Posted on 01/03/2008 12:35:58 PM PST by BGHater
In 2008, the first wave of a generation 78 million strong will hit the Social Security system
Greg Witt was born in January 1946, raised on Elvis, served two years in the U.S. Army and retired after 38 years of working for Allen-Bradley in Milwaukee.
Now, he is on the cusp of turning 62 and reaching another milestone - receiving Social Security.
"It's kind of like another step in your life," he says. "It feels kind of good, all these years of working and contributing and I get something back."
Witt is among the first of 78 million baby boomers poised to enter the Social Security retirement system in the coming decades, the beginning of the so-called Silver Tsunami of aging yet energetic Americans. Boomers born from 1946 to 1964 haven't just grown up, they've grown older and are ready to make an imprint on the American way of retirement.
This year, 2008, the oldest boomers will turn 62.
Boomer retirement will also have a profound impact in Wisconsin. About 1 in 4 Wisconsin residents were born during the baby boom years - that's around 1.54 million people.
There's already plenty of discussion and debate about what may or may not happen when large numbers of boomers reach retirement age, forcing the country to grapple with fiscal, social and medical costs.
But the discussion obscures the hidden-in-plain-sight truth about Social Security - the program created during Franklin D. Roosevelt's "New Deal" is already woven into the financial fabric of America and Wisconsin.
"The beauty of Social Security to me is that all the money (that goes to retirees) goes right back into the economy," says Stephanie Sue Stein, director of the Milwaukee County Department on Aging. "It's money that is being spent, which is why we're never going to have another Depression."
Boomers such as Witt may only know of the Depression from books, but Social Security has been in existence all their lives, cushioning the retirements of their parents and grandparents.
Enter the basement of Witt's home in New Berlin, and you're briefly transported back in time, to boomer childhood. The unfinished walls are plastered with old-time sports pennants, faded emblems of teams, such as the Milwaukee Braves, Cincinnati Royals and Montreal Expos.
He has a record collection, actual albums of Elvis Presley and The Beatles.
"We were all referred to as war babies," says Witt, who grew up on Milwaukee's south side and got his first job at 16 at a grocery store. "That kind of evolved into baby boomers."
And now, the boomers themselves are sliding toward retirement.
Social Security currently covers more than 50 million people, and projections are around 84 million will be covered in 2030. The program provides benefits for retired workers, spouses, survivors and those with disabilities. Social Security benefits are the only source of income for one-third of America's elderly households.
In Wisconsin, Social Security provides a financial lifeline for hundreds of thousands of the state's residents, especially in northern and central counties. More than 1 in 6 state residents received Social Security benefits in 2005, placing Wisconsin 21st nationally, according to the Social Security Administration. More than 60% of the state's recipients 65 and older relied on Social Security for 50% or more of their income that year.
Wisconsinites received $10.6 billion in Social Security benefits in 2005, according to the federal Bureau of Economic Analysis. Those payments equaled almost 6% of the total personal income in the state. In 12 Wisconsin counties - mostly in the northern and central parts of the state - more than 10% of total income came in the form of a Social Security check.
"Social Security is huge here," says Eric Furtkamp, director of Health and Human Services in Adams County, where Social Security payments account for 12% of total personal income. "We've got a lot of retirees here, and we have a lot of people who have Social Security because of disability."
Carol Johnson, director of the aging unit for Adams County, says those in their 80s are especially reliant on Social Security, often as their only source of income.
"That's pretty scary," she says. "At the age of 80 and up, maybe they're receiving $600 or $800 a month. I'd hate to see any of us try to live on that now."
The boomers yearn to live longer, healthier lives than their parents.
And deciding just when to take Social Security is not a parlor game, it is serious business.
Social Security retirement benefits can begin as early as age 62, although taking it then cuts the monthly payout. For older boomer workers born before 1955, the full retirement age is 66, and waiting to collect yields a larger monthly payout.
F. Michael Arnow, a Milwaukee-area accountant and financial planner, says there is no right or wrong answer on when to collect the benefit, and the decision boils down to very personal factors.
"There are some people. . . I think they should take it early," Arnow says. "Their health history is poor, maybe they don't think they're going to make it until age 77." Others, he says, might want to wait.
Paula Hogan, a financial planner from Milwaukee, says the first question she asks clients is whether they can defer taking the benefits.
