The Case for 70

No, this isn’t a column about our highway speed limits. We already settled that a while back, though there are still some who insist that 55mph will save lives and gasoline, despite proof to the contrary. But that is grist for another column.

The 70 I’m referring to is age, and it is the proposed age at which full Social Security benefits would be paid in an ideal world. Unfortunately, we don’t live in that ideal world, so this will be a hypothetical exercise.

Even though it is only hypothetical, I will establish one ground rule, the same one that is used in every reasonable proposal offered by Congress: NONE OF THESE CHANGES WOULD APPLY TO ANYONE OVER THE AGE OF 54 AT THE TIME THEY WOULD GO INTO EFFECT.

I want to be sure you understand that rule, because it completely negates the entire usual backlash from the naysayers who accuse reformers of “robbing seniors.” That is how they are able to defeat some of the brightest and best proposals to “Save” Social Security and Medicare.

For lack of a better subject, I am going to use myself to illustrate how crazy the current system is in this country. You could do this yourself if you wanted to spend the time and effort to research it. However, I think my case will do just fine.

Okay, here is the proposal in its simplest terms:
· Full Social Security payments would commence at age 70 (up from age 67 for the generation that is currently retiring.
· Reduced Social Security payments would commence at age 67 (up from age 62)
· To discourage early payment (which depletes the fund way more than increased longevity in the modern age) the payment amount would be decreased twelve- percent for each year below the full retirement age, and would remain at that amount for the entire life of the annuitant.
· Medicare benefits would commence at age 70, regardless of when the applicant begins Social Security benefits.

I know some of you will consider this proposal to be “Draconian” (I think that word gets a capital ‘D’ it is so nasty) in its scope. Okay, let’s consider my own case, since I started my SS payments at age 62 and Medicare kicked in at age 65.

My total contribution to Social Security during my working lifetime was $49,577,and my employers also put in that amount for me, so I will claim that I put in $99,154. I have a chart that Social Security gave me that shows those amounts, so it isn’t estimated.

My total contribution to Medicare during that same period was $11,453, so using the equal employer-paid amount, I come up with $22,906.

I started collecting Social Security at age 62, and my first year payments were $14,000. I have since gotten several cost of living adjustments (COLA) so that my current payments equal $18,250. In those 11 years, I have collected $195,300 from Social Security.

My wife worked for the required forty quarters to qualify for her own Social Security payments, but she qualified for more as a spouse under my earnings. She also started her payments at age 62, and has received $74,700 to date.

So, with my payroll taxes of $99, 154 and my wife’s taxes of less than $5,000, we have received a combined total of $270,000, and we’re not done yet. If we both live another ten years—a probability—we will have collected over twice that amount.

I could try to compute how much Medicare has paid on my behalf for my contribution to that imaginary “fund” of $22,906. However, it would take a lot of research, and I already know that since I reached age 65 and went into my mandatory Medicare coverage, I have accumulated about $500,000 in medical and hospital bills. Medicare discounts and pays only a portion of those charges, but even so the amount has to be above $150,000.

Does my case do a pretty good job of illustrating why Social Security and Medicare are in deep trouble?

If my wife and I had had to wait until age 67 to start collecting Social Security, and to age 70 to enter the Medicare system, we would not have recovered even what we paid in at this point in time. We also would have probably contributed a lot more in payroll taxes in those intervening years.

Add to that the fact that I was diagnosed with what should have been a terminal disease back in 1980, and should never have lived to collect even a penny of Social Security or Medicare benefits.

Regardless of the facts, even if a miracle was to occur and Congress was able to pass the reforms above (they are quite similar to what Rep. Paul Ryan has proposed), it still would exempt all of us who are over age 54. We would continue to bleed the system, but at least there might be hope that our children and grandchildren would still have some form of benefits when they reach their golden years.

I do have one more note to add. You can probably tell from my writing that I am deeply opposed to government-run retirement and healthcare programs. There are those who have suggested that since I am so opposed to them, I should refuse to participate in them and sacrifice my SS payments and Medicare.

Well, aside from the fact that these are mandatory programs which I cannot opt out of, my refusal to take my benefits would be similar to the current proposals being put forth by both parties to solve our government debt and deficit crisis. My sacrifice wouldn’t make any difference, since it would be the proverbial “drop in a bucket,” or in this case, a “drop in the ocean.”