The Affluent Elderly

Real Clear Politics ^ | May 16, 2011 | Robert Samuelson

[re_tail20]

When House Speaker John Boehner calls for trillions of dollars of spending cuts, the message is clear. Any deal to raise the federal debt ceiling must include significant savings in Social Security and Medicare benefits. Subsidizing the elderly is the biggest piece of federal spending (more than two-fifths of the total), but trimming benefits for well-off seniors isn't just budget arithmetic. It's also the right thing to do.

I have been urging higher eligibility ages and more means-testing for Social Security and Medicare for so long that I forget that many Americans still accept the outdated and propagandistic notion that old age automatically impoverishes people. Asks one reader: Who are these "well-off" elderly you keep writing about? The suggestion is that they are figments of my imagination, invented to justify harsh cutbacks in Social Security and Medicare on the needy.

Just the opposite. We see every day that many people in their 60s and older live comfortably -- and still would if they received a little less in Social Security and paid a little more for Medicare. The trouble is that what's intuitively obvious becomes lost in the political debate; it's overwhelmed by selective and self-serving statistics that cast almost everyone over 65 as being on the edge of insolvency. The result: Government over-subsidizes the affluent elderly. It transfers resources from the struggling young to the secure old.

To correct the stereotype, consult a government publication called "Older Americans 2010, Key Indicators of Well-Being." It reminds us that Americans live longer and have gotten healthier. In 1930, life expectancy was 59.2 years at birth and 12.2 years at 65; in 2006, those figures were 77.7 and 18.5. Since 1981, death rates for heart disease and stroke have fallen by half for those 65 and over. In this population,...

[miss marmelstein]

My mother is 87 and has been collecting Social Security longer than I’ve been married. She also has a very large bank account; but you reduce her SS one penny and she’ll turn into a rabid dog!

[hinckley buzzard]

I guess if we have to have these programs they may as well be means-tested. The most affluent demographic in America is single women over 65.

[Pollster1]

I have been urging higher eligibility ages and more means-testing for Social Security and Medicare for so long that I forget . . .

Higher ages? Definitely. We should phase that in and boost the age gradually but not over too long a period to a sustainable age.

Means testing? No! That will turn Social Security into a welfare program instead of a supplemental retirement income system. The wealthy "invested" under compulsion, and we should pay what we promised, even to those who also lived responsibly and frugally.

[layman]

Who are these "well-off" elderly you keep writing about?

Go to any casino .... you will find many of them there.

[rabscuttle385]

Who are these "well-off" elderly you keep writing about?

Here's one of them...

(Flashback) McCain gets $1,930 a month from 'broken' Social Security system

So let's review...

McCain pisses away a taxpayer-funded Naval Academy education that could have gone to a more worthy (but less politically-connected) U.S. citizen.

McCain crashes five planes, all paid for by the U.S. taxpayer.

McCain takes corrupt gifts from Keating before Keating's savings and loan crashes, leading to losses that are paid for by the U.S. taxpayer.

McCain cavorts with left-wingers, fascists, and Marxists, giving the U.S. taxpayer such "gifts" as McCain-Feingold, amnesty, the TARP bailouts, cap-and-tax, and Obama's election.

Yet somehow he gets a fat Congressional paycheck and benefits and an extra (!!) Social Security check. After throwing the election to Obama, he gets access to millions of dollars in campaign contributions made by conservative Republicans who didn't know any better, and he gets to fly around the world (on the U.S. taxpayer's dime) making mischief in countries like Burma, Syria, Libya, and Iraq.

And then he has the nerve to brand himself as a "hero" while those same conservative Republicans (who still don't know any better) attack anyone who dares to question McCain's conduct with regards to (still) missing Vietnam POWs/MIAs and their families.

At the same time, his constituents (including people like the late Robert Krentz's family) are fending off hordes of illegals, gang bangers, and drug smugglers...while struggling to pay the taxes and other costs of McCain's mistakes.

Seriously, WHAT is wrong with this picture??!?

