Latest news with #OldAge
Forbes
3 days ago
- Business
- Forbes
A Birthday Gift For Social Security: Action Now to Protect Benefits
Happy birthday, Social Security! President Franklin D. Roosevelt signed the Social Security Act into law on August 14, 1935, establishing a program that would grow over 90 years to become the foundation of retirement security in the United States. As we celebrate the remarkable accomplishments of Social Security during this anniversary month, it's also important to keep an eye toward the future. Social Security currently faces a financing gap. As a result of factors that were anticipated (declining birthrates, longer lives) and unanticipated (the significant growth in high-income earners), Social Security currently pays out more in benefits than it collects in contributions each year. This financing gap also was anticipated, so the Old Age and Survivors Insurance (OASI) trust fund was established to collect surplus revenues in earlier years (following the 1983 reforms) to cover the financing gap when it occurred. So far the OASI trust fund has enabled Social Security to continue paying full, scheduled benefits for 42 years following those reforms, but the surplus revenues in the trust fund are being depleted. The most recent estimates by the Office of the Chief Actuary at the Social Security Administration predict that the trust fund will be completely exhausted in late 2032 - only about seven years from now. It's important to acknowledge that if this occurs, Social Security will not go bankrupt and will continue to collect contributions and pay benefits. However, if the trust fund is exhausted without action by Congress, then there would be across-the-board benefit cuts of 19 percent or more to bring benefits in line with ongoing contributions. And those benefit cuts would impact all current and future Social Security beneficiaries. Social Security has faced similar funding challenges in the past that were addressed. For example, in 1983 Congress amended Social Security to address a financing challenge at that time by setting revenue targets that would be viable for a much longer timeframe than past reforms had been, as well as pushing back the full retirement age for younger workers. That effort will have led to Social Security being reliable for almost fifty years without interruption (from 1983-2032). But addressing future challenges will only get more difficult if we continue kicking the can down the road about the coming financing gap. Five decades of steady and reliable contributions and benefit payments have resulted in highly favorable views of Social Security among the American people. Polling has consistently found that most Americans believe Social Security is an important, if not the most important, government program. More recent polling found that 83 percent of current beneficiaries believe their Social Security benefits are very important, while only one percent said they were not important at all. These highly favorable views aren't surprising given that Social Security is widely considered the most effective anti-poverty program in the U.S., enabling workers to be self-sufficient in retirement and preventing them from falling into poverty in their golden years. Another critical aspect of Social Security is that it provides annual cost-of-living adjustments to help older Americans keep up with inflation. Also, Social Security becomes increasingly important and a larger portion of their total income for retirees as they age and deplete other sources of retirement income, like their 401(k) savings. While Social Security's importance is undeniable, the benefit levels are somewhat modest for most retirees. The average monthly benefit payment is $2,007, which totals about $24,00 annually. As we celebrate the 90th anniversary of the Social Security Act, these achievements are worth honoring. But this milestone is also a time to look ahead and ensure that a lifetime of work continues to mean a retirement with dignity. Americans want to uphold this promise: polling shows that, across political affiliation, gender, and age, the public overwhelmingly wants Congress to address the Social Security financing gap sooner rather than later -- and they're even willing to contribute more to prevent benefit cuts. Closing this gap is entirely within reach, but it demands the will and action of Congress. The best birthday gift we could give Social Security would be legislation that secures another 90 years of success.
