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The Tea Party is passé. Let’s start the Retirement Party. (Driscoll, you hire the band.) Everybody knows the demographics are breaking bad. You look at the population schedules and more people are going to retire than start working. Under the current system at least. The Democrats and the Republicans, they argue back and forth about this that and the other thing. But it’s always the same old things. The same variables. A little more of this. A little less of that. The same system Franklin Roosevelt invented 75 years ago. The same system Lyndon Johnson added onto 45 years ago. Those were great ideas at the time but this is the 21st century. Things have changed.
It’s going to require a lot of work to invent Social Security 2.0. But it’s do-able. So let’s do it. The politicians are champing at the bit, waiting for someone to tell them what to do. They react. Politicians never launch an original idea. Which is fine by us. Let’s give them the old win-win. Something creative for a change of pace. Something that wins for the United States, the young Americans, the people who already are retired, and especially us. What the heck, we’re the ones doing all the work here.
Here’s what I’m thinking. Right off the bat, the official retirement age goes back to 65 and that’s it. None of this Obama-Romney creep to 66 and then 67 and then 68. If you are an American citizen the official retirement age is 65 years old. Period.
Now what does that mean? For sure, you collect Social Security, Medicare, and whatever pension income is coming to you. Tax free. You can work without paying income taxes or Medicare taxes or Social Security taxes. You can withdraw money from your IRA or 401-k or defined benefit plan or whatever else you have tax free. You are done paying federal taxes.
You can be fired as soon as you turn 65. You have reached retirement age. There is no old age discrimination. If they want you they’ll keep you, though. Maybe they’ll give you a little pay cut because you’re not paying income taxes or Social Security anymore. Help their margins. But cash flow wise you’ll still be good, maybe better than before.
I’m guessing a big chunk of the work force will keep going from 65 to 70 because of the money. (Whatever you do don’t explain it to the Obama People that it’s a tax cut.) The fact they can remove cash from their retirement accounts tax free, they’ll probably start doing that, too. Almost certainly the disposable income of the old people will go up compared to where it is today.
Now once you hit 70, that’s a tougher one to figure. I’m thinking, make that the jackpot. You keep working after 70, that’s like hitting the lottery. Ding ding ding. First of all, people will see that and try to stay healthy, cutting medical costs. Plus it keeps them going. They’re earning money instead of sitting around all depressed, costing everyone else their money. How you structure that, I don’t know. How about a 50% Federal over-ride bonus on anything you make for the first 20 hours a week. Plus some sort of recognition. “This guy is 70 years old and he’s still cranking!”
What do you do with the rich people? Personally, I’d say give them the same deal. Encourage them to keep working and keep spending. This is America, come on. But if the numbers don’t add up (which I think they will by the way) then sure, means test it. But there’re better ways for the Government to grab money in my view. We’ll save Anti-Trust 2.0 for another day.
