1 00:00:00,120 --> 00:00:02,840 Speaker 1: In fact, there wasn't even really a concept of retirement 2 00:00:03,279 --> 00:00:07,040 Speaker 1: for most of human history. People are just work until 3 00:00:07,160 --> 00:00:18,520 Speaker 1: they quote high And Welcome back to Bloomberg Benchmark, a 4 00:00:18,600 --> 00:00:23,000 Speaker 1: show about the global economy. I'm Daniel Moss, Executive editor 5 00:00:23,560 --> 00:00:26,639 Speaker 1: for Global Economics at Bloomberg News in New York, and 6 00:00:26,640 --> 00:00:29,760 Speaker 1: I'm joined today in the studio by our guest host, 7 00:00:30,000 --> 00:00:34,440 Speaker 1: Kate Smith, who's an editor at Bloomberg covering college endowments. 8 00:00:34,720 --> 00:00:37,080 Speaker 1: Thanks Dan, and so today we're gonna be talking about 9 00:00:37,120 --> 00:00:39,839 Speaker 1: the retirement age and kind of all about it. So 10 00:00:40,080 --> 00:00:42,839 Speaker 1: it's historically been sixty five, but it's been inching higher, 11 00:00:42,880 --> 00:00:45,120 Speaker 1: and we wanted to talk about this piece that Peter 12 00:00:45,200 --> 00:00:48,360 Speaker 1: coy wrote. Um In that article, Peter wrote about this 13 00:00:48,400 --> 00:00:52,400 Speaker 1: really interesting working paper from the National Bureau of Economic Research, 14 00:00:52,840 --> 00:00:54,800 Speaker 1: and in that it says that on average, a lot 15 00:00:54,800 --> 00:00:57,560 Speaker 1: of Americans are actually healthy enough to work past their 16 00:00:57,600 --> 00:01:01,640 Speaker 1: sixty five birthday and that has the normal was economic implications, 17 00:01:02,080 --> 00:01:06,319 Speaker 1: and Kate, the political implications are not small either. I mean, 18 00:01:06,360 --> 00:01:08,600 Speaker 1: of course, you also have the not so nice question 19 00:01:08,640 --> 00:01:12,600 Speaker 1: that even if Americans can worse pacts sixty do employers 20 00:01:12,680 --> 00:01:15,160 Speaker 1: actually want them so to do all of those things? 21 00:01:15,160 --> 00:01:17,600 Speaker 1: We actually brought into the studio Peter Coy. So, Peter, 22 00:01:17,760 --> 00:01:20,960 Speaker 1: thanks for joining us. Thank you. Peter is Um, the 23 00:01:21,040 --> 00:01:24,559 Speaker 1: Business Week's economic editor and the author of this piece. 24 00:01:25,080 --> 00:01:27,039 Speaker 1: So Peter, I'm a little younger than you, but a 25 00:01:27,080 --> 00:01:29,720 Speaker 1: little older than Kate. I have it in my mind 26 00:01:29,760 --> 00:01:33,319 Speaker 1: that sixty five is this magical benchmark, but you're about 27 00:01:33,360 --> 00:01:36,240 Speaker 1: to tell us it's not, and that it's moving all 28 00:01:36,319 --> 00:01:39,320 Speaker 1: the time. First of all, when it's sixty five, come 29 00:01:39,400 --> 00:01:43,600 Speaker 1: from UM. Sixty five is where the retirement age, the 30 00:01:43,680 --> 00:01:47,039 Speaker 1: normal retirement age has been since social Security was started 31 00:01:47,160 --> 00:01:50,320 Speaker 1: in the nineteen thirties and during the Great Depression and 32 00:01:50,920 --> 00:01:53,720 Speaker 1: uh in the social security reforms that were intended to 33 00:01:53,720 --> 00:01:56,200 Speaker 1: stabilize the finances, they said, okay, we've got to raise 34 00:01:56,240 --> 00:02:00,880 Speaker 1: it in stages to sixty seven. So I'm fifty, My 35 00:02:00,880 --> 00:02:04,120 Speaker 1: my standard normal timement age is going to be sixty 36 00:02:04,200 --> 00:02:07,800 Speaker 1: six and a half. Now, that doesn't mean I can't 37 00:02:07,880 --> 00:02:10,880 Speaker 1: retire earlier than that. I could start collecting benefits at 38 00:02:10,919 --> 00:02:14,400 Speaker 1: sixty two the early retirement as as the earliest check 39 00:02:14,400 --> 00:02:16,400 Speaker 1: can get them. If I do that, I'm gonna get 40 00:02:17,040 --> 00:02:21,360 Speaker 1: less money per paycheck. And I can also retire later 41 00:02:21,720 --> 00:02:25,400 Speaker 1: and get bigger benefits per check if I wait till 42 00:02:25,600 --> 00:02:28,640 Speaker 1: like sixty eight or something, and they try to do 43 00:02:28,680 --> 00:02:32,720 Speaker 1: it to make it actuarily fair, so your lifetime benefits 44 00:02:32,760 --> 00:02:34,840 Speaker 1: will be the same no matter when you retire. And 45 00:02:34,880 --> 00:02:37,400 