WEBVTT - 42: When I'm Sixty-Four 0:00:00.120 --> 0:00:02.840 In fact, there wasn't even really a concept of retirement 0:00:03.279 --> 0:00:07.040 for most of human history. People are just work until 0:00:07.160 --> 0:00:18.520 they quote high And Welcome back to Bloomberg Benchmark, a 0:00:18.600 --> 0:00:23.000 show about the global economy. I'm Daniel Moss, Executive editor 0:00:23.560 --> 0:00:26.639 for Global Economics at Bloomberg News in New York, and 0:00:26.640 --> 0:00:29.760 I'm joined today in the studio by our guest host, 0:00:30.000 --> 0:00:34.440 Kate Smith, who's an editor at Bloomberg covering college endowments. 0:00:34.720 --> 0:00:37.080 Thanks Dan, and so today we're gonna be talking about 0:00:37.120 --> 0:00:39.839 the retirement age and kind of all about it. So 0:00:40.080 --> 0:00:42.839 it's historically been sixty five, but it's been inching higher, 0:00:42.880 --> 0:00:45.120 and we wanted to talk about this piece that Peter 0:00:45.200 --> 0:00:48.360 coy wrote. Um In that article, Peter wrote about this 0:00:48.400 --> 0:00:52.400 really interesting working paper from the National Bureau of Economic Research, 0:00:52.840 --> 0:00:54.800 and in that it says that on average, a lot 0:00:54.800 --> 0:00:57.560 of Americans are actually healthy enough to work past their 0:00:57.600 --> 0:01:01.640 sixty five birthday and that has the normal was economic implications, 0:01:02.080 --> 0:01:06.319 and Kate, the political implications are not small either. I mean, 0:01:06.360 --> 0:01:08.600 of course, you also have the not so nice question 0:01:08.640 --> 0:01:12.600 that even if Americans can worse pacts sixty do employers 0:01:12.680 --> 0:01:15.160 actually want them so to do all of those things? 0:01:15.160 --> 0:01:17.600 We actually brought into the studio Peter Coy. So, Peter, 0:01:17.760 --> 0:01:20.960 thanks for joining us. Thank you. Peter is Um, the 0:01:21.040 --> 0:01:24.559 Business Week's economic editor and the author of this piece. 0:01:25.080 --> 0:01:27.039 So Peter, I'm a little younger than you, but a 0:01:27.080 --> 0:01:29.720 little older than Kate. I have it in my mind 0:01:29.760 --> 0:01:33.319 that sixty five is this magical benchmark, but you're about 0:01:33.360 --> 0:01:36.240 to tell us it's not, and that it's moving all 0:01:36.319 --> 0:01:39.320 the time. First of all, when it's sixty five, come 0:01:39.400 --> 0:01:43.600 from UM. Sixty five is where the retirement age, the 0:01:43.680 --> 0:01:47.039 normal retirement age has been since social Security was started 0:01:47.160 --> 0:01:50.320 in the nineteen thirties and during the Great Depression and 0:01:50.920 --> 0:01:53.720 uh in the social security reforms that were intended to 0:01:53.720 --> 0:01:56.200 stabilize the finances, they said, okay, we've got to raise 0:01:56.240 --> 0:02:00.880 it in stages to sixty seven. So I'm fifty, My 0:02:00.880 --> 0:02:04.120 my standard normal timement age is going to be sixty 0:02:04.200 --> 0:02:07.800 six and a half. Now, that doesn't mean I can't 0:02:07.880 --> 0:02:10.880 retire earlier than that. I could start collecting benefits at 0:02:10.919 --> 0:02:14.400 sixty two the early retirement as as the earliest check 0:02:14.400 --> 0:02:16.400 can get them. If I do that, I'm gonna get 0:02:17.040 --> 0:02:21.360 less money per paycheck. And I can also retire later 0:02:21.720 --> 0:02:25.400 and get bigger benefits per check if I wait till 0:02:25.600 --> 0:02:28.640 like sixty eight or something, and they try to do 0:02:28.680 --> 0:02:32.720 it to make it actuarily fair, so your lifetime benefits 0:02:32.760 --> 0:02:34.840 will