Winnipeg Free Press
06-08-2025
- General
- Winnipeg Free Press
Ageism keeps rearing its ugly head
Opinion I recently read a death notice for a man I did not know, but whose obituary caught my eye because he'd lived in the same retirement home as my mother. I was particularly surprised to learn that he had been a classical violinist. But why should I have been surprised? Because he wasn't in the lobby playing a heartbreaking Mendelssohn concerto whenever I popped by for a visit? Pam Frampton Ads featuring confident older women, like this one in Lecce, Italy, with the message 'Because you're unique' — are too few and far between. Or because I had fallen prey to the same ageism stereotypes that I rail against when I see them perpetuated against my mother? Did it not occur to me that all the people who live in this particular home had vibrant pasts, interesting and challenging careers, enduring passions and skills, intrinsic value? I did some soul-searching after that. Ageism is rampant in our society, from prevalent attitudes and advertising messages to health-care and housing practices. I have always admired the way Indigenous cultures honour the wisdom and experience that elders accumulate. We may do that with older adults in our own families, but society as a whole cannot be counted on to do the same. I've seen older adults discounted in the workplace for supposedly being out of touch or unable to learn new technologies, or seen as no longer actually needing the work and the paycheque. We sometimes seem to think that a person's value ends when their job does, and that people 65 and older are somehow nearing the end of their shelf life. That they should just be content to collect their Old Age Security (a misnomer if there ever was one) and leave the fast-paced world to the rest of us. (And while I'm on this rant, may I suggest to the government that it rename the OAS as the Canadian Retirement Supplement? Because that's what it is. Given the cost of living in Canada, the OAS — while vital to most of its recipients — on its own is insufficient to provide financial security to anyone). Ageism is endemic. A 2022 federal government discussion guide on the topic outlines the multitude of harms it causes in society. Older adults are regularly discriminated against when it comes to hiring and layoffs, social inclusion, buying or renting homes and accessing health care. All the seniors' discounts in the world can't make up for the dismissive attitudes. In the home where my mother lives — and I suspect in many more — older people, particularly those with some form of cognitive impairment, are regularly infantilized. Now, I'm from Newfoundland, where people regularly address friends, relatives and outright strangers as 'my love,' 'my darling,' 'my duckie,' 'my sweetheart' — those are terms of warmth and general affection, so I don't mean that. What I mean is when adults are talked to like toddlers, often in a gushing 'baby' voice. 'Oh, you're giving out kisses today, are you? I'll take one if you're giving out kisses!' Or when older adults are praised for their docility — as if that's all we want from them as this point. 'She's so good and so pleasant. She's no trouble at all.' All of us — and particularly people who work with adults needing care in various ways — need to realize that these are not children in big-people clothes, but adults who have led complex and independent lives, and who deserve to be treated with dignity and respect and to be consulted about things that matter to them. The world is full of examples of vibrant people who live fully and work rigorously well into their 70s and 80s — even their 90s, such as my optometrist friend, Avrum. Yet society often renders them invisible. The media generally — social media, news media, advertising — has a definite bias towards youth, and this has harmful effects on us all. According to the discussion paper on ageism, researchers have identified three trends when it comes to media representation: ● older adults, particularly women, are underrepresented ● it spreads stereotypes about frailty and dependency ● older adults are praised when they look and act middle-aged or younger These portrayals of older adults — or the lack thereof — can send damaging messages to younger people about strength vs. weakness, competency vs. mental frailty, worth vs. uselessness. Weekday Evenings Today's must-read stories and a roundup of the day's headlines, delivered every evening. 'Media may portray a growing older adult population as an unfair burden on younger generations and as a threat to the sustainability of health care and pension systems,' the discussion paper says. These days, many of my personal heroes are over 65 — Margaret Atwood, Stephen Lewis, Joni Mitchell, Burton Cummings, Annie Lennox, Kate Bush, Paul McCartney, Mick Jagger, Elton John, Helen Mirren, Judi Dench. But they're still in the public eye. It's the adults flying under the radar we need to worry about, and we need to be calling out systemic discrimination and condescension when we see it. Manitoba's pending seniors' advocate can't get started soon enough. Pam Frampton lives in St. John's. Email pamelajframpton@ | X: @Pam_Frampton | Bluesky: @ Pam Frampton Pam Frampton is a columnist for the Free Press. She has worked in print media since 1990 and has been offering up her opinions for more than 20 years. Read more about Pam. Pam's columns are built on facts, but offer her personal views through arguments and analysis. Every column Pam produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press's tradition, since 1872, of producing reliable independent journalism. Read more about Free Press's history and mandate, and learn how our newsroom operates. Our newsroom depends on a growing audience of readers to power our journalism. If you are not a paid reader, please consider becoming a subscriber. Our newsroom depends on its audience of readers to power our journalism. Thank you for your support.
Yahoo
17-06-2025
- Business
- Yahoo
Planning to Retire in the 2030s? Read This Before You Collect Your First Social Security Check.
Social Security is projected to run out of money by 2035, according to the latest report. It's important for those within a decade or so of retirement to know where things stand, beyond the headlines. The worst-case scenario might not be as bad as you think, and there's plenty of time to fix the problem. The $23,760 Social Security bonus most retirees completely overlook › You may have heard that Social Security isn't exactly on the best financial footing, and that's true. Although the Social Security trust funds have trillions in reserves right now, the reality is that Social Security is paying significantly more money to beneficiaries than it is taking in, and the deficits are expected to get far worse in the coming years. In fact, the latest estimates from the Social Security Board of Trustees project that the combined trust funds for the Old Age and Survivors Insurance and Disability Insurance trust funds will be depleted by 2035 unless something is done. While this might sound like an emergency, especially if you're planning to retire in the next decade, it's important to take a step back and put things into perspective. So, here's what Social Security running out of money could mean for you, and what is the most likely scenario. For sake of argument, let's say that the latest trustees' report projection happens, and Social Security's trust funds completely run out of money in 2035. At the end of 2023, the latest year for which we have final data, the Social Security trust funds had a total of about $2.8 trillion in reserves. The program took in a total of $1.35 trