Anyone depressed about having to delay retirement due to inflation/stock market? (Canada, divorced)

[elnrgby]

Originally Posted by herringbone

Exactly. Would not that new proposal for new ss taxation beginning at 400k have the same effect on those high income workers who might choose to retire themselves, as you did?

"Nearly all Social Security reform proposals impose a disproportionate share of the burden of Social
Security reform on workers with relatively high lifetime earnings; that is, they increase the progressivity
of the system. In general, the more progressive is the system, the greater is the adverse impact on work
incentives."
https://home.treasury.gov/system/fil...brief-no-6.pdf

It seems that earners with lower-incomes already have an incentive to retire as early as 62, and what would happen if earners with higher-incomes had more incentive to stop working earlier as well. Wouldn't that just leave the middle class, i.e. 'the donut hole' I think you referred to in a later post, bearing greater burden if both the bottom and top subsets opt out of working as early as possible? Yikes.

Actually, I think that proposal is just pablum for the masses. As you noted in your latter post, the wage bases go up regardless- there is no real 'donut hole,' imho.

Projected Social Security wage base information as provided by the SSA in June 2022
Calendar year Intermediate estimated wage base $
2022 (actual) 147,000
2023 155,100
2024 165,300
2025 173,400
2026 180,600
2027 188,100
2028 195,600
2029 203,100
2030 210,600
2031 218,400
https://taxnews.ey.com/news/2022-087...3-through-2031

Maybe I wasn't clear in my prior posts. Yes, there definitely is an effect of additional tax on the decision to reduce working hours or retire earlier (as my own case proves) - but that effect would be much stronger if they suddenly started to tax the entire income (ie, without having a doughnut hole between $147k and $400k). People who are most likely to quit working past certain point due to high taxation are upper middle income people who are in that doughnut hole, who neither have to work 40 years to survive, nor are so rich that they hardly register an additional tax. That is why the doughnut hole makes sense, to prevent people in that hole from being disincentivized to work.

Now, they will need to do something to fix the soc security, primarily because many of the low-income seniors who live solely on ss would not be able to live on 75% of it. So, you ask a higher-income person: would you rather pay ss tax on more of your current income (and receive a tiny bit more for yourself in ss when you retire), or would you rather have means testing of ss when you retire, which would decrease your ss income to $0? I think the higher-income person would still rather have the first situation than the second (at least I would). Even if you are a high earner, having an assurance that you'll get soc security income does matter.

Taking these two things into account, yes, I think progressive taxes of any kind will definitely push higher earners to work less, but at the same time I think taxation of additional income would still be more acceptable to high earners than paying ss on $147k only (and on small gradual annual increases in that cutoff), only to receive $0 in ss in retirement, due to increased means testing. Do you follow me?

[elnrgby]

Originally Posted by herringbone

Apologies.

As to the topic, people have been 'conditioned,' to believe that the markets can only go higher over time. I doubt that many people see stocks as what they truly are: marketable securities, and as such, have an "inherent risk": the amount of risk that exists in the absence of controls.

Oh, I do think markets can only go higher over large intervals of time (eg, they will be higher 30 years from now) - that is in the nature of an economic system that functions in the realm of borrowing & paying off debts. But obviously markets take a deep dive periodically & can stay low for quite a while, possibly longer than many current retirees have left to live. That is why I never planned to live off of investments in retirement. To me, I could invest only those $ I'd be okay losing altogether.

[herringbone]

Originally Posted by elnrgby

Many jobs have been automated, and the process will continue. In the US, the largest fertility rate is found among the poorest women, who often do not work but live on social assistance, and do not produce workers but people who live on generational social assistance and/or in prisons. Meanwhile, countries with lowest birth rates have been thriving for several generations. Lower birth rate has been associated with higher standard of living everywhere, without any known exception.

What brought us where we are now is primarily the fact that the average life expectancy has been extended by 20 years. If most people still died before the age of 75, there would be no problem with maintaining social security benefits for everyone.

The lower birth rate may be as you say, associated, or correlated with a higher standard of living in some countries, but it is not the direct cause of that higher standard of living. It may be the result of that higher standard of living. But is that result sustainable? I would say to take a long look at Japan and its population decline and their economic prospects for growth- they are essentially imploding in upon themselves to the extent that they have re-considered their stance on allowing foreign workers in, I believe, as well as encouraging an 'age-free' society in which people 65 and older are not considered senior citizens and will be asked to continue working longer.