"The types of things that indicate you can capture that extra (benefit) bonus from postponing would be, you don't need Social Security for your daily living expenses, you're feeling pretty healthy," she says.
For Witt, of New Berlin, the decision wasn't that difficult. Armed with a full pension after retiring from his job in 2003, he says he always knew he would collect Social Security at 62.
Now, he's living the good life. He is an avid reader, bowls in a weekly league, works out daily and travels with his wife. In the spring, Witt and his wife are headed to Memphis to see Graceland. They'll have plenty of music for the ride. Witt has been transferring his collection of albums to compact discs.
And they'll have some extra spending money, too.
Witt says his first month's Social Security benefit will be directly deposited into his bank account in March.
By The Numbers $10.6 billion Amount Wisconsinites received in Social Security benefits in 2005
6% Social Security payments as a percentage of total personal income in the state
12% Social Security payments as a percentage of total personal income in Adams County, in northern Wisconsin
Hope his company doesn't cut back on his pension.
Yes - more welfare, something for nothing socialist programs will do wonders for the American economy. Don't worry, as the USA can not afford the Social Security System anyways, and instead of cutting benefits or radically change it (like personal accounts), they will just inflate it away...
You're not getting anything "back". It's already been spent. The checks you receive come courtesy of me and the rest of the current workforce. Enjoy it while it lasts. I'll never see a dime.
You know, I hear that, if you drill holes in the bottom of a boat, it lets the water out quicker!
That money is coming from MY paycheck, you moron.
Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.
Freep mail me to be added or dropped. See my home page for details and previous articles.
I started working when I was 16 and the first time I realized what FICA was I thought there should be a better way of providing pensions. However, since that time in 1962 a lot has changed. When I started working there were only Defined Benefit plans which were not portable, and if you were not vested when you left there was nothing to take with you.
Now my daughters have 401K and/or other types of programs that I wish had had when I started out.
SS is only a supplement, and all of you youngsters out there should take advantage of maxing your 401K or IRAs so you don't have to rely on SS.
Take my advice or leave it, but don't complain about it. Believe me you have it better now with the options available to you which we baby boomers did not have right away.
And I'm all for the personal account business
Well SAID!!!!
We do have more options granted, but we also have a multi-trillion dollar debt hanging over our heads which will be impossible to pay.
I’m saving and investing around 20% of my income, and have been doing so for almost ten years. My assumption is that SS and Medicare are going to be radically reduced in the coming years - best case. In the worst case they’re going to cause a horrific financial crash.
Gee, wouldn’t printing up $100 bills and dropping them over a trailer court do the same thing, then?
“The beauty of Social Security to me is that all the money (that goes to retirees) goes right back into the economy,” says Stephanie Sue Stein, director of the Milwaukee County Department on Aging. “It’s money that is being spent, which is why we’re never going to have another Depression.”
What a sad ignorant man.
Or a liberal.
Now my daughters have 401K and/or other types of programs that I wish had had when I started out.
Yes and yes.
I resemble that remark!
And yes since my early 20's I was convinced the ponzi scheme would fail before I arrived. It still might. But the point is I never planned on receiving it. Sure I can and will use it, but could survive without it.
Another poster talked about putting away 20% of his income and has for already 10 years. That is great and called personal responsibility. With the right investments he/she will be very comfortable in retirement. Of course these days most of the groaners about SS don't save a dime. And when they do have an extra dime it goes towards entertainment of some sort.
Be interesting to see just how many of the first boomers actually retire and how many re enter the work force after the first year.
My fear comes from the fact that hard changes are coming. In the next ten years or so, SS outlays are going to exceed receipts. The current system is impossible to sustain. As this becomes more and more apparent, I anticipate a lot of ire directed at my generation.
I had a conversation with someone about social security, and when I pointed out that it was simply “social security” - when enacted, designed to keep starving seniors from living under bridges, he was quite incensed. He seemed to think it was a full blown retirement program. I mean c’mon, 1000 bucks a month?
Nowadays it’s de rigeur to get on disability at an early age, or the children. I have a distant relative that seems to be hell bent on getting her entirely normal kids diagnosed with the latest malady de jour, along with drugging them up. It’s pretty twisted.
At least when envisioned, it was considered to be a “third leg” of the recipients’ other two - savings, and employer retirement program, typically a defined benefit pension. The latter are rare as hens’ teeth these days.
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