Phased Retirement Essay

In general, countries experiencing high fertility and rapid population growth, have a “young” population structure and the important policy considerations are if there are enough schools and, sufficient jobs and housing to accommodate this population. Countries with “old” population structures face the problems of structuring and developing retirement and health systems to serve this older population and also they have a considerable reduction the number of the working force. The decline of the work force is one of the most dramatic economic tendencies of the past four decades in the United States. The individual’s decision of whether to stay in the workforce or to retire is based on the collaboration of a number of factors including the following: eligibility for Social Security benefits, availability of and benefits under an employer-financed pension plan, work

The most prominent change in the workforce affecting human resources at St. Anthony’s is the rise of a multi generational workforce. Providing different human resource needs for various employees is an evolving challenge. Being aware of different workplace standards between generations is taken into consideration to reduce “pain points” (Calvert, 2015). In the interview, Judie grouped Generation X and Millennials into the same group, and focused primarily on the differences between Baby Boomers and Gen X/Millennials. She described the Baby Boomers as

In “The Social Security Problem”, Max Moore discusses the fearful reality of Social Security running out of funds. He states that the U.S. Department of the Treasury predicts that Social Security funds will run out by 2041 and action must be taken in order to prevent this (134). In his essay, he explains how the depletion of Social Security funds are a result from a decreasing retirement age, decreasing fertility rate, and shrinking work force. These things contribute to an increased population relying on Social Security, an increased population of the elderly, and a decreased ratio of workers paying for those beneficiaries (135). Moore explains the proposal of George W. Bush to make Social Security partially privatized; allowing young workers to invest their retirement savings into their own account. This would result in people putting their retirement on the line in

Notably, the elderly populace is growing rapidly, and will reach 3.4 million or 12.8% of the population. Eventually, in the next thirty years older adults will comprise of 20% of the total population due to the aging of 76 million baby boomers (Olson, 2001). Seeing that, entitlement programs and means-tested benefits, are presented, in order to bolster this increment of older adults. Accordingly, around 96% of the American workforce is secured by Social Security and it is likewise estimated that 58 million American will receive a total of $816 billion in Social Security benefits (Moody and Sasser, 2015). In fact, today 56 million or 17% of the population is enlisted in Medicare (Leonard, 2015). Therefore, this has presented an open deliberation about the eventual fate of Medicare and Social Security and regardless of whether changing Medicare and Social Security to means-tested benefits, instead of entitlement programs can resolve the policy issues.

Currently, the United States is contemplating at a forthcoming Social Security crisis. If changes are not forged, the Social Security system will not be able to keep up with the demanded payouts and is estimated to empty the trust fund around the year 2037. In this paper I will review a brief history of the Social Security program, touch upon the eligibility requirements, discuss what economists believe about the future of the Social Security Program, and finally state the Pros and Cons to the proposed raising of the age requirement for minimum payout.

Although large surpluses during the 1960’s and 1970’s resulted in large inflation of the trust fund, because of more revenue being paid into the fund, than payments being paid out, this has started to change as the baby boom generation moved into retirement. The oldest people in this generation have already reached early retirement age (62), and the transfer of this generation from working age to retirement age will continue for the next 20 years. The decline of the ratio of number of beneficiaries to workers, is one of the root causes of program’s insufficiency.

The Social Security Act was originally one of my New Deal Programs to deal with the instability of retirement in the United States but I saw the opportunity that it could also do more than just that. The good people of the U.S. cannot always control whether they keep or lose their jobs. To combat unemployment rates, the SSA will act as a safety net for people that have been laid-off until they could find another source of income. Money will be taken out of an employee’s paycheck to help pay for Social Security. Two percent of all paychecks will be affected. Older Americans, the handicapped, and dependents were also given the money. In the beginning, about sixty percent of the workforce will be covered by Social Security but I predict that in about sixty years that ninety-five percent of the workforce will be covered. “Initially 60% of the workforce was covered by Social Security (by 1995, 95% of the workforce was covered)” (Franklin D. Roosevelt Presidential Library and Museum - Our