As for your second paragraph, that is like saying what came first- the chicken or the egg? I could just as easily say that there would be no problem with all people living to be 100+ if there were enough births of future workers to pay into the system. Which happened first, the declining birth rate or the increased longevity? I think they happened somewhat in tandem, unfortunately.

It just boils down to distribution being skewed and the resulting consequences. Automation/robotics will not solve the problem of decreasing tax revenues in an environment of increasing need.

Again, apologies to the OP/topic.

Perhaps we should start a thread along the lines of 'What is to be done?' We can ask Mr. Musk to take time out from his shenanigans to provide some input...

[jbgusa]

Originally Posted by herringbone

Apologies.

As to the topic, people have been 'conditioned,' to believe that the markets can only go higher over time. I doubt that many people see stocks as what they truly are: marketable securities, and as such, have an "inherent risk": the amount of risk that exists in the absence of controls.

Anybody who lived through 1966-82 (the Dow finally recovered to 1000 for the last time without dropping through 1000 after November 1982) should know this. It took $3.08 in November 1982 to purchase what a January 1966 dollar bought. While stocks have gone mostly up since November 1982 that direction is not written in stone, nor is an inflation rate of about 4% annually in 1982.

[miu]

Originally Posted by herringbone

There are those that would say that the opposite should be true, perhaps among them, US state/fed gov.s That is why some policies are enacted to subsidize families with children. US Gov.s are funded in large part by tax revenues from productive citizens. Thus, they need more people to have more children to generate more revenue, not less people to generate less revenue. Declining birth rates have brought us to where we are now- not enough workers paying in, yet an abundance of non-workers getting paid out. How do you think this dilemma will be solved if people are 'rewarded' for producing less workers?

Well... IMO our social security system is a pyramid scheme scam, and the flawed logic behind it is that the workforce will always be increasing, and that will fund the payouts. However, not only is the system weakened by paying out to those on "disabilities" (and yes, there are many faking their back injuries and collecting), but because of the global economy and technical advances, we are actually losing jobs in the US. Work is going overseas for cheaper labour. And technology is also making some industries obsolete.

The US economy is going to crash if we are counting on continuous expansion and development to define economic success. And NH is going to be ruined if we allow real estate developers to cut down our forests and turn them into housing developments for those who work in Boston and can't afford Boston real estate and who are able to telecommute. Not only is that going to price NH out of reach for longtime NH residents, but it's going to trash our environment. Our trees are the lungs of New England and keep our temperatures cooler, and we also only have so much groundwater.

[leadfoot4]

Originally Posted by elnrgby

Many jobs have been automated, and the process will continue. In the US, the largest fertility rate is found among the poorest women, who often do not work but live on social assistance, and do not produce workers but people who live on generational social assistance and/or in prisons. Meanwhile, countries with lowest birth rates have been thriving for several generations. Lower birth rate has been associated with higher standard of living everywhere, without any known exception.

What brought us where we are now is primarily the fact that the average life expectancy has been extended by 20 years. If most people still died before the age of 75, there would be no problem with maintaining social security benefits for everyone.

In this day of "wokeness", you're really sticking your neck out, by stating that, however, since you did, I'll add that you are correct, and I agree with you, 100%.

[elnrgby]

Originally Posted by herringbone

The lower birth rate may be as you say, associated, or correlated with a higher standard of living in some countries, but it is not the direct cause of that higher standard of living. It may be the result of that higher standard of living. But is that result sustainable? I would say to take a long look at Japan and its population decline and their economic prospects for growth- they are essentially imploding in upon themselves to the extent that they have re-considered their stance on allowing foreign workers in, I believe, as well as encouraging an 'age-free' society in which people 65 and older are not considered senior citizens and will be asked to continue working longer.

As for your second paragraph, that is like saying what came first- the chicken or the egg? I could just as easily say that there would be no problem with all people living to be 100+ if there were enough births of future workers to pay into the system. Which happened first, the declining birth rate or the increased longevity? I think they happened somewhat in tandem, unfortunately.

It just boils down to distribution being skewed and the resulting consequences. Automation/robotics will not solve the problem of decreasing tax revenues in an environment of increasing need.

Again, apologies to the OP/topic.

Perhaps we should start a thread along the lines of 'What is to be done?' We can ask Mr. Musk to take time out from his shenanigans to provide some input...

I do not doubt the lower birth rate is the leading cause of better standard of living. Children are still the largest expense, larger than housing or healthcare - because children need a lot of resources, and do not produce any while they are growing up. In my personal case, I started out very poor & retired very financially stable - part of the reason was a long training for a highly skilled work, but I think a more important, ie, the most important reason for my very major improvement in quality of life was the fact that I did not have kids. Btw, Japan is doing quite well, the level of the "problem" with shrinking & aging population is nowhere near the problems of poverty of overpopulated countries.

Increased number of people reaching 65 and increased longevity are not at all chicken & egg. Without increased longevity, the burden of having to support additional seniors reaching 65 would have been much smaller.

As a result of robotics, I think some things will become exponentially cheaper (because you don't have to pay the robot a minimum wage, or any wage, and the robot does not need healthcare or retirement benefits). A robotic caretaker would remove the need for nursing home, and would cost a small fraction of a live caretaker. True, a robotic caretaker wouldn't pay taxes, but the retired ss recipient would need a much smaller ss income to pay for a robot than for a nursing home or a live caretaker. I'm sure Mr. Musk knows all about that .

[elnrgby]

Originally Posted by leadfoot4

In this day of "wokeness", you're really sticking your neck out, by stating that, however, since you did, I'll add that you are correct, and I agree with you, 100%.

Well, it is what it is. "Wokeness" is a just manner of speaking, which does not change the actual reality.

[Maddie104]

Originally Posted by elnrgby

I do not doubt the lower birth rate is the leading cause of better standard of living. Children are still the largest expense, larger than housing or healthcare - because children need a lot of resources, and do not produce any while they are growing up. In my personal case, I started out very poor & retired very financially stable - part of the reason was a long training for a highly skilled work, but I think a more important, ie, the most important reason for my very major improvement in quality of life was the fact that I did not have kids. Btw, Japan is doing quite well, the level of the "problem" with shrinking & aging population is nowhere near the problems of poverty of overpopulated countries.

Increased number of people reaching 65 and increased longevity are not at all chicken & egg. Without increased longevity, the burden of having to support additional seniors reaching 65 would have been much smaller.

As a result of robotics, I think some things will become exponentially cheaper (because you don't have to pay the robot a minimum wage, or any wage, and the robot does not need healthcare or retirement benefits). A robotic caretaker would remove the need for nursing home, and would cost a small fraction of a live caretaker. True, a robotic caretaker wouldn't pay taxes, but the retired ss recipient would need a much smaller ss income to pay for a robot than for a nursing home or a live caretaker. I'm sure Mr. Musk knows all about that .

I would suggest that higher education leads to the higher standard of living due to a highly skilled workforce. Less children are typically a byproduct of deferring children during prime childbearing years due to education and professional needs and to a lesser extent personal choice. Better healthcare/medical advances lead to increased longevity. The other side of this argument is to support women who are in the workforce to have more children who become productive contributing members, i.e., paid maternity leave, subsidized childcare costs. Using your argument, what if no highly skilled women like yourself had children, could we count on robots?

[elnrgby]

Originally Posted by Maddie104

I would suggest that higher education leads to the higher standard of living due to a highly skilled workforce. Less children are typically a byproduct of deferring children during prime childbearing years due to education and professional needs and to a lesser extent personal choice. Better healthcare/medical advances lead to increased longevity. The other side of this argument is to support women who are in the workforce to have more children who become productive contributing members, i.e., paid maternity leave, subsidized childcare costs. Using your argument, what if no highly skilled women like yourself had children, could we count on robots?

My decision not to have kids was due to living through tremendous social unrest in my home country & immigration difficulties that dragged for almost 30 years after that. I just simply had a tremendous underlying sense of instability & danger, I suppose a form of PTSD, and felt bringing kids into the world would be extremely unsafe (and, in my situation, I think, I was entirely right). Higher education was not the issue; all my colleagues had nannies, and many of my colleagues (I mean also female ones, with high education) have had kids while still in training. I don't think women interested in very high education generally want to have many kids (though occasionally they do, but not commonly), so it IS a personal choice.

Re counting on robots, necessity is mother of invention, and I think caregiving robotics will be much improved in the near future. You can already do a complex surgery with remotely controlled robotic arms; why wouldn't you be able to change diapers with the same technology? That particular technology still needs somebody at the controls, but it could be somebody in India controlling the robotic arms in New York, who could potentially remotely change diapers & give sponge bath to more than 30 seniors in 8 hours.