Speaker 1: the sixty number, though, where did that come from? You know? 46 00:02:37,480 --> 00:02:42,440 Speaker 1: Prior to Social Security, well, um, there had been various 47 00:02:42,680 --> 00:02:46,440 Speaker 1: state and private pension systems that had kind of locked 48 00:02:46,440 --> 00:02:48,679 Speaker 1: onto either sixty five or seventies. So it was a 49 00:02:48,680 --> 00:02:50,200 Speaker 1: little bit of a choice, well which one should we 50 00:02:50,200 --> 00:02:53,120 Speaker 1: go with? And I don't know who's FDR or Congress 51 00:02:53,320 --> 00:02:57,040 Speaker 1: settled on sixty five. There's a myth that it goes 52 00:02:57,080 --> 00:03:02,440 Speaker 1: back to Otto von Bismarck, the first Chancellor of United Germany, 53 00:03:02,919 --> 00:03:09,239 Speaker 1: who it's true that under Bismarck, Prussia and Germany did 54 00:03:09,280 --> 00:03:12,960 Speaker 1: have sort of the world's first public pension system. But 55 00:03:13,200 --> 00:03:15,760 Speaker 1: contrary to the myth at the age, there was seventy 56 00:03:16,200 --> 00:03:20,560 Speaker 1: when it started, and later after Bismarck died, it was 57 00:03:20,600 --> 00:03:22,560 Speaker 1: lower to sixty five, and that's why it sticks in 58 00:03:22,560 --> 00:03:28,000 Speaker 1: people's minds. So wait a second. We owe the social 59 00:03:28,000 --> 00:03:32,079 Speaker 1: Security system in the United States to the iron Chancellor, 60 00:03:32,120 --> 00:03:35,880 Speaker 1: the iron consular Yes, really, I mean, you can't say 61 00:03:35,880 --> 00:03:39,760 Speaker 1: it it's one person because after Germany, then Britain had one, 62 00:03:40,000 --> 00:03:43,800 Speaker 1: and then as we said, there were green shoots. There 63 00:03:43,800 --> 00:03:46,160 Speaker 1: were different kind of pension systems in the US, but 64 00:03:46,640 --> 00:03:49,640 Speaker 1: so security really changed. Everything was a huge program, and 65 00:03:50,080 --> 00:03:53,960 Speaker 1: so it's a bedrock of American security today. I was 66 00:03:54,000 --> 00:03:56,680 Speaker 1: doing a little research on that sixty and I found 67 00:03:56,680 --> 00:03:58,960 Speaker 1: out this really funny rumor that apparently was going around 68 00:03:59,000 --> 00:04:02,000 Speaker 1: the time of when Bismarck was around, and apparently the 69 00:04:02,080 --> 00:04:04,600 Speaker 1: rumor was that they turned it into six because that 70 00:04:05,040 --> 00:04:07,560 Speaker 1: was when Bismarck himself wanted to retire, but that that 71 00:04:07,720 --> 00:04:10,520 Speaker 1: ended up being false, but that was apparently the rumor 72 00:04:10,600 --> 00:04:12,480 Speaker 1: at the time that was going around. But you know, 73 00:04:13,280 --> 00:04:17,680 Speaker 1: back when or seventy, whichever the choice was, when those 74 00:04:17,680 --> 00:04:21,040 Speaker 1: are being put in, average life expectancy was much lower 75 00:04:21,040 --> 00:04:24,160 Speaker 1: than it is now, so people tended to have quite 76 00:04:24,200 --> 00:04:27,520 Speaker 1: short retirements. In fact, there wasn't even really a concept 77 00:04:27,560 --> 00:04:31,719 Speaker 1: of retirement for most of human history. People would just 78 00:04:32,000 --> 00:04:36,600 Speaker 1: work until they croaked. I think croaked is a technical term, 79 00:04:36,720 --> 00:04:40,360 Speaker 1: right dan um cold term for death, or until they 80 00:04:40,400 --> 00:04:44,200 Speaker 1: just were completely incapacitated um, in which case they'd just 81 00:04:44,279 --> 00:04:49,760 Speaker 1: be lift in the field pretty much. And my article 82 00:04:49,839 --> 00:04:53,119 Speaker 1: talks about this new research at Kate mentioned the National 83 00:04:53,160 --> 00:04:55,760 Speaker 1: Beer of Economic Research has run a couple of papers 84 00:04:55,760 --> 00:04:59,599 Speaker 1: recently with data which is really nice. It's really good 85 00:04:59,600 --> 00:05:04,320 Speaker 1: news that Americans are living longer a but also be 86 00:05:04,520 --> 00:05:08,800 Speaker 1: healthier lives. So it's not only that you're you're alive 87 00:05:08,880 --> 00:05:13,440 Speaker 1: at say seventy, but you you can still work. So 88 00:05:14,480 --> 00:05:16,359 Speaker 1: the headline ahead on the article at one point was 89 00:05:16,400 --> 00:05:19,080 Speaker 1: admitted