is usually fixed income. The amount of our monthly income from Social Security, pensions, and savings is not likely to go up. Monthly income is more likely to go down, as a retiree burns through savings. Even the annual Social Security cost-of-living adjustment (COLA) is not guaranteed. See the earlier blog post.

Many people fear that their Social Security benefit will, in the not-too-distant future, be reduced to 75 percent of the present benefit. That fear is based on a drumbeat of negative news. (I personally believe that we can and will find a way to preserve full Social Security benefits, and also ensure that Social Security remains viable for our children and grandchildren. Call me an optimist.)

AARP views the trend to less retirement and more work through rose-colored glasses. But I’m wondering if the American Dream of retirement for nearly everyone has ended. Workers in the 1930s to 1970s era were likely to have pensions and to own houses with paid-up mortgages. But since about the mid-1970s, the trend has been away from guaranteed pensions. In the later decades of the last century, many workers began to rely on home equity loans. People refinanced their homes repeatedly, and never paid off the mortgage.

Only in recent years have many baby boomers started to wake up and smell the burned coffee. The new reality is retirement without adequate pensions and savings. And meanwhile, you’re still paying the monthly mortgage. Is the American Dream of retirement about to become a nightmare?

I can hardly wait to see how Robert De Niro plays a 70-year-old intern working for a much younger boss (Anne Hathaway). Watch the trailer. Is it a comedy or a horror movie?

Social Security And Medicare Are America At Her Best

Editor’s Note: Below is a column I wrote in February 2013, the year I turned 65. I began collecting Social Security earlier, at age 62. In June 2013, my Medicare coverage started, and I retired in October 2013. This article was originally posted on one of my other blogs. Because readers of Retirement Made Simple have shown a deep interest in Social Security and Medicare, I’ve removed it from the other blog and am reposting it here today, with minor updating, including additional links to other sources. As you can tell, Social Security and Medicare are American icons that I feel very strongly about.

An official-looking envelope arrived in the mail this week. (Yes, despite reports to the contrary, we still have mail delivery in the USA.)

Inside the envelope, my Medicare card! Thank God! But how did this happen? How did I ever get to be this old? Never mind.

medical_care_card_usa_sample

Amazing thing is, I didn’t even apply for Medicare. They just send me the card automatically, three months before I turn 65. Part A and Part B, both automatic. It’s effective in June, when I turn 65.

Many people are convinced that all government is inefficient. Anarchists claim government can’t possibly do anything right! Where do they get that idea?

Social Security and Medicare run like well-oiled machines.

The Social Security Administration +++   runs Social Security with amazingly low administrative expenses! And the honest truth is, it’s all been paid for, by me! And by you! Through specifically designated taxes! Is this a great country, or what!

As for Medicare,  +++   I’ve been paying a tax every week since 1966 (which happens to be the year I graduated from high school). For Social Security, I’ve been paying a couple of years longer, ever since I got my first part-time job at age 16. Every week, for 48 years! My money, invested prudently in the safest possible way — U.S. government bonds. Accrued interest!

+++   The two links in the two paragraphs above are the most authoritative sources regarding Social Security and Medicare, respectively.

Saving every week for 48 years. Investing the money prudently. Isn’t that what the investment gurus advise?

How could that possibly be wrong? It feels right to me. All younger workers (by which I mean everyone under 62) need to read the following article by Motley Fool, as printed in USA Today in September 2015:

“The average American is just plain wrong about Social Security’s importance.”

Why is it that so many poorly informed workers are ready to give up on Social Security???  And why is it that Social Security and Medicare are the two programs the wealthy hate the most? I don’t get it.

— John Hayden

Other related articles
Personal Finance Guide for Seniors (medicaresupplementalinsurance.com)
Watch out for Medicare card calls and other scams (utsandiego.com)

And finally, from Atlantic Magazine in 2012:

Don’t Cut Social Security, Double It

Second Week For A New Blog

Today is Day 12 for “Retirement Made Simple.” Today set a new personal best for the blog, logging 18 visitors and 35 views. Previously, I’d gone over 10 views twice, but not yet hit 20. Today we soared past 20 views AND 30 views to 35, with an hour left.