Back in 1950, as the baby boom was just getting started, each retiree's benefit was divided among 16 workers. Taxes could be kept low. Today, that number has dropped to 3.3 workers per retiree, and by 2025, it will reach--and remain at--about two workers per retiree (Social Security Reform Center – Problem). The number of workers for each beneficiary dropped from 5.1 in 1960 to 3.3 in 2006. This is expected to decrease to 2.1 by 2030 (Klay & Steen). Baby boomers are going to retire and Social Security begins to spend more on paying benefits than it receives in taxes in 2017 or 2018 (Social Security Reform Center – Problem). This means Social Security will begin to handle very large funding problems because of the amount of people retiring and the worker/beneficiary ratio falling. This is caused by the increase of the payroll tax 17 times since 1935 (Epstein). Currently Social Security is not having any issues with payments. It lifts 1.3 million children and almost 13 million senior citizens out of poverty (Merino). The other side of the problem though is fairness. For example, you give someone $20 every month to save until the end of the year for you, but until then they can lend out that money and use it how they want until the end of the year. At the end of the year you might have your money or someone else’s money.

Our company has been providing their employees with a pension plan for many years. However, these benefits plans have to be reviewed and possibly revised after the recent acquisition of XYZ Company. Through the use of a funding agency, payments are invested so that periodic payments can be made to the employee during retirement. Defined contribution and defined benefit are the two most common types of pension plans.

There are several challenges retirees have faced in recent years. Of particular interest is how retirement income is measured (Munnell & Rutledge, 2013). This can be justified based in the overlap of federal and/or state pension and social security benefits, which retirees receive but are not well reported or are changed into different forms upon statement of retirement income. For example, Gustman, Steinmeier and Tabatabai (2012) point out what is qualified as an understatement in retirement income data, particularly data from Current Population Survey (CPS). Specifically, while regular payments from social security are well reported in CPS, irregular payments for the 64-69 age group in 2006, accounting for 59% of social security value

“The number of employees over the age of 55 has increased by 30 percent; however, the number of 25- to 54-year-olds has only increased by 1 percent” (Claire, 2009). In 2008 the eldest of the 77 million baby-boomers turned 62. Estimates are that by the end of the decade about 40 percent of the work force will be eligible to retire. As people begin to reach the age of retirement there may be not be enough new employees to fill the gap (Clare, 2009). Companies need to find ways to attract Boomers and Millennials. Companies that want to attract Boomers and Millennials need to be creative in their culture, HR policies and work environments.

Planning for retirement should not be based on Social Security alone, but rather by saving portions of personal earned wages and putting finances into long-term investments. Depending on Social Security as the only income after retiring is an unsafe and undependable way to prepare for retirement. People who contribute to Social Security are mandatorily putting money into the Social Security Reserve; this money is used for older generations that will file for these benefits before the younger people working, in the early 21 century, ever receive a chance. Money controlled by other’s hands will never be a guarantee for a secure future, yet money saved by an individual to put toward personal goals will reward greatly. By taking the time to

(5) Currently SS funds are collected and distributed on a pay - as - you -go (PAYG) system in which Social Security taxes from individuals are immediately distributed by the means of the SS Administration as it sees best fit. This means that taxes collected are not reserved for the individual who has paid them: in Rose 2 the current state he or she must rely on those persons paying SS taxes during the time of their retirement (Becker). For a number of these characteristics and future issues, the Social Security System must be reformed or completely abolished to meet the needs of tomorrow. The leading concerns of Social Security that merits the immediate initiation of reform are the demographic and economic circumstances in the coming century. Even though "forecasting the economy and budget over such a long period is uncertain" there remain many "certainties" regarding problems facing Social Security in the first half of the 21st century (OMB, Budget Perspectives 23). The Federal Government's responsibilities extend well beyond "the five- or six-year window" that has restricted the focus of recent budget analysis and debate. Of these "certainties" are the mounting challenges posed from the baby-boomer generation. This generation, born in the years after World War II, is aging

Mandatory retirement is perhaps a necessary evil; as older employees are forced out of the work force, it creates space for new, younger employees. Mandatory retirement is a form of age discrimination, it forces a person to retire because they are a certain age; it does not take into account if that person wants to retire. It also does not take into account the financial standing of the individual, or if they are physically or mentally still capable of doing the job.

     As and investor, you are overwhelmed with advice in newspapers, magazines, and mailings discussing what to invest in for a successful retirement nest egg, when to start saving for retirement and who to invest with. There are millions of people who realize that an investment portfolio for retirement is necessary, but do they really understand the investment instruments and the amount they must invest for tomorrow? The subject of retirement is a fascinating area but it also could be a fuzzy subject without the correct amount of knowledge, understanding and professional guidance. The number one question of concern for individuals facing retirement issues is whether or not they