Work 'til You Drop: Is that such a bad idea? (Why is working as long as you live so terrible?)

American Thinker ^ | 04/30/2012

[SeekAndFind]

Social Security is slated to run out of money in 2033, three years earlier than expected. So maybe it's time for politicians to stop pandering when it comes to shoring up the system and instead rethink the retirement entitlement altogether.

Maybe we just need to look back at our history.

In the early 1900s, nearly 80 percent of Americans over the age of 65 had a job. Dora Costa, an economic historian at UCLA, says people stopped working only if they were no longer physically able to. They expected to work as long as they lived.

Is that really such a terrible idea?

Look at our labor force. It's changed dramatically since Social Security was enacted in 1935. Most of us are no longer spending our time working on farms or in heavy labor. Most of us are retiring from office jobs. Should we really be funding retirement at 65 just so we can live a life of leisure for the next 15, 20, or 25 years? Some financial advisers are even suggesting that when planning for retirement, we plan to live to 100, or at least another 30 years.

Aging just isn't what it used to be. Carroll O'Connor was only 47 when All in the Family premiered -- younger than Brad Pitt. And look at Mitt Romney. He's 65; he's fit, and he surfs. While wealthy, he's hardly an outlier. The majority of us aren't sitting in rockers in our 60s. We're physically active -- playing tennis and golf, hiking, traveling. We're living longer, healthier lives than ever before.

[Freedom_Is_Not_Free]

You are welcome. It is human nature for people to think everyone has it like they do, until they are forced to stop and think about it.

So people here who have a soft desk job in an air-conditioned building out of the blinding sun and the freezing rain, have a tendency to forget it is a big world out there with people who do some really heavy lifting that takes its toll on your body as you age.

I certainly would not want to pick fruit and vegetables, and most certainly not at 80. There are a lot of really tedious, back breaking lousy jobs out there. People here may be self-employed or an IT manager or middle management in banking or something, and feel, “why not work until you are old”. Tell that to the 65 year old hotel chamber maid scrubbing toilets and floors on her hands and knees.

People just don’t think.

[Freedom_Is_Not_Free]

You said, “I just turned 65 this month. I started drawing SS when I turned 62 and have already collected over 20% more than whatever I put in.”

I am sure you are aware of the “time value of money”?

What is the current value of the annuity you put in over your lifetime at the average inflation rate over your lifetime?

That is what you “put in” to the system. In other words, what would a 401k savings plan in a money market account be worth if you got the rate of inflation and compounded annually. That is what you really put it.

Say you put in 5% a year for life in SS. Say the average inflation rate of the last 30 years. If you started at $20k 30 years before and finished at $100k at 62, then you would have put in 5% of your average pay or 5% of $60k for 30 years.

That is $90,000.

So you would have put in for example, $90,000.

The current worth of an annuity where you put in $3000 per year at 5% interest, you would have $210,000.

So you are owed $210,000 for the inflated value of the money you put in, not the $90,000 in raw un-inflated dollars.

[Blue Collar Christian]

And the best part, it really can work. Good luck FRiend.