Also today, the blog got its first referral from a search engine! Throw a party! Seven search engine hits, in fact. Five from Bing and two from Yahoo. What’s up with Google? Google still missing after 12 days?

I believe it’s much harder for a new blog to attract attention through a search engine than it was a few years back. I hope the search engines are aware of my posts by now, but most hits for a new blog will be buried under thousands of other hits. Who’s going to see it? I’ve been getting one or two visits, now and then via the WordPress Reader.

Since no readers have come from search engines before today, how were a few people discovering the blog? Most of them were other bloggers whose posts I’d commented on, and some were readers clicking over from a comment. Interacting with other bloggers is time-intensive, but it’s also fun, informative, and so important.

I’m also using the WordPress publicize feature to send notice of new posts to my Facebook page and Twitter feed. I have about 125 friends on Facebook, and every post draws two or three visits via Facebook. Haven’t received a visit via Twitter yet on this blog. On my other blogs, I’ve regularly received a few hits from Facebook, but rarely any from Twitter.

Discipline and focus in posting

My blog is about Retirement, Simplicity, and Aging Gracefully on a fixed income. My target audience is retired folks and workers who are nearing retirement or thinking about it. But surprisingly, many of my readers so far have been younger adults. No age discrimination here.

You’re probably wondering, what was the post that sparked the surge from 5 visitors and 12 views on Thursday and 4 visitors and 7 views on Friday, to 18 visitors and 35 views on Saturday? It’s a breaking news story: “Social Security Cost-Of-Living Increase For 2016 In Danger.” The source is rock solid, AARP. The story also mentioned an expected increase in the Medicare premium for 2016, as well as the bad news about the Social Security COLA.

The story is spot on for my target audience. Retired folks care dearly about Social Security and Medicare. Most of us depend on Social Security for the bulk of our retirement income, and on Medicare to cover the high cost of health care. This is the way it’s supposed to work folks. You focus as tightly as possible on one or a few related subjects that interest your target audience. If you provide the right information, they will come.

Hey, just had one more visit and one view at 11:25 p.m. New total 19 visitors and 36 views.

One thing more. I notice that nearly every day, the number of views is about double the number of visitors. This is gratifying. It means that visitors aren’t just making a quick hit and then surfing on to the next big thing. They’re lingering for at least a minute or two and exploring other posts on the blog.

Here’s the take-away:  Inside blogging information is as dull as grass growing on a cloudy day to most of my target audience. The spot-on Social Security story was the right kind of post. This blog statistics stuff is the wrong kind of post. (But since many of my readers early on are other bloggers, I can probably get away with it.) You and I want to build readership for our blogs, and also credibility according to the algorithms of the soulless search engines.

You won’t see many more posts that stray from the core topics that interest my target audience.

Social Security Cost-Of-Living Increase For 2016 In Danger

This just in from AARP:  The annual cost-of-living (COLA) increase for Social Security recipients is probably not going to happen in 2016. Retirees depend on the COLA to keep the value of their Social Security benefit from depreciating over time.

Meanwhile, Medicare Part B premiums are almost certain to go up in 2016. Silver lining: if there’s no Social Security COLA, retirees whose Medicare premiums are deducted from their monthly Social Security benefits will not have to pay the higher Medicare premium

Here’s the full text of the AARP statement that landed in my email Friday:

 “Nearly 60 million Social Security recipients will probably not get a cost-of-living increase next year, according to projections in the 2015 Social Security and Medicare trustees reports.

This would be the third time Social Security beneficiaries have gone without a cost-of-living adjustment (COLA) since 1975, when automatic raises were put into place. The COLA this year was 1.7 percent, making the average monthly check for retired workers $1,334 as of May.

Increases in benefits are tied to the third-quarter average inflation rate compared to the same period the previous year. Inflation has been virtually flat in 2015, due to the crash in oil prices, says Michael Kitces, director of research with Pinnacle Advisory Group in Columbia, Md.