[freedumb2003]

Anyone and everyone 50 and younger should demand that SS and Medicare be halted immediately. Consider the payments into the system just another tax and cut our losses. We can figure out what to do with those dependent on the system AFTER we stop digging.

I guarantee you that SS is $0 in my retirement planning. Medicare might hang around but I am sure SS won’t.

[chris_bdba]

IMHO no ne should ever be recieving more than they paid in.If you paid in $30 a week for all of your working life(25 years) how can you expect a $800 check each month for 20 years. It just does not compute.

[muawiyah]

Those who are modestly well-off find their Social Security checks TAXED as regular income ~ and at the top rates to boot.

What that does is TRANSFER Social Security Funds to the General Revenues.

What should happen is that all taxes on Social Security should be returned to the Social Security Funds (part of the ledger).

Means testing would, of course, avoid the taxation of Social Security checks and would leave the money in Social Security.

Dollars to doughnuts there are a sufficient number of Congresscritters who understand how this happens who would object to means testing simply because they prefer to loot Social Security for the benefit of the General Revenues.

[blue state conservative]

My wife and I are in our mid-50s. Over the course of my life I have paid 3 times into SS what she has, yet according to projections on the SS website she will receive 60% of what I get. That disparity should warm any socialist’s heart.

So until we retire I guess we should be living it up rather than building our 401ks, since they will be used to “means test” us out of Social Security when our time comes.

[goodnesswins]

Hey...just getting a return of 1% on what we put in would be nice (40+ years)

[wtc911]

IMHO no ne should ever be recieving more than they paid in.If you paid in $30 a week for all of your working life(25 years) how can you expect a $800 check each month for 20 years. It just does not compute.

_________________________________________

Ridiculous post for at least three reasons....

The US Government took the money with a promise of return.

Thirty dollars a week ($1,560.00/yr) was worth a lot more twenty-five years ago than it is today.

Nobody works for just 25 years, 40 is more like it.

[yefragetuwrabrumuy]

The only sane way to do this is to offer well to do seniors a slightly better deal in tax savings if they do not take their SS check. Their choice.

It would work by replacing the Bush tax cuts with a slightly greater than equivalent deduction that could be used either for income tax or capital gains. So those who really needed the money, in their opinion, would continue to get it; and those who didn’t would get a slightly better deal.

The “lost revenues” to the government wouldn’t amount to much, because it would take the place of the Bush tax cuts.

As far as Medicare goes, the best way to deal with that is again, to offer a better deal. Set up the system so that seniors with money prefer to only use Medicare for major problems, and pay out of pocket for the small stuff. Optimally, cash only urgent care with no insurance or Medicare involvement at all.

[freekitty]

I would say graft by our Congress and others are the biggest spenders.

[9YearLurker]

Ha! Either she’s got multiple accounts here at FR—or she’s not alone.

[mlo]

"Means testing? No! That will turn Social Security into a welfare program instead of a supplemental retirement income system." The wealthy "invested" under compulsion, and we should pay what we promised, even to those who also lived responsibly and frugally."

It IS a welfare program. Guess what? Government makes promises it can't keep. It lies. We can't afford to pay all this money out. That's the problem.

Certainly, if we are going to have it at all it should be means tested.

[Mariner]

"That will turn Social Security into a welfare program instead of a supplemental retirement income system"

It's a welfar program now and always has been.

While politicians have always called it a retirement program to lessen the resentment of taxation, on the books it's ALWAYS been a welfare program whose threshold to entry is far too low.

A retirement program would be required to hold assets...and "special government bonds" are not assets to the USA.

In fact, government bonds will soon be an asset to nobody. And, an un-reformed SS system is a major cause of that.

And, that's the reality whether people choose to emote otherwise or not.

[miss marmelstein]

I don’t even want to get into what I think is her Medicare abuse! Due to chronic - and I mean chronic - hypochondria.

[Mariner]

"The US Government took the money with a promise of return."

Not true.

The laws that form SS make NO PROMISE OF RETURN of even principal, and no guarantee of any payment whatsoever.

Congress sets the SS payment schedule, not assets vs liabilities or bonded guarantee.