be the same no matter when you retire. And 0:02:34.880 --> 0:02:37.400 the sixty number, though, where did that come from? You know? 0:02:37.480 --> 0:02:42.440 Prior to Social Security, well, um, there had been various 0:02:42.680 --> 0:02:46.440 state and private pension systems that had kind of locked 0:02:46.440 --> 0:02:48.679 onto either sixty five or seventies. So it was a 0:02:48.680 --> 0:02:50.200 little bit of a choice, well which one should we 0:02:50.200 --> 0:02:53.120 go with? And I don't know who's FDR or Congress 0:02:53.320 --> 0:02:57.040 settled on sixty five. There's a myth that it goes 0:02:57.080 --> 0:03:02.440 back to Otto von Bismarck, the first Chancellor of United Germany, 0:03:02.919 --> 0:03:09.239 who it's true that under Bismarck, Prussia and Germany did 0:03:09.280 --> 0:03:12.960 have sort of the world's first public pension system. But 0:03:13.200 --> 0:03:15.760 contrary to the myth at the age, there was seventy 0:03:16.200 --> 0:03:20.560 when it started, and later after Bismarck died, it was 0:03:20.600 --> 0:03:22.560 lower to sixty five, and that's why it sticks in 0:03:22.560 --> 0:03:28.000 people's minds. So wait a second. We owe the social 0:03:28.000 --> 0:03:32.079 Security system in the United States to the iron Chancellor, 0:03:32.120 --> 0:03:35.880 the iron consular Yes, really, I mean, you can't say 0:03:35.880 --> 0:03:39.760 it it's one person because after Germany, then Britain had one, 0:03:40.000 --> 0:03:43.800 and then as we said, there were green shoots. There 0:03:43.800 --> 0:03:46.160 were different kind of pension systems in the US, but 0:03:46.640 --> 0:03:49.640 so security really changed. Everything was a huge program, and 0:03:50.080 --> 0:03:53.960 so it's a bedrock of American security today. I was 0:03:54.000 --> 0:03:56.680 doing a little research on that sixty and I found 0:03:56.680 --> 0:03:58.960 out this really funny rumor that apparently was going around 0:03:59.000 --> 0:04:02.000 the time of when Bismarck was around, and apparently the 0:04:02.080 --> 0:04:04.600 rumor was that they turned it into six because that 0:04:05.040 --> 0:04:07.560 was when Bismarck himself wanted to retire, but that that 0:04:07.720 --> 0:04:10.520 ended up being false, but that was apparently the rumor 0:04:10.600 --> 0:04:12.480 at the time that was going around. But you know, 0:04:13.280 --> 0:04:17.680 back when or seventy, whichever the choice was, when those 0:04:17.680 --> 0:04:21.040 are being put in, average life expectancy was much lower 0:04:21.040 --> 0:04:24.160 than it is now, so people tended to have quite 0:04:24.200 --> 0:04:27.520 short retirements. In fact, there wasn't even really a concept 0:04:27.560 --> 0:04:31.719 of retirement for most of human history. People would just 0:04:32.000 --> 0:04:36.600 work until they croaked. I think croaked is a technical term, 0:04:36.720 --> 0:04:40.360 right dan um cold term for death, or until they 0:04:40.400 --> 0:04:44.200 just were completely incapacitated um, in which case they'd just 0:04:44.279 --> 0:04:49.760 be lift in the field pretty much. And my article 0:04:49.839 --> 0:04:53.119 talks about this new research at Kate mentioned the National 0:04:53.160 --> 0:04:55.760 Beer of Economic Research has run a couple of papers 0:04:55.760 --> 0:04:59.599 recently with data which is really nice. It's really good 0:04:59.600 --> 0:05:04.320 news that Americans are living longer a but also be 0:05:04.520 --> 0:05:08.800 healthier lives. So it's not only that you're you're alive 0:05:08.880 --> 0:05:13.440 at say seventy, but you you can still work. So 0:05:14.480 --> 0:05:16.359 the headline ahead on the article at one point was 0:05:16.400 --> 0:05:19.080 admitted you could keep working at seventy. You know, if 0:05:19.120 --> 0:05:22.880 you can golf eighteen holes under the broiling hot sun, 0:05:24.240 --> 0:05:28.520 presumably you can sit for eight hours at a desk. 0:05:30.000 --> 0:05:32.640 And you get into this in your article. But has 0:05:32.720 --> 0:05:37.400 the system around which this whole concept of retirement and 0:05:37.520 --> 0:05:40.560 social security and all the infrastructure that's been built up 0:05:40.600 --> 0:05:43.760 around it, has it caught up with this ability to 0:05:43.800 --> 0:05:47.599 work well past seventy that you're describing. Well, the move, 0:05:48.120 --> 0:05:52.279 the gradual, incremental move from to sixty seven was a 0:05:52.320 --> 0:05:55.560 step in that direction, but the people are saying we 0:05:55.600 --> 0:05:59.680 can go past that. You could go to seventy or something. Now, 0:05:59.720 --> 0:06:02.440 this art's getting into some sticky stuff, which is like 0:06:03.600 --> 0:06:06.960 if you have a job, you know, doing podcasts on 0:06:07.000 --> 0:06:10.920 the radio, then it's really not physically strenuous work except 0:06:10.920 --> 0:06:14.119 for maybe your vocal cords, and so you could work 0:06:14.320 --> 0:06:17.400 easily to seventy. But if you have a job digging 0:06:17.440 --> 0:06:21.279 ditches or working on an assembly line, or changing beds 0:06:21.279 --> 0:06:25.000 in a hotel, or waiting tables or flipping burgers, there 0:06:25.000 --> 0:06:28.479 are a lot of jobs that are physically demanding, and 0:06:29.440 --> 0:06:32.640 uh they also tend to be the lower paying jobs. 0:06:33.560 --> 0:06:39.640 I mean NFL and NBA being exceptions. So the very 0:06:39.760 --> 0:06:44.200 people who are getting less money for their work are 0:06:44.279 --> 0:06:47.400 also in jobs that are harder to do at older ages, 0:06:47.440 --> 0:06:52.200 so they have less desirable work and um, for them, 0:06:52.240 --> 0:06:56.000 going to seventy truly would be a hardship. So we 0:06:56.080 --> 0:06:59.920 really haven't figured out a way to deal with taking 0:07:00.000 --> 0:07:02.960 advantage of the greater health and longevity for the most 0:07:03.000 --> 0:07:09.200 of the population for fixing source securities finances without imposing 0:07:09.360 --> 0:07:14.240 undue burden on the low income generally low income segment 0:07:14.280 --> 0:07:16.800 of population. And as you mentioned your piece, the way 0:07:16.840 --> 0:07:19.360 social security works is it's not kind of I mean, 0:07:19.400 --> 0:07:21.960 I'm sorry, it is black and white. Either you are 0:07:22.120 --> 0:07:24.680 not working or you are. There's no kind of there's 0:07:24.680 --> 0:07:27.360 no gradient to it, and right, and the disability system 0:07:27.480 --> 0:07:30.760 works the same way because the disability income is a 0:07:30.800 --> 0:07:34.400 component of social security. You don't have to you can 0:07:34.440 --> 0:07:37.560 get at any age. But it's just like that, you 0:07:37.600 --> 0:07:41.880 have a whole determination about whether you are well enough 0:07:41.920 --> 0:07:44.640 to work, and if you are, you don't get the benefit. 0:07:45.440 --> 0:07:48.680 The benefit is a percent or zero. And so it's 0:07:48.800 --> 0:07:51.360 really a cliff effect. Because it's a cliff effect, it 0:07:51.440 --> 0:07:57.280 tends to cause a lot of debate, you know, and 0:07:57.280 --> 0:08:02.120 and argumentation. It's to strenuous for both sides, both the 0:08:02.200 --> 0:08:08.320 applicant and the government. And so how would you there's 0:08:08.360 --> 0:08:10.680 no One of the ideas I had was okay, well 0:08:10.760 --> 0:08:14.480 there should be a way where okay, if you, if 0:08:14.520 --> 0:08:16.920 you if you are one of these people who has 0:08:16.920 --> 0:08:20.360 a physically strenuous job, then we'll keep we'll have the 0:08:20.400 --> 0:08:24.640 retirement age at seventy, but you can just apply for disability. 0:08:24.720 --> 0:08:26.560 And the problem is that just turns out to be 0:08:26.600 --> 0:08:29.280 a huge administrative headache. Is no way he wants to 0:08:29.280 --> 0:08:32.880 go through that. In addition to the ability to work 0:08:32.920 --> 0:08:36.760 for longer. Don't people have to work for longer now 0:08:37.559 --> 0:08:41.520 because they're going to be around for a greater period 0:08:41.559 --> 0:08:44.679 of time, they need to maintain their house. Then when 0:08:44.679 --> 0:08:47.360 it gives some money to their grandchildren. They want to 0:08:47.360 --> 0:08:49.560 do all these things I make. People need the money. 0:08:49.600 --> 0:08:53.760 It's not just about being physically or intellectually able to 0:08:53.760 --> 0:08:57.240 do it. There's a necessity, there isn't there. So think 0:08:57.280 --> 0:08:59.760 about that. We're gonna get you on that in a second. 0:08:59.760 --> 0:09:02.720 But first I have a question might reflect the fact 0:09:02.760 --> 0:09:05.520 I was born outside the United States. People here this 0:09:05.679 --> 0:09:09.320 term the third rail. Social Security is the third rail, 0:09:09.440 --> 0:09:13.080 But help me out what is the first and what 0:09:13.240 --> 0:09:17.320 is the second? So this is a subway analogy. Actually, Um, 0:09:17.440 --> 0:09:19.120 so you know you're standing on the subway platform. You 0:09:19.120 --> 0:09:21.760 look down, you see three rails. The first two are 0:09:21.800 --> 0:09:25.360 what the car actually runs on, and then the third rail. 0:09:25.400 --> 0:09:26.920 And if you look closely, the third rail is actually 0:09:27.000 --> 0:09:28.760 much thicker. It's kind of like it almost looks like 0:09:28.760 --> 0:09:32.240 it's like a box, long box, and it actually encases 0:09:32.280 --> 0:09:36.160 all of the electricity that uses to run the subway line. 0:09:36.320 --> 0:09:37.800 So the idea is that if you touch it, you'll 0:09:37.920 --> 0:09:41.640 like just like instantly die. It's horrible. And then and 0:09:41.679 --> 0:09:43.680 everyone says, like if you hapen to fall in the 0:09:43.720 --> 0:09:46.640 subway or something like that, like something atrocious, you should 0:09:46.679 --> 0:09:48.880 never like go to the wall of the subway. You 0:09:48.880 --> 0:09:50.760 should try to get in the middle of the tracks, 0:09:50.760 --> 0:09:52.959 because if you touch the third rail, no matter what, 0:09:53.080 --> 0:09:57.959 you will die. And an analogy invented just for social security, 0:09:58.000 --> 0:10:00.000 I think people use it for all, like like really 0:10:00.160 --> 0:10:04.040 hot button political things, you know, like if you touch it, 0:10:04.120 --> 0:10:06.080 you're like, your dad is a politician. If you're like, 0:10:06.120 --> 0:10:08.200 you know, a Republican and you want to start talking 0:10:08.240 --> 0:10:11.160 about I don't know, some sort of like progressive social 0:10:11.160 --> 0:10:14.720 thing third rail, right, Like, you touch it, your dad? Okay, 0:10:15.400 --> 0:10:17.959 that's helpful, you know, Peter. We hear a lot about 0:10:18.000 --> 0:10:21.880 people having to go back to work after they've retired 0:10:21.960 --> 0:10:25.480 because they've realized not only are they healthy, they didn't 0:10:25.520 --> 0:10:28.880 put away enough. Now we've all heard these stories, the 0:10:28.920 --> 0:10:32.040 burg of Flipper and so on. How does that feed 0:10:32.360 --> 0:10:35.160 in to the guts of your story in bloom Book 0:10:35.160 --> 0:10:39.679 Business Week. Well, first of all, you don't have to 0:10:39.720 --> 0:10:43.679 retire at any age, and people are free to work 0:10:43.800 --> 0:10:46.480 till past a hundred if they want to. What we're 0:10:46.480 --> 0:10:49.400 talking about here is mostly what's the normal retirement age, 0:10:49.800 --> 0:10:53.520 which is the son of the sweet spot for your benefits, 0:10:53.840 --> 0:10:57.959 And it turns out lots of people take this normal 0:10:58.000 --> 0:11:01.800 retirement age is almost like the spected retirement. So if 0:11:01.840 --> 0:11:04.600 you just look at the peaks and troughs of when 0:11:04.640 --> 0:11:07.440 people retire, there's a big jump at sixty two, which 0:11:07.480 --> 0:11:10.520 is the earliest you can get social security, and that 0:11:10.559 --> 0:11:13.199 hasn't changed, by the way, when the normal went from 0:11:14.160 --> 0:11:16.760 and then you get another one whatever the normal retirement ages. 0:11:17.720 --> 0:11:21.560 And so there's little bit of a social expectations component 0:11:21.640 --> 0:11:25.160 to this. The government is kind of molding people's behavior 0:11:25.320 --> 0:11:28.280 just by what it sets for its these numbers. But 0:11:28.320 --> 0:11:30.720 don't you think of like sixty two and then sixty 0:11:30.760 --> 0:11:32.680 five as well as these is kind of like mental 0:11:32.760 --> 0:11:35.040 finish lines, and especially for you know, these jobs that 0:11:35.080 --> 0:11:38.160 we're talking about, the you know, the grocery bagger, the 0:11:38.360 --> 0:11:40.440 burger flipper. I mean, if you're doing a job like that, 0:11:40.480 --> 0:11:43.920 you have to have a finish line. You probably did, 0:11:43.960 --> 0:11:45.600 you see what I'm saying that to take away that 0:11:45.600 --> 0:11:49.400 finished line, I'm sure would be difficult to move the 0:11:49.440 --> 0:11:51.959 finish line exactly when you're in the race. When you're 0:11:51.960 --> 0:11:55.720 already in the race. Why they didn't move up the 0:11:55.880 --> 0:11:58.440 sixty two. It kept a sixty to do where it 0:11:58.520 --> 0:12:01.320 was for all those people who just you know, we're 0:12:01.360 --> 0:12:03.640 just dying and dying to get to when they as 0:12:03.679 --> 0:12:07.360 soon as they can get a sort of security check. Interesting. Yeah, 0:12:07.600 --> 0:12:11.760 so why doesn't Congress just go ahead and mandate a 0:12:11.800 --> 0:12:16.720 new retirement age of seventy and simultaneously make it easier 0:12:16.760 --> 0:12:21.480 for people who have physically demanding jobs to go on 0:12:21.600 --> 0:12:25.760 disability at say sixty five. Why don't they just do that? Well, 0:12:25.840 --> 0:12:28.280 it is a possibility. As I said before, one of 0:12:28.320 --> 0:12:31.760 the problems is just the sheer administrative headache of trying 0:12:31.760 --> 0:12:34.400 to figure al who's disabled and who's not. That would 0:12:34.440 --> 0:12:37.160 be to be it would just flood the system. But 0:12:37.240 --> 0:12:40.760 they could readefine it right, you had a physically demanding job, right, 0:12:40.880 --> 0:12:43.000 So then it would be by career, which is yet 0:12:43.040 --> 0:12:46.720 another idea. And that's not easy either, because you can 0:12:46.760 --> 0:12:49.280 imagine the Gamesman chip of everybody trying to say, oh, 0:12:49.400 --> 0:12:53.240 my job is physically demanding, I want that included. And 0:12:53.440 --> 0:12:57.240 so the Greeks had have no lary elaborate system of 0:12:57.960 --> 0:13:02.400 uh wait a second, where emulating the Greek economia, Well, 0:13:02.440 --> 0:13:07.920 that's that's yours. They're over like five hundred job titles 0:13:07.960 --> 0:13:13.920 in Greece that were labeled owners or physically demanding, including 0:13:13.920 --> 0:13:17.920 like hairdressers, and radio technicians and so on. That's nothing 0:13:17.920 --> 0:13:22.280 about the radio technicians, but I'm just saying, and the 0:13:22.280 --> 0:13:27.720 people retire at age fifty. That got a little bit ridiculous. Okay, 0:13:27.800 --> 0:13:31.920 So we've got Greek hair dresses and the Iron Chancellor 0:13:33.480 --> 0:13:36.680 all helping shape just debate on social security for time 0:13:36.880 --> 0:13:41.600 in the US. Yeah, it's bizarre. And like you said, 0:13:41.640 --> 0:13:43.640 it really is the third rail though, because like as 0:13:43.640 --> 0:13:46.720 a politician, and we talked about like the the mental 0:13:47.160 --> 0:13:48.840 idea of a finish line. If you're in one of 0:13:48.880 --> 0:13:52.120 these jobs, I mean, you're not going to get voted 0:13:52.160 --> 0:13:54.200 in again. If you want to tell people actually you're 0:13:54.240 --> 0:13:56.720 going to work another eight years, you have to. Okay, 0:13:56.760 --> 0:13:59.680 you were saying before that you you you're younger, you 0:13:59.720 --> 0:14:02.680 didn't actually expect so security to be there for you 0:14:02.720 --> 0:14:04.560 when you retire. I don't. I don't know if that 0:14:04.600 --> 0:14:08.200 makes me sound like a huge, huge cynic though, Um no, 0:14:08.400 --> 0:14:09.640 I don't. I mean, and I think a lot of 0:14:09.640 --> 0:14:11.760 people in my age don't as well, which is why people, 0:14:12.160 --> 0:14:13.839 you know, we really take our four oh n K 0:14:14.040 --> 0:14:16.880 seriously and you know, trying to contribute as much as 0:14:16.920 --> 0:14:18.640 you can do that because you don't expect there to 0:14:18.720 --> 0:14:22.400 be this kind of little safety net for you when 0:14:22.400 --> 0:14:25.320 you get there. So for your generation, it's not really 0:14:25.360 --> 0:14:28.080 the third royle, I guess not. I think like for me, 0:14:28.200 --> 0:14:30.640 if I heard a politician saying that they want to 0:14:30.760 --> 0:14:33.440 change the retirement age for someone who is my age, 0:14:33.880 --> 0:14:36.120 it wouldn't make a difference to me. I think it 0:14:36.120 --> 0:14:38.120 would just kind of be in one year out the other, 0:14:38.160 --> 0:14:40.680 and then I listen to all their other platforms. But 0:14:40.800 --> 0:14:44.840 if they want to tell someone who's fifty five, actually, 0:14:44.840 --> 0:14:47.040 instead of working for another seven years, let's assume they 0:14:47.040 --> 0:14:49.160 were retiring at sixty two, No, you have to work 0:14:49.200 --> 0:14:52.080 for another fifteen years. That's I don't know. That just 0:14:52.080 --> 0:14:55.640 seems unfair for just to make it simple, that would 0:14:55.680 --> 0:14:57.920 be difficult to stomach. I would imagine if I were 0:14:57.960 --> 0:14:59.760 fifty five years old and someone was telling me you 0:14:59.800 --> 0:15:02.080 have to actually work double what you thought you had, Right, 0:15:02.880 --> 0:15:05.760 you know, there's no shortage of elected officials who will 0:15:05.800 --> 0:15:09.760 tell us that at some point quote entitlements unquote have 0:15:09.920 --> 0:15:15.480 to be quote reformed unquote, and social securities generally the 0:15:15.520 --> 0:15:18.560 main thing they're talking about there. But does it have 0:15:18.800 --> 0:15:22.120 to be well? Has something has to happen? Even the 0:15:22.240 --> 0:15:26.119 kind of the liberal interest groups that are rigorously defending 0:15:26.160 --> 0:15:30.640 social security and that are mistrustful of raising retirement age 0:15:30.640 --> 0:15:33.360 because they see it correctly as a benefit cut, do 0:15:33.520 --> 0:15:36.760 think something needs to be done. And the usual debate 0:15:36.840 --> 0:15:40.440 is how much of the change should occur in the 0:15:41.120 --> 0:15:46.480 cutting benefits versus increasing revenue. And if you do increase revenue, 0:15:46.560 --> 0:15:48.960 should it be entirely from within the system, i e. 0:15:49.120 --> 0:15:52.880 From people's wages or could you draw on a bigger 0:15:53.000 --> 0:15:55.880 pool of money? And there are many options you can 0:15:55.880 --> 0:16:00.680 think of their you know, transactions, financial transaction tax or 0:16:00.760 --> 0:16:04.760 capital gains tax or something like that to to kind 0:16:04.760 --> 0:16:06.760 of get the bigger pot of money that's out there 0:16:06.760 --> 0:16:09.720 in the economy. Interesting, So what's the next chapter in 0:16:09.760 --> 0:16:13.640 this story? I think that we're coming up on. I 0:16:13.640 --> 0:16:16.480 think every year that tweaks a little bit. But the 0:16:16.480 --> 0:16:20.680 the trust fund is going to run out in twenty 0:16:20.960 --> 0:16:25.440 thirty six or seven, and at that point the only 0:16:25.480 --> 0:16:29.840 money the system will have is the money that's coming in, 0:16:30.320 --> 0:16:35.000 which covers only about three quarters of benefits. And well 0:16:35.040 --> 0:16:37.440 before that they're gonna have to come up with another 0:16:37.480 --> 0:16:41.320 tweak to Social Security because there's no way we're gonna 0:16:41.320 --> 0:16:45.760 just like cut benefits by a quarter, So I think, 0:16:46.640 --> 0:16:49.480 who knows, maybe in the next presidential administration they're gonna 0:16:49.480 --> 0:16:52.440 have to start revisiting this. Is it possible to even 0:16:52.560 --> 0:16:55.520 live on Social Security like people? I can imagine it 0:16:55.560 --> 0:16:59.040 would be tough. Here in New York City people do Dan. 0:16:59.400 --> 0:17:02.080 It's it's a musing how many I wish I had 0:17:02.080 --> 0:17:05.400 the percentages of my fingertips. But as a substantial percentage 0:17:05.440 --> 0:17:10.800 of Americans who have no pension, private pension and no 0:17:11.160 --> 0:17:15.920 retirement savings and social Security is there primary means of 0:17:16.000 --> 0:17:19.040 support and they are able to live a decent life 0:17:19.040 --> 0:17:24.320 on that, you know, a penurious life. Interesting. I mean 0:17:24.359 --> 0:17:26.360 one thing I also find interesting about you know, if 0:17:26.359 --> 0:17:28.840 you want to talk about changing retirement benefits, as you 0:17:28.880 --> 0:17:32.400 look at state and city pension systems, you know, their 0:17:32.400 --> 0:17:34.640 public pension systems, you know, kind of a local version 0:17:34.640 --> 0:17:36.600 of Social Security, if you will. And you've seen a 0:17:36.600 --> 0:17:41.480 few court rulings that actually really benefit retirees, um like 0:17:41.720 --> 0:17:45.879 more so than actually the law would necessarily UM agree with. 0:17:47.240 --> 0:17:50.520 Great example is Detroit um in that bankruptcy settlement, those 0:17:50.560 --> 0:17:54.040 pensioners got about eighty seven cents on the dollar. Well, 0:17:54.119 --> 0:17:58.199 you saw some bondholders who were legally above pensions like 0:17:58.280 --> 0:18:01.320 they were, there was no question about it. I mean, 0:18:01.359 --> 0:18:04.760 some walked away with nothing right. I think that reflects 0:18:04.960 --> 0:18:09.440 the public's perception that it's really hard to just leave 0:18:09.520 --> 0:18:12.240 people in the lurch. But I also think it reflects 0:18:12.280 --> 0:18:18.320 a complete inability to predict what can happen with benefits 0:18:18.400 --> 0:18:20.400 and when it's really you know, someone's life in the line. 0:18:20.520 --> 0:18:22.840 You know what you're talking like, can you really survive 0:18:22.960 --> 0:18:26.440 on what's currently Social Security is? And I think to me, anyway, 0:18:26.440 --> 0:18:29.159 when I'm looking at social Security, seeing rulings like in 0:18:29.200 --> 0:18:33.359 Detroit really make you realize that it's impossible to predict 0:18:33.400 --> 0:18:35.120 what you can do because even if you know every 0:18:35.200 --> 0:18:39.560 law about this, who's to say, you know, emotions won't prevail. 0:18:41.359 --> 0:18:45.359 You know, a lot of people talk about working longer 0:18:45.440 --> 0:18:48.679 because they need the money to retire. And then and 0:18:48.720 --> 0:18:50.959 they do surveys, so they ask people every year do 0:18:51.000 --> 0:18:53.600 you expect to retire with the next year, and the 0:18:53.640 --> 0:18:55.840 answer we no, no, no, And then one year to 0:18:55.920 --> 0:18:57.480 say do you expect to retire the next year and 0:18:57.480 --> 0:19:02.080 they say, oh, I already retire last year. It happens 0:19:02.520 --> 0:19:05.960 amazingly abruptly for a lot of people. A spouse gets sick, 0:19:06.200 --> 0:19:09.000 you get sick, change at work, and suddenly you're out 0:19:09.000 --> 0:19:10.679 of the You're out of the workforce. Okay, so then 0:19:10.720 --> 0:19:12.399 let me ask you the obvious question. You guys are 0:19:12.400 --> 0:19:14.080 a little bit older than I am, when do you 0:19:14.080 --> 0:19:18.760 guys plan on retiring? Well, I have a five month 0:19:18.840 --> 0:19:24.680 old daughter in addition to a teenage son, so I'm yeah, 0:19:24.840 --> 0:19:27.920 never is a pretty good estimate. Great, sorry to hear that, 0:19:28.240 --> 0:19:30.480 But don't you well, I shouldn't say this because I 0:19:30.560 --> 0:19:33.240 just finished saying that you shouldn't allow, you know, random 0:19:33.320 --> 0:19:35.800 numbers picked out of the government to determine your thinking. 0:19:35.840 --> 0:19:39.800 But six or six and a half says the economist 0:19:41.040 --> 0:19:45.800 will come record an episode at your beach house, Peter. So, 0:19:46.000 --> 0:19:52.120 in all seriousness, thanks for joining us. Thank you. Benchmark 0:19:52.160 --> 0:19:54.199 will be back next week and until then, you can 0:19:54.240 --> 0:19:57.720 find us on the Bloomberg terminal and Bloomberg dot com, 0:19:57.760 --> 0:20:01.080 as well as iTunes and Stitcher. While you're there, take 0:20:01.119 --> 0:20:03.840 a minute to rate and review the show so more 0:20:03.920 --> 0:20:06.159 listeners can find us and let us know what you 0:20:06.240 --> 0:20:08.159 thought of the show. You can talk to Dan and 0:20:08.200 --> 0:20:10.840 I on Twitter. You can find Dannet at Daniel Mass 0:20:11.000 --> 0:20:13.200 d C and you can find me at by Keith Smith. 0:20:13.680 --> 0:20:16.640 And our guest Peter is on Twitter at Peter Coy, 0:20:16.800 --> 0:20:19.520 and don't forget to check out the article he's written 0:20:19.560 --> 0:20:21.200 about this. We'll see you next week.