While that makes a COLA appear unlikely, it “is a projection and could change,” says Nicole Tiggemann, a spokeswoman with the Social Security Administration. But it would take a dramatic upturn in prices in the next few months to trigger a COLA for 2016.

AARP and other advocacy groups have long argued that the Consumer Price Index (CPI) used to determine the inflation rate and calculate annual Social Security COLAs doesn’t accurately measure the spending patterns of older Americans.

“Older Americans tend to spend their income differently from the working population that is measured by the current CPI,” says Alison Shelton, senior strategic policy adviser with the AARP Public Policy Institute. For instance, they spend more on health care, a cost that tends to rise faster than the inflation rate, she says.

The net effect of this difference has been about 0.2 percentage points a year, she says. In other words, if the standard inflation rate is 1.5 percent, for older consumers it feels like a 1.7 percent increase. “It tends to add up,” Shelton says.

The lack of a COLA would also have an impact on Medicare beneficiaries. Most of those who have Part B premiums deducted from their Social Security checks would not see an increase in those payments because rules hold them steady when there is no COLA. That’s about 70 percent of Medicare beneficiaries who now pay $104.90 a month in Part B premiums.

The rest of the Medicare beneficiaries — including those with higher incomes, those who didn’t participate in Social Security at their workplace and new beneficiaries — would bear the brunt of any premium increases. The latest Medicare trustees report projects that the base premium for these groups next year would rise to $159.30 a month under this scenario.”

More than the COLA is in danger, in the medium run and the long run.

I used to be confident that Social Security would continue to provide an income floor for older workers, at least for the foreseeable future. However, a number of developments in recent years have shaken my faith.

The inability of the American political system to effectively manage public revenues and expenses, the faltering economy, the embrace of austerity in advanced Western nations, and finally, the steadily increasing concentration of wealth among the few and impoverishment of the many, all these changes give me reason to worry about Social Security.

Most of all, the steady drumbeat of propaganda against Social Security seems to be creating a self-fulfilling prophesy of failure.

I personally don’t think the demise of Social Security is inevitable. But the prospects for deep cuts in the Social Security program seem to be growing. Same thing is true for Medicare and Medicaid, I believe. A likely outcome in my opinion: one of the three — Social Security, Medicare, or Medicaid — might be sacrificed in an attempt to save the other two.

Ah, Retirement

Welcome to my new blog.

Nearly everyone I know is retiring. Most folks in my circle of friends and relatives begin collecting Social Security at 62. I know I did. I took Social Security at 62 because I needed it (my earnings plummeted in the recession). Social Security was a welcome supplement to my wages, but not enough to allow me to quit the job.

The building blocks

At 62, health insurance was a major obstacle. Between the job and Social Security, I was able to purchase health insurance through a state program. I worked mostly to pay for health insurance until I turned 65. Because I was already collecting Social Security, Medicare kicked in automatically at 65. Is this a great country, or what?

Also, I had a couple of small pensions I was able to start collecting at 65. Medicare was the missing piece that made it possible to retire with the peace of mind that I’d have access to health care when needed. There you have the building blocks of retirement: Social Security, Medicare, Pensions. You might notice that one obvious building block is missing. Savings! I plan to talk about retirement savings as little as possible, for reasons that will become clear.

Peace of mind

Retirement plus peace of mind — that’s what it’s all about for me. However, it’s not as easy as it sounds. It certainly hasn’t been as easy as I had imagined. I’ve hit a few bumps along the way. Long story short, I realized I need to simplify my life while maintaining a tolerable lifestyle. I prefer simplicity, and I know that my limited retirement income will require simple living.

Aging Gracefully

I feel pretty healthy right now (age 67), but I’m fully aware that as the months and years roll by, faster and faster, I’ll be growing older. I’d like to age gracefully, be kind to to all, contribute something to my community, and find joy in retirement. And I’d like to write about it along the way. That, in a nutshell, is the reason for this blog. And that concludes the introduction.

The next post, within a day or three, will enumerate the subjects you’ll read about here. I hope to focus tightly on retirement and graceful aging, and avoid going off topic. See you soon.