you could keep working at seventy. You know, if 90 00:05:19,120 --> 00:05:22,880 Speaker 1: you can golf eighteen holes under the broiling hot sun, 91 00:05:24,240 --> 00:05:28,520 Speaker 1: presumably you can sit for eight hours at a desk. 92 00:05:30,000 --> 00:05:32,640 Speaker 1: And you get into this in your article. But has 93 00:05:32,720 --> 00:05:37,400 Speaker 1: the system around which this whole concept of retirement and 94 00:05:37,520 --> 00:05:40,560 Speaker 1: social security and all the infrastructure that's been built up 95 00:05:40,600 --> 00:05:43,760 Speaker 1: around it, has it caught up with this ability to 96 00:05:43,800 --> 00:05:47,599 Speaker 1: work well past seventy that you're describing. Well, the move, 97 00:05:48,120 --> 00:05:52,279 Speaker 1: the gradual, incremental move from to sixty seven was a 98 00:05:52,320 --> 00:05:55,560 Speaker 1: step in that direction, but the people are saying we 99 00:05:55,600 --> 00:05:59,680 Speaker 1: can go past that. You could go to seventy or something. Now, 100 00:05:59,720 --> 00:06:02,440 Speaker 1: this art's getting into some sticky stuff, which is like 101 00:06:03,600 --> 00:06:06,960 Speaker 1: if you have a job, you know, doing podcasts on 102 00:06:07,000 --> 00:06:10,920 Speaker 1: the radio, then it's really not physically strenuous work except 103 00:06:10,920 --> 00:06:14,119 Speaker 1: for maybe your vocal cords, and so you could work 104 00:06:14,320 --> 00:06:17,400 Speaker 1: easily to seventy. But if you have a job digging 105 00:06:17,440 --> 00:06:21,279 Speaker 1: ditches or working on an assembly line, or changing beds 106 00:06:21,279 --> 00:06:25,000 Speaker 1: in a hotel, or waiting tables or flipping burgers, there 107 00:06:25,000 --> 00:06:28,479 Speaker 1: are a lot of jobs that are physically demanding, and 108 00:06:29,440 --> 00:06:32,640 Speaker 1: uh they also tend to be the lower paying jobs. 109 00:06:33,560 --> 00:06:39,640 Speaker 1: I mean NFL and NBA being exceptions. So the very 110 00:06:39,760 --> 00:06:44,200 Speaker 1: people who are getting less money for their work are 111 00:06:44,279 --> 00:06:47,400 Speaker 1: also in jobs that are harder to do at older ages, 112 00:06:47,440 --> 00:06:52,200 Speaker 1: so they have less desirable work and um, for them, 113 00:06:52,240 --> 00:06:56,000 Speaker 1: going to seventy truly would be a hardship. So we 114 00:06:56,080 --> 00:06:59,920 Speaker 1: really haven't figured out a way to deal with taking 115 00:07:00,000 --> 00:07:02,960 Speaker 1: advantage of the greater health and longevity for the most 116 00:07:03,000 --> 00:07:09,200 Speaker 1: of the population for fixing source securities finances without imposing 117 00:07:09,360 --> 00:07:14,240 Speaker 1: undue burden on the low income generally low income segment 118 00:07:14,280 --> 00:07:16,800 Speaker 1: of population. And as you mentioned your piece, the way 119 00:07:16,840 --> 00:07:19,360 Speaker 1: social security works is it's not kind of I mean, 120 00:07:19,400 --> 00:07:21,960 Speaker 1: I'm sorry, it is black and white. Either you are 121 00:07:22,120 --> 00:07:24,680 Speaker 1: not working or you are. There's no kind of there's 122 00:07:24,680 --> 00:07:27,360 Speaker 1: no gradient to it, and right, and the disability system 123 00:07:27,480 --> 00:07:30,760 Speaker 1: works the same way because the disability income is a 124 00:07:30,800 --> 00:07:34,400 Speaker 1: component of social security. You don't have to you can 125 00:07:34,440 --> 00:07:37,560 Speaker 1: get at any age. But it's just like that, you 126 00:07:37,600 --> 00:07:41,880 Speaker 1: have a whole determination about whether you are well enough 127 00:07:41,920 --> 00:07:44,640 Speaker 1: to work, and if you are, you don't get the benefit. 128 00:07:45,440 --> 00:07:48,680 Speaker 1: The benefit is a percent or zero. And so it's 129 00:07:48,800 --> 00:07:51,360 Speaker 1: really a cliff effect. Because it's a cliff effect, it 130 00:07:51,440 --> 00:07:57,280 Speaker 1: tends to cause a lot of debate, you know, and 131 00:07:57,280 --> 00:08:02,120 Speaker 1: and argumentation. It's to strenuous for both sides, both the 132 00:08:02,200 --> 00:08:08,320 Speaker 1: applicant and the government. And so how would you there's 133 00:08:08,360 --> 00:08:10,680 Speaker 1: no One of the ideas I had was okay, well 134 00:08:10,760 --> 00:08:14,480 Speaker 1: there should be a way where okay, if you, if 135 00:08:14,520 --> 00:08:16,920 Speaker 1: you if you are one of these people who has 136 00:08:16,920 --> 00:08:20,360 Speaker 1: a physically strenuous job, then we'll keep we'll have the 137 00:08:20,400 --> 00:08:24,640 Speaker 1: retirement age at seventy, but you can just apply for disability. 138 00:08:24,720 --> 00:08:26,560 Speaker 1: And the problem is that just turns out to be 139 00:08:26,600 --> 00:08:29,280 Speaker 1: a huge administrative headache. Is no way he wants to 140 00:08:29,280 --> 00:08:32,880 Speaker 1: go through that. In addition to the ability to work 141 00:08:32,920 --> 00:08:36,760 Speaker 1: for longer. Don't people have to work for longer now 142 00:08:37,559 --> 00:08:41,520 Speaker 1: because they're going to be around for a greater period 143 00:08:41,559 --> 00:08:44,679 Speaker 1: of time, they need to maintain their house. Then when 144 00:08:44,679 --> 00:08:47,360 Speaker 1: it gives some money to their grandchildren. They want to 145 00:08:47,360 --> 00:08:49,560 Speaker 1: do all these things I make. People need the money. 146 00:08:49,600 --> 00:08:53,760 Speaker 1: It's not just about being physically or intellectually able to 147 00:08:53,760 --> 00:08:57,240 Speaker 1: do it. There's a necessity, there isn't there. So think 148 00:08:57,280 --> 00:08:59,760 Speaker 1: about that. We're gonna get you on that in a second. 149 00:08:59,760 --> 00:09:02,720 Speaker 1: But first I have a question might reflect the fact 150 00:09:02,760 --> 00:09:05,520 Speaker 1: I was born outside the United States. People here this 151 00:09:05,679 --> 00:09:09,320 Speaker 1: term the third rail. Social Security is the third rail, 152 00:09:09,440 --> 00:09:13,080 Speaker 1: But help me out what is the first and what 153 00:09:13,240 --> 00:09:17,320 Speaker 1: is the second? So this is a subway analogy. Actually, Um, 154 00:09:17,440 --> 00:09:19,120 Speaker 1: so you know you're standing on the subway platform. You 155 00:09:19,120 --> 00:09:21,760 Speaker 1: look down, you see three rails. The first two are 156 00:09:21,800 --> 00:09:25,360 Speaker 1: what the car actually runs on, and then the third rail. 157 00:09:25,400 --> 00:09:26,920 Speaker 1: And if you look closely, the third rail is actually 158 00:09:27,000 --> 00:09:28,760 Speaker 1: much thicker. It's kind of like it almost looks like 159 00:09:28,760 --> 00:09:32,240 Speaker 1: it's like a box, long box, and it actually encases 160 00:09:32,280 --> 00:09:36,160 Speaker 1: all of the electricity that uses to run the subway line. 161 00:09:36,320 --> 00:09:37,800 Speaker 1: So the idea is that if you touch it, you'll 162 00:09:37,920 --> 00:09:41,640 Speaker 1: like just like instantly die. It's horrible. And then and 163 00:09:41,679 --> 00:09:43,680 Speaker 1: everyone says, like if you hapen to fall in the 164 00:09:43,720 --> 00:09:46,640 Speaker 1: subway or something like that, like something atrocious, you should 165 00:09:46,679 --> 00:09:48,880 Speaker 1: never like go to the wall of the subway. You 166 00:09:48,880 --> 00:09:50,760 Speaker 1: should try to get in the middle of the tracks, 167 00:09:50,760 --> 00:09:52,959 Speaker 1: because if you touch the third rail, no matter what, 168 00:09:53,080 --> 00:09:57,959 Speaker 1: you will die. And an analogy invented just for social security, 169 00:09:58,000 --> 00:10:00,000 Speaker 1: I think people use it for all, like like really 170 00:10:00,160 --> 00:10:04,040 Speaker 1: hot button political things, you know, like if you touch it, 171 00:10:04,120 --> 00:10:06,080 Speaker 1: you're like, your dad is a politician. If you're like, 172 00:10:06,120 --> 00:10:08,200 Speaker 1: you know, a Republican and you want to start talking 173 00:10:08,240 --> 00:10:11,160 Speaker 1: about I don't know, some sort of like progressive social 174 00:10:11,160 --> 00:10:14,720 Speaker 1: thing third rail, right, Like, you touch it, your dad? Okay, 175 00:10:15,400 --> 00:10:17,959 Speaker 1: that's helpful, you know, Peter. We hear a lot about 176 00:10:18,000 --> 00:10:21,880 Speaker 1: people having to go back to work after they've retired 177 00:10:21,960 --> 00:10:25,480 Speaker 1: because they've realized not only are they healthy, they didn't 178 00:10:25,520 --> 00:10:28,880 Speaker 1: put away enough. Now we've all heard these stories, the 179 00:10:28,920 --> 00:10:32,040 Speaker 1: burg of Flipper and so on. How does that feed 180 00:10:32,360 --> 00:10:35,160 Speaker 1: in to the guts of your story in bloom Book 181 00:10:35,160 --> 00:10:39,679 Speaker 1: Business Week. Well, first of all, you don't have to 182 00:10:39,720 --> 00:10:43,679 Speaker 1: retire at any age, and people are free to work 183 00:10:43,800 --> 00:10:46,480 Speaker 1: till past a hundred if they want to. What we're 184 00:10:46,480 --> 00:10:49,400 Speaker 1: talking about here is mostly what's the normal retirement age, 185 00:10:49,800 --> 00:10:53,520 Speaker 1: which is the son of the sweet spot for your benefits, 186 00:10:53,840 --> 00:10:57,959 Speaker 1: And it turns out lots of people take this normal 187 00:10:58,000 --> 00:11:01,800 Speaker 1: retirement age is almost like the spected retirement. So if 188 00:11:01,840 --> 00:11:04,600 Speaker 1: you just look at the peaks and troughs of when 189 00:11:04,640 --> 00:11:07,440 Speaker 1: people retire, there's a big jump at sixty two, which 190 00:11:07,480 --> 00:11:10,520 Speaker 1: is the earliest you can get social security, and that 191 00:11:10,559 --> 00:11:13,199 Speaker 1: hasn't changed, by the way, when the normal went from 192 00:11:14,160 --> 00:11:16,760 Speaker 1: and then you get another one whatever the normal retirement ages. 193 00:11:17,720 --> 00:11:21,560 Speaker 1: And so there's little bit of a social expectations component 194 00:11:21,640 --> 00:11:25,160 Speaker 1: to this. The government is kind of molding people's behavior 195 00:11:25,320 --> 00:11:28,280 Speaker 1: just by what it sets for its these numbers. But 196 00:11:28,320 --> 00:11:30,720 Speaker 1: don't you think of like sixty two and then sixty 197 00:11:30,760 --> 00:11:32,680 Speaker 1: five as well as these is kind of like mental 198 00:11:32,760 --> 00:11:35,040 Speaker 1: finish lines, and especially for you know, these jobs that 199 00:11:35,080 --> 00:11:38,160 Speaker 1: we're talking about, the you know, the grocery bagger, the 200 00:11:38,360 --> 00:11:40,440 Speaker 1: burger flipper. I mean, if you're doing a job like that, 201 00:11:40,480 --> 00:11:43,920 Speaker 1: you have to have a finish line. You probably did, 202 00:11:43,960 --> 00:11:45,600 Speaker 1: you see what I'm saying that to take away that 203 00:11:45,600 --> 00:11:49,400 Speaker 1: finished line, I'm sure would be difficult to move the 204 00:11:49,440 --> 00:11:51,959 Speaker 1: finish line exactly when you're in the race. When you're 205 00:11:51,960 --> 00:11:55,720 Speaker 1: already in the race. Why they didn't move up the 206 00:11:55,880 --> 00:11:58,440 Speaker 1: sixty two. It kept a sixty to do where it 207 00:11:58,520 --> 00:12:01,320 Speaker 1: was for all those people who just you know, we're 208 00:12:01,360 --> 00:12:03,640 Speaker 1: just dying and dying to get to when they as 209 00:12:03,679 --> 00:12:07,360 Speaker 1: soon as they can get a sort of security check. Interesting. Yeah, 210 00:12:07,600 --> 00:12:11,760 Speaker 1: so why doesn't Congress just go ahead and mandate a 211 00:12:11,800 --> 00:12:16,720 Speaker 1: new retirement age of seventy and simultaneously make it easier 212 00:12:16,760 --> 00:12:21,480 Speaker 1: for people who have physically demanding jobs to go on 213 00:12:21,600 --> 00:12:25,760 Speaker 1: disability at say sixty five. Why don't they just do that? Well, 214 00:12:25,840 --> 00:12:28,280 Speaker 1: it is a possibility. As I said before, one of 215 00:12:28,320 --> 00:12:31,760 Speaker 1: the problems is just the sheer administrative headache of trying 216 00:12:31,760 --> 00:12:34,400 Speaker 1: to figure al who's disabled and who's not. That would 217 00:12:34,440 --> 00:12:37,160 Speaker 1: be to be it would just flood the system. But 218 00:12:37,240 --> 00:12:40,760 Speaker 1: they could readefine it right, you had a physically demanding job, right, 219 00:12:40,880 --> 00:12:43,000 Speaker 1: So then it would be by career, which is yet 220 00:12:43,040 --> 00:12:46,720 Speaker 1: another idea. And that's not easy either, because you can 221 00:12:46,760 --> 00:12:49,280 Speaker 1: imagine the Gamesman chip of everybody trying to say, oh, 222 00:12:49,400 --> 00:12:53,240 Speaker 1: my job is physically demanding, I want that included. And 223 00:12:53,440 --> 00:12:57,240 Speaker 1: so the Greeks had have no lary elaborate system of 224 00:12:57,960 --> 00:13:02,400 Speaker 1: uh wait a second, where emulating the Greek economia, Well, 225 00:13:02,440 --> 00:13:07,920 Speaker 1: that's that's yours. They're over like five hundred job titles 226 00:13:07,960 --> 00:13:13,920 Speaker 1: in Greece that were labeled owners or physically demanding, including 227 00:13:13,920 --> 00:13:17,920 Speaker 1: like hairdressers, and radio technicians and so on. That's nothing 228 00:13:17,920 --> 00:13:22,280 Speaker 1: about the radio technicians, but I'm just saying, and the 229 00:13:22,280 --> 00:13:27,720 Speaker 1: people retire at age fifty. That got a little bit ridiculous. Okay, 230 00:13:27,800 --> 00:13:31,920 Speaker 1: So we've got Greek hair dresses and the Iron Chancellor 231 00:13:33,480 --> 00:13:36,680 Speaker 1: all helping shape just debate on social security for time 232 00:13:36,880 --> 00:13:41,600 Speaker 1: in the US. Yeah, it's bizarre. And like you said, 233 00:13:41,640 --> 00:13:43,640 Speaker 1: it really is the third rail though, because like as 234 00:13:43,640 --> 00:13:46,720 Speaker 1: a politician, and we talked about like the the mental 235 00:13:47,160 --> 00:13:48,840 Speaker 1: idea of a finish line. If you're in one of 236 00:13:48,880 --> 00:13:52,120 Speaker 1: these jobs, I mean, you're not going to get voted 237 00:13:52,160 --> 00:13:54,200 Speaker 1: in again. If you want to tell people actually you're 238 00:13:54,240 --> 00:13:56,720 Speaker 1: going to work another eight years, you have to. Okay, 239 00:13:56,760 --> 00:13:59,680 Speaker 1: you were saying before that you you you're younger, you 240 00:13:59,720 --> 00:14:02,680 Speaker 1: didn't actually expect so security to be there for you 241 00:14:02,720 --> 00:14:04,560 Speaker 1: when you retire. I don't. I don't know if that 242 00:14:04,600 --> 00:14:08,200 Speaker 1: makes me sound like a huge, huge cynic though, Um no, 243 00:14:08,400 --> 00:14:09,640 Speaker 1: I don't. I mean, and I think a lot of 244 00:14:09,640 --> 00:14:11,760 Speaker 1: people in my age don't as well, which is why people, 245 00:14:12,160 --> 00:14:13,839 Speaker 1: you know, we really take our four oh n K 246 00:14:14,040 --> 00:14:16,880 Speaker 1: seriously and you know, trying to contribute as much as 247 00:14:16,920 --> 00:14:18,640 Speaker 1: you can do that because you don't expect there to 248 00:14:18,720 --> 00:14:22,400 Speaker 1: be this kind of little safety net for you when 249 00:14:22,400 --> 00:14:25,320 Speaker 1: you get there. So for your generation, it's not really 250 00:14:25,360 --> 00:14:28,080 Speaker 1: the third royle, I guess not. I think like for me, 251 00:14:28,200 --> 00:14:30,640 Speaker 1: if I heard a politician saying that they want to 252 00:14:30,760 --> 00:14:33,440 Speaker 1: change the retirement age for someone who is my age, 253 00:14:33,880 --> 00:14:36,120 Speaker 1: it wouldn't make a difference to me. I think it 254 00:14:36,120 --> 00:14:38,120 Speaker 1: would just kind of be in one year out the other, 255 00:14:38,160 --> 00:14:40,680 Speaker 1: and then I listen to all their other platforms. But 256 00:14:40,800 --> 00:14:44,840 Speaker 1: if they want to tell someone who's fifty five, actually, 257 00:14:44,840 --> 00:14:47,040 Speaker 1: instead of working for another seven years, let's assume they 258 00:14:47,040 --> 00:14:49,160 Speaker 1: were retiring at sixty two, No, you have to work 259 00:14:49,200 --> 00:14:52,080 Speaker 1: for another fifteen years. That's I don't know. That just 260 00:14:52,080 --> 00:14:55,640 Speaker 1: seems unfair for just to make it simple, that would 261 00:14:55,680 --> 00:14:57,920 Speaker 1: be difficult to stomach. I would imagine if I were 262 00:14:57,960 --> 00:14:59,760 Speaker 1: fifty five years old and someone was telling me you 263 00:14:59,800 --> 00:15:02,080 Speaker 1: have to actually work double what you thought you had, Right, 264 00:15:02,880 --> 00:15:05,760 Speaker 1: you know, there's no shortage of elected officials who will 265 00:15:05,800 --> 00:15:09,760 Speaker 1: tell us that at some point quote entitlements unquote have 266 00:15:09,920 --> 00:15:15,480 Speaker 1: to be quote reformed unquote, and social securities generally the 267 00:15:15,520 --> 00:15:18,560 Speaker 1: main thing they're talking about there. But does it have 268 00:15:18,800 --> 00:15:22,120 Speaker 1: to be well? Has something has to happen? Even the 269 00:15:22,240 --> 00:15:26,119 Speaker 1: kind of the liberal interest groups that are rigorously defending 270 00:15:26,160 --> 00:15:30,640 Speaker 1: social security and that are mistrustful of raising retirement age 271 00:15:30,640 --> 00:15:33,360 Speaker 1: because they see it correctly as a benefit cut, do 272 00:15:33,520 --> 00:15:36,760 Speaker 1: think something needs to be done. And the usual debate 273 00:15:36,840 --> 00:15:40,440 Speaker 1: is how much of the change should occur in the 274 00:15:41,120 --> 00:15:46,480 Speaker 1: cutting benefits versus increasing revenue. And if you do increase revenue, 275 00:15:46,560 --> 00:15:48,960 Speaker 1: should it be entirely from within the system, i e. 276 00:15:49,120 --> 00:15:52,880 Speaker 1: From people's wages or could you draw on a bigger 277 00:15:53,000 --> 00:15:55,880 Speaker 1: pool of money? And there are many options you can 278 00:15:55,880 --> 00:16:00,680 Speaker 1: think of their you know, transactions, financial transaction tax or 279 00:16:00,760 --> 00:16:04,760 Speaker 1: capital gains tax or something like that to to kind 280 00:16:04,760 --> 00:16:06,760 Speaker 1: of get the bigger pot of money that's out there 281 00:16:06,760 --> 00:16:09,720 Speaker 1: in the economy. Interesting, So what's the next chapter in 282 00:16:09,760 --> 00:16:13,640 Speaker 1: this story? I think that we're coming up on. I 283 00:16:13,640 --> 00:16:16,480 Speaker 1: think every year that tweaks a little bit. But the 284 00:16:16,480 --> 00:16:20,680 Speaker 1: the trust fund is going to run out in twenty 285 00:16:20,960 --> 00:16:25,440 Speaker 1: thirty six or seven, and at that point the only 286 00:16:25,480 --> 00:16:29,840 Speaker 1: money the system will have is the money that's coming in, 287 00:16:30,320 --> 00:16:35,000 Speaker 1: which covers only about three quarters of benefits. And well 288 00:16:35,040 --> 00:16:37,440 Speaker 1: before that they're gonna have to come up with another 289 00:16:37,480 --> 00:16:41,320 Speaker 1: tweak to Social Security because there's no way we're gonna 290 00:16:41,320 --> 00:16:45,760 Speaker 1: just like cut benefits by a quarter, So I think, 291 00:16:46,640 --> 00:16:49,480 Speaker 1: who knows, maybe in the next presidential administration they're gonna 292 00:16:49,480 --> 00:16:52,440 Speaker 1: have to start revisiting this. Is it possible to even 293 00:16:52,560 --> 00:16:55,520 Speaker 1: live on Social Security like people? I can imagine it 294 00:16:55,560 --> 00:16:59,040 Speaker 1: would be tough. Here in New York City people do Dan. 295 00:16:59,400 --> 00:17:02,080 Speaker 1: It's it's a musing how many I wish I had 296 00:17:02,080 --> 00:17:05,400 Speaker 1: the percentages of my fingertips. But as a substantial percentage 297 00:17:05,440 --> 00:17:10,800 Speaker 1: of Americans who have no pension, private pension and no 298 00:17:11,160 --> 00:17:15,920 Speaker 1: retirement savings and social Security is there primary means of 299 00:17:16,000 --> 00:17:19,040 Speaker 1: support and they are able to live a decent life 300 00:17:19,040 --> 00:17:24,320 Speaker 1: on that, you know, a penurious life. Interesting. I mean 301 00:17:24,359 --> 00:17:26,360 Speaker 1: one thing I also find interesting about you know, if 302 00:17:26,359 --> 00:17:28,840 Speaker 1: you want to talk about changing retirement benefits, as you 303 00:17:28,880 --> 00:17:32,400 Speaker 1: look at state and city pension systems, you know, their 304 00:17:32,400 --> 00:17:34,640 Speaker 1: public pension systems, you know, kind of a local version 305 00:17:34,640 --> 00:17:36,600 Speaker 1: of Social Security, if you will. And you've seen a 306 00:17:36,600 --> 00:17:41,480 Speaker 1: few court rulings that actually really benefit retirees, um like 307 00:17:41,720 --> 00:17:45,879 Speaker 1: more so than actually the law would necessarily UM agree with. 308 00:17:47,240 --> 00:17:50,520 Speaker 1: Great example is Detroit um in that bankruptcy settlement, those 309 00:17:50,560 --> 00:17:54,040 Speaker 1: pensioners got about eighty seven cents on the dollar. Well, 310 00:17:54,119 --> 00:17:58,199 Speaker 1: you saw some bondholders who were legally above pensions like 311 00:17:58,280 --> 00:18:01,320 Speaker 1: they were, there was no question about it. I mean, 312 00:18:01,359 --> 00:18:04,760 Speaker 1: some walked away with nothing right. I think that reflects 313 00:18:04,960 --> 00:18:09,440 Speaker 1: the public's perception that it's really hard to just leave 314 00:18:09,520 --> 00:18:12,240 Speaker 1: people in the lurch. But I also think it reflects 315 00:18:12,280 --> 00:18:18,320 Speaker 1: a complete inability to predict what can happen with benefits 316 00:18:18,400 --> 00:18:20,400 Speaker 1: and when it's really you know, someone's life in the line. 317 00:18:20,520 --> 00:18:22,840 Speaker 1: You know what you're talking like, can you really survive 318 00:18:22,960 --> 00:18:26,440 Speaker 1: on what's currently Social Security is? And I think to me, anyway, 319 00:18:26,440 --> 00:18:29,159 Speaker 1: when I'm looking at social Security, seeing rulings like in 320 00:18:29,200 --> 00:18:33,359 Speaker 1: Detroit really make you realize that it's impossible to predict 321 00:18:33,400 --> 00:18:35,120 Speaker 1: what you can do because even if you know every 322 00:18:35,200 --> 00:18:39,560 Speaker 1: law about this, who's to say, you know, emotions won't prevail. 323 00:18:41,359 --> 00:18:45,359 Speaker 1: You know, a lot of people talk about working longer 324 00:18:45,440 --> 00:18:48,679 Speaker 1: because they need the money to retire. And then and 325 00:18:48,720 --> 00:18:50,959 Speaker 1: they do surveys, so they ask people every year do 326 00:18:51,000 --> 00:18:53,600 Speaker 1: you expect to retire with the next year, and the 327 00:18:53,640 --> 00:18:55,840 Speaker 1: answer we no, no, no, And then one year to 328 00:18:55,920 --> 00:18:57,480 Speaker 1: say do you expect to retire the next year and 329 00:18:57,480 --> 00:19:02,080 Speaker 1: they say, oh, I already retire last year. It happens 330 00:19:02,520 --> 00:19:05,960 Speaker 1: amazingly abruptly for a lot of people. A spouse gets sick, 331 00:19:06,200 --> 00:19:09,000 Speaker 1: you get sick, change at work, and suddenly you're out 332 00:19:09,000 --> 00:19:10,679 Speaker 1: of the You're out of the workforce. Okay, so then 333 00:19:10,720 --> 00:19:12,399 Speaker 1: let me ask you the obvious question. You guys are 334 00:19:12,400 --> 00:19:14,080 Speaker 1: a little bit older than I am, when do you 335 00:19:14,080 --> 00:19:18,760 Speaker 1: guys plan on retiring? Well, I have a five month 336 00:19:18,840 --> 00:19:24,680 Speaker 1: old daughter in addition to a teenage son, so I'm yeah, 337 00:19:24,840 --> 00:19:27,920 Speaker 1: never is a pretty good estimate. Great, sorry to hear that, 338 00:19:28,240 --> 00:19:30,480 Speaker 1: But don't you well, I shouldn't say this because I 339 00:19:30,560 --> 00:19:33,240 Speaker 1: just finished saying that you shouldn't allow, you know, random 340 00:19:33,320 --> 00:19:35,800 Speaker 1: numbers picked out of the government to determine your thinking. 341 00:19:35,840 --> 00:19:39,800 Speaker 1: But six or six and a half says the economist 342 00:19:41,040 --> 00:19:45,800 Speaker 1: will come record an episode at your beach house, Peter. So, 343 00:19:46,000 --> 00:19:52,120 Speaker 1: in all seriousness, thanks for joining us. Thank you. Benchmark 344 00:19:52,160 --> 00:19:54,199 Speaker 1: will be back next week and until then, you can 345 00:19:54,240 --> 00:19:57,720 Speaker 1: find us on the Bloomberg terminal and Bloomberg dot com, 346 00:19:57,760 --> 00:20:01,080 Speaker 1: as well as iTunes and Stitcher. While you're there, take 347 00:20:01,119 --> 00:20:03,840 Speaker 1: a minute to rate and review the show so more 348 00:20:03,920 --> 00:20:06,159 Speaker 1: listeners can find us and let us know what you 349 00:20:06,240 --> 00:20:08,159 Speaker 1: thought of the show. You can talk to Dan and 350 00:20:08,200 --> 00:20:10,840 Speaker 1: I on Twitter. You can find Dannet at Daniel Mass 351 00:20:11,000 --> 00:20:13,200 Speaker 1: d C and you can find me at by Keith Smith. 352 00:20:13,680 --> 00:20:16,640 Speaker 1: And our guest Peter is on Twitter at Peter Coy, 353 00:20:16,800 --> 00:20:19,520 Speaker 1: and don't forget to check out the article he's written 354 00:20:19,560 --> 00:20:21,200 Speaker 1: about this. We'll see you next week.