Retirement

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Professor Borges on reading

Jorge Luis Borges taught a course in English literature in 1966.  The lectures were recorded and transcribed (albeit not always accurately when it came to names which were rendered phonetically into Spanish) by some of his students.  The lectures have been translated from the Spanish and edited for clarity, but one can tell they were spoken and not written for publication. So far, I have only read a couple of them:  on Dickens and Robert Louis Stevenson.  Borges’ take on their lives and writings is unique to say the least and offers much room for new ideas.  It the kind of book where one can pick a lecture topic that is of interest and just read that section.

But it is Epilogue to the book that I want to post today.  It is not from a lecture, but an interview with him at the National Library in 1979.

I believe that the phrase “obligatory reading” is a contradiction in terms; reading should not be obligatory.  Should we ever speak of “obligatory pleasure”?  What for?  Pleasure is not obligatory, pleasure is something we seek.  Obligatory happiness!  We seek happiness as well.  For twenty years, I have been a professor of English Literature in the School of Philosophy and Letters at the University of Buenos Aires, and I have always advised by students:  If a book bores you, leave it; don’t read a book because it is famous, don’t read it because it is modern, don’t read a book because it is old.  If a book is tedious to you, leave it, even if that book is Paradise Lost -which is not tedious to me – or Don Quixote – which is also is not tedious to me.  But if a book is tedious to you, don’t read it; that book was not written for you.  Reading should be a form of happiness, so I would advise all possible readers of my last will and testament – which I do not plan to write – I would advise them to read a lot, and not to get intimidated by writers’ reputations, to continue to look for personal happiness, personal enjoyment.  It is the only way to read.

Great advice for a retired person maybe, but not really the St. John’s College approach.  I believe it is in the famous Saturday Review of Literature article on St. John’s from the early 1960s that the phrase, “at St. John’s readings include some of the most boring books written” or something like that.  But if I hadn’t had to read Galen or Kant, I believe my life would be less rich.  Not true for everyone, probably, but true for me.  Sometimes plowing though something boring is good discipline.  But when it comes to reading for pleasure, I agree with Professor Borges:  Read only what you enjoy.

Borges

The book is Professor Borges:  A Course on English Literature.  Edited by Martin Arias and Martin Hadis.  New Directions, 2013

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Playing with Medicare and Social Security

I retired recently from a white collar, management, high stress job at the age I have always expected to retire, 65.  I think I can say that my retirement was a cause of envy among many of my co-workers who are just as tired and stressed as I was but have many years before they can retire.  As I said to my former staff members at lunch the other day, you don’t realize how tired you are until you retire.  And even then it takes time to de-stress.  So I can imagine if I were working a job that was physically demanding (and maybe also stressful) and how it would make me feel if I knew I had to work until 67 or 70 to get any kind of benefits which is where many Republicans (and some Democrats) want us to end up.  I don’t think that some of the corporate CEO’s and elected officials understand this which is why this piece by Ezra Klein caught my eye.

I’ll be clear: Raising the Medicare eligibility age makes no sense. It cuts federal health-care spending but raises national health spending, which is what really matters. It doesn’t modernize the system or bend the cost curve. It doesn’t connect to any coherent theory of health reform, like increasing Medicare’s bargaining power, increasing competition in Medicare, ending fee-for-service medicine, or learning which treatments work and which don’t. I’m not opposed to cutting Medicare — quite the opposite, actually — but this is a particularly brain-dead way to do it.

Its importance in the negotiations is attributable to the fact that raising the age at which Americans can receive Medicare and Social Security has a weird, symbolic power in Washington. As House Minority Leader Nancy Pelosi puts it, the eligibility age is “a trophy” that Republicans can bring back to their base. Though the policy is deeply unpopular with voters, it’s quite popular among Republican elites.

Klein floats this idea

If it’s age increases that the political system wants, there’s a better way to do it. Ezekiel Emanuel, who advised the Obama administration on health care and now works with the Center for American Progress, calls it “graduated eligibility,” and it would link the age of eligibility with lifetime earnings:

Here’s how it would work. People in the bottom half of the lifetime earnings distribution would become eligible for normal retirement benefits at age 65 for Medicare and 66 for Social Security, just as they are today. But people in the next quarter of the lifetime earnings distribution would become eligible for the respective programs at 67 and 68, and those in the top quarter would become eligible at 70 and 71. All eligibility ages would increase over time, as they are scheduled to now.

This makes sense on a few different levels. For one thing, a favorite argument for raising the age at which benefits begin is that seniors live longer today than they did when these programs began. But those gains aren’t equal: Richer seniors live six years longer than poorer seniors, on average. “Graduated eligibility” accounts for that fact.

This does make a certain amount of sense, but I still worry about those who work physically demanding jobs like construction.  I’m not even sure about the scheduled age increases for full benefits.  Maybe we should lower ages at the bottom, leave the middle, and raise it even highter at the top.

I remembered that I heard somewhere that the average retirement age is 62 and went looking for confirmation.  I found this story in the Financial Advisor from April 2012.

More than one third of pre-retirees (35%) surveyed think they will never retire, an increase from 29% in the 2009 survey. Only one in 10 pre-retirees thinks they will retire before age 60. Half of pre-retirees say they will wait until at least age 65.

In reality, 31% of retirees quit work before age 55, 20% before age 60, and another 10% before age 62.

“There is a major disconnect between when people say they plan to retire and when they actually do,” the survey says. Some of it may be because of health problems or because they are downsized. “Many who lose jobs in their 50s and 60s experience more difficulty finding new employment,” the survey adds.

The survey was taken of 800 pre-retirees and 800 retirees, ages 40 to 80. It is the sixth survey of this type taken by the Society of Actuaries since 2001.

So there is also a disconnect between the proposals on age eligibility and what people so in real life.

I am worried that we are going to end up with a policy that has very bad unintended consequences.  I saw Nancy Pelosi in an interview a few nights ago when she said she hadn’t seen how raising the Medicare age was going to create savings.  She said, “Show me the money.”  I would go further and say, I don’t think that anyone has done the math and I can only hope that the President, Democrats in Congress and maybe some Republicans will do the math first.

Photograph:  Alex Wong

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Boomers and the job numbers

What does the retirement of the baby boom generation have to do with the job numbers you might ask.  I never thought of my retirement impacting the unemployment rate but reading Paul Krugman in the New York Times this morning, I realize that in a strange way I am helping the economy.  Yes, I’ve read all  the stories about how we didn’t save enough, how our homes (the big retirement plan for many) have lost value, how interest rates are hurting retirees, how the numbers are going to make Medicare and Social Security go broke and on and on.  But it never occurred to me that maybe the estimated 10.000 people a day who retire might actually be good for the economy.  Think about it.  Each person who retires has the potential to open up a job for someone else.  The bottom line is there is still work that needs to be done and at some point someone will be hired to do it.

 

AARP Social Security for Dummies Book Jacket

 

Krugman writes

 …the methods the bureau uses are public — and anyone familiar with the data understands that they are “noisy,” that especially good (or bad) months will be reported now and then as a simple consequence of statistical randomness. And that in turn means that you shouldn’t put much weight on any one month’s report.

In that case, however, what is the somewhat longer-term trend? Is the U.S. employment picture getting better? Yes, it is.

Some background: the monthly employment report is based on two surveys. One asks a random sample of employers how many people are on their payroll. The other asks a random sample of households whether their members are working or looking for work. And if you look at the trend over the past year or so, both surveys suggest a labor market that is gradually on the mend, with job creation consistently exceeding growth in the working-age population.

On the employer side, the current numbers say that over the past year the economy added 150,000 jobs a month, and revisions will probably push that number up significantly. That’s well above the 90,000 or so added jobs per month that we need to keep up with population. (This number used to be higher, but underlying work force growth has dropped off sharply now that many baby boomers are reaching retirement age.)

Meanwhile, the household survey produces estimates of both the number of Americans employed and the number unemployed, defined as people who are seeking work but don’t currently have a job. The eye-popping number from Friday’s report was a sudden drop in the unemployment rate to 7.8 percent from 8.1 percent, but as I said, you shouldn’t put too much emphasis on one month’s number. The more important point is that unemployment has been on a sustained downward trend.

But isn’t that just because people have given up looking for work, and hence no longer count as unemployed? Actually, no. It’s true that the employment-population ratio — the percentage of adults with jobs — has been more or less flat for the past year. But remember those aging baby boomers: the fraction of American adults who are in their prime working years is falling fast. Once you take the effects of an aging population into account, the numbers show a substantial improvement in the employment picture since the summer of 2011.

unemployment

unemployment (Photo credit: Sean MacEntee)

 

So the job growth and unemployment figures are slowly improving.  The overall trend is up for growth and down for unemployment.  I think one of the most shocking reactions to the numbers was the notion that they were somehow being manipulated and the things were actually much worse.  Do some like Jack Welsh actually want things to either get worse or at least to stay bad?  They just can’t bring themselves to admit that President Obama may be succeeding – despite Congress and the Republicans and turning things around.  Do they really need to win that badly?

Krugman says it better

…The U.S. economy is still far short of where it should be, and the job market has a long way to go before it makes up the ground lost in the Great Recession. But the employment data do suggest an economy that is slowly healing, an economy in which declining consumer debt burdens and a housing revival have finally put us on the road back to full employment.

And that’s the truth that the right can’t handle. The furor over Friday’s report revealed a political movement that is rooting for American failure, so obsessed with taking down Mr. Obama that good news for the nation’s long-suffering workers drives its members into a blind rage. It also revealed a movement that lives in an intellectual bubble, dealing with uncomfortable reality — whether that reality involves polls or economic data — not just by denying the facts, but by spinning wild conspiracy theories.

It is, quite simply, frightening to think that a movement this deranged wields so much political power.