Saturday, February 18, 2006

Retire at 85 to Get Full Social Security Check

The age of retirement should be raised to 85 by 2050 because of trends in life expectancy, a US biologist has said.

Shripad Tuljapurkar of Stanford University says anti-ageing advances could raise life expectancy by a year each year over the next two decades.

Drudge headlines this storywhich would be a bunch more life changing than global warming. In an earlier post I suggested that there are many things that we might fear in the future of this planet, and that your politics may be responsible for the specific fears you choose. The fear of everyone in developed countries living to 100 on average might be a fear Republicans and Democrats could share.

Personally, I plan to retire at about 85, should the Lord tarry until I reach that ripe old age. My grandfather retired at about 88, so its not too far fetched. However, a bunch of my 50 something friends are already retiring, and if they all live to be 100, the economy will go bust for sure.

Now, along with this potential crisis, we also have the wealth transfer effect. The current crop of old folks (the great generation) will be transferring unheard of wealth to the baby boomers. Theoretically, the baby boomers will be transferring another huge mountain of assets to the busters in 20 years. Of course, if the boomers don't die, the busters will get the short end of the stick...again.

Now, for those of you who like to ponder such things, try to imagine what our world will operate if the average age of the population is 55 and there is tons of wealth, but a very small population of workers. We can get a peak at such a situation by looking to Europe and Japan, but it is the magnitude of the "problem" will be far greater if these predictions come true.

Bird flu? Short term problem. Energy prices? Foregetaboutit. Islamifacists? Could be a real concern. Don't discount the potential for great upheaval from this. Especially when combined with the aging of Western Culture and the wealth transfer. Global warming? Talk to me when we have actual increases in warm weather with only bad effects and no good things. An extra month of Spring in Chicago might be a good trade of for more a slight increase in sea levels. (Disclaimer. I live in LA, but I live on a hill.) So pick your calamity. I still say barbarians trying to destroy developed cultures is historically likely. The wealth transfer and aging of America are absolutely going to happen.

Wealth Transfer
Aging of America
Populations trends
Economic Trends
Social Security
Fear Factors

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