Archive for November, 2010|Monthly archive page

Ramblings – On Retirement Ages Eventually.

I have a myriad of things running through my mind at the moment, and I haven’t really been updating the blog lately.  It’s been even worse on my more personal one, I don’t think I’ve put anything meaningful there in a very long time, and that’s kind of sad in a way – I’ve had that blog since before the word existed, back when LiveJournal was a referral service and someone had to give you an invite for you to join.

But being busy with other things is good, of course.  Work continues to be getting better and better, and it appears that for many reasons I’ve made a decent move.  I’m still not totally settled on things though, and I think my wife is homesick for Ontario more than she really admits, but is willing to concede that she has to give this a more thorough attempt.

Lots has been going on politically lately on both sides of the border, and I find it hard to nail down anything really sharp to say on a lot of it – in Canada, we have the renewed discussion of what the hell we are going to do in Afghanistan next year when the Parliamentary mandate for our current contribution to ISAF ends and in theory we are done.  As of my last check, the PM has decided that we’ll stay there in a training role, it sounds like in Kabul (vice the rather more dangerous Kandahar), with about 1000 troops on the ground.  I suspect that many of them will continue to be drawn from the Reserve, and have not given up on the idea of getting a tour in, though it’s hard to say what’ll happen.

This was sort of a dovetail from a major debate about Veterans Affairs, which started when the current ombudsman, Col Pat Stogran (ret’d) got into the spotlight for his vigourous criticism of the government’s handling of the claims of veterans, particularly those injured in Afghanistan, but also those with injuries, including invisible ones like PTSD, from previous operations.  Apparently it’s Bosnia veterans that report the highest rates of debilitating PTSD.

I don’t have a fully formed opinion on that whole thing, though I understand fully the frustration many feel because I’m a VAC client myself – well, I’m trying.  I was injured during my basic officer training years ago, I probably broke my foot but didn’t know it because I received rather lacklustre treatment, and no follow-up when I was sent home from the course, this is a common problem Reserve soldiers face that is starting to get addressed.  While I’m not so badly off, I do have a lot of pain from time to time walking, and I need special orthotics to be able to do my job.  My civilian job’s benefits currently pay for them, but I’d rather VAC do it.  I’m not really bothered about getting a lump sum payout (though it would go toward my house fund), I just want to make sure that if it gets worse as I get older, I have something to prove that it was due to service.

It took forever to apply, forever to get my first answer (no), and now I’ve been just to busy to jump through the hoops that the Bureau Of Pension Advocates wants me to endure.  We’ll see how it goes.

So we went to Boston a couple of weeks ago on our first real “vacation” in a long time – in fact, it was sort of our honeymoon for our fifth anniversary, just a long weekend, but it was neat to be there in the run up to the elections and all – we actually came home the day of, listening to the results come in on XM.  It is a little different seeing how things work in the US compared to here – one thing that really struck me was that it was hard to size up opinions from signs not knowing the actual candidates, since it seems that American candidates don’t always put their party on their signage, or in any way use colours etc that ID them.  Not so here, where signs are generally standardized and it’s pretty clear who’s who.

In the end, I guess the results didn’t surprise me.  I was happy to see that most of the crazy teabaggers got smited, though Rand Paul getting into the Senate was just a bit shocking, I have a feeling those Tea Party morons are going to regret sending him there.  Seriously, that guy has some ridiculous ideas and opinions, truly baffling that he was electable.

Losing the House was no shock, the Democratic Party has amazed me with its inability to put its majority to work and just get things done.   Particularly in the face of the idiocy spewed out by the Republicans.  I don’t get how people fall for their bullshit.  I read their “Pledge” which was mostly fluffy empty rhetoric and nonsense aimed at people who don’t really know much about politics.  The tax cuts thing is the most galling.  There is no reason to believe that a tax cut for the most wealthy will do anything to stimulate the US economy, and more ridiculously, the people calling for it keep calling themselves fiscally responsible.  Adding $700 billion to the US deficit is just not fiscally responsible, it smacks of the highest forms of hypocrisy, which seems to be their theme anyhow.  How does the GOP plan to balance the budget?  What will they cut, specifically?  They have no idea, no plan.  When you highlight to them that a staggering cut to the military they understandable go ballistic at the idea.

The silly thing is that the things that are reasonable to discuss are now being rejected by both sides – things like discussions of retirement ages and entitlements.  Given my personal background I have some insight on this, and that’s what I think I’ll focus on here.

One of the things put out as an idea in the United States was reforming Social Security by raising the retirement age.  You’ll likely know that France was recently gripped by protests and strikes over a plan to raise its state retirement age from 60 to 62, a move expected to save the French social security significantly.  To me, 62 seems still very generous, but anyone familiar with France’s generous welfare state will tell you that it’s still a big change.

As one of my colleagues likes to highlight to people when doing retirement planning presentations, the conventional retirement age of 65 was chosen for a reason.  The reason is simple: Life expectancy was (depending on which study of which country you look at) about 59 (or 63, I’ve also heard quoted).  That means that there was a pretty good chance that you’d never actually qualify to retire, you’d work until you died, and social security systems were in place to look after the lucky folk who actually lived longer.

The reality is that when you look at demographic trends and how long people live, it’s not reasonable to have a state pension fund a retirement that is in some cases nearly as long as one’s working life.  Even well managed ones (like the Canada Pension Plan) won’t be stable for long under such a setup.  Even now, more and more people are working longer, or phasing retirement by working less and less, but still working in some capacity.  In the case of many retirees I work with it’s out of boredom as much as anything else, a need to keep doing something.

We need to change the way we think about working and retiring, and about older workers if this is the approach we’re going to take, though.  In Canada the current approach is to stiffen the penalty for drawing one’s pension early.  Currently you can draw CPP at age 60 but you get penalized 0.5% per month for every month early you draw it – that’s going to increase to 0.6%, meaning that you will only get 64% of your entitlement vice 70% if you start at age 60.  They’re also increasing the premium one gets for delaying drawing a pension, which they hope will persuade people still working to wait a couple of years in exchange for a larger annuity.  That could work and should be helpful.  I have to wonder how such changes might impact Social Security in the USA…

This is kind of discussion that has to be had, though, because pensions are a ticking timebomb potentially, as boomers retire, and there simply aren’t as many workers coming in behind them – and well – there’s not as many growing up either… but that’s something for another entry.  The key is, it’s going to take createive ideas and not political dogma to get things going again, and that will take a lot of dialogue that we all need to be involved in.