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URL:  http://boards.fool.com/hockeypop-canonian-quoti-agree-but-as-a-25986153.aspx

Subject:  Re: Clinton Retirement Plan Date:  10/11/2007  7:12 PM
Author:  JAFO31 Number:  59611 of 74856

hockeypop:

canonian: {{{"I agree but as a TMFPMarti posted the original thought behind SS seems to have been changed over time. I'm actually confused, was SS originally created just to keep people from hitting poverty"}}}

JAFO: <<<Yes; and, as another poster noted, to encourage retirement so that the young could obtain jobs.>>>

c: {{{"or was it created to allow people to put money in to take out later when they do retire?"}}}

J: <<<NO. It was designed to be pay as you go and there were never personal accounts with any money that could be taken out later.>>>

"I have NO solution for this discussion, but will note that the present SS bears little resemblance to what was originally passed."

No one wants to bite the bullet and eat 100% of the transition costs and no one has hyped any plan that equitably distributes the burden of the transition costs.

"Age 65 retirement in the 1940's was near death for most males."

Not really. You need to review life expectancy at age 65 and not average life expectancy from birth.

See e.g. http://www.cdc.gov/nchs/data/hus/tables/2003/03hus027.pdf

In 1950, life expectancy at age 65 was 12.8 years for a male and 15.0 years for a female. In 2000, it was 16.4 years for a male and 19.4 years for a female.

While definitley increasing, it is not nearly as large as you suggest by using average life expectancy at birth, which in 1950 was 65.6 for a male and 71.1 for a female versus 2000, when it was 74.3 for a male and 79.7 for a female.

The male increase at age 65 is 3.6 years and the female increase is 4.4 years, which are much smaller than the from birth increases of 8.7 for males and 8.6 for females, respectively.

"ALSO, the retirement year 65 stuck, even as the longevity of Americans began to increase each year, and (horrors) women entered the workforce making 65 an even more relatively young age. Women did add more workers to the SS pool, which made things look good for a number of years (and I agree with the voodoo accounting) while ignoring the ultimate problem with their retirement and a longevity even greater than men."

Actually the lower earning sposue gets scrued by the SS system, which was historically the woman, so women entering the work force was not detrimental to the balance of collections versus payments due.

"Finally two other demographics are taking their toll. First, more students are going to college, thus delaying their entry into the social security pool. Rather than providing space for them to work, they are now opting out of the workforce and eventually entering it with more debt to boot. This reduces the number of working years by about 8-10% and makes it difficult to add retirement funds at a key early investment time because they are paying down loans. In addition, with a booming stock market, more Americans at relatively high paying jobs are retiring early, again reducing the SS pay-in pool."

Agreed.

Regards, JAFO
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