Wednesday, April 13, 2011
More Pension Penciling
To solve the pension problem, make workers work longer: I've heard it before and I've passed judgment on the point, however briefly. But here's a point which (though it cannot be original with me) I have not seen in the debate so far. That is: consider retirement protection as a function of lifespan. The average American 65-year-old male can look forward to something north of 17 years of life. In 1940, by Social Security's own account, it was more 12.7 years. Translated into percentages, that means that a 1940 retiree was looking forward to a retirement equal to 16 percent of his working life. The comparable figure today would be 20 percent. So to have the same percentage of life in retirement, today's retiree should keep working until he is a bit over 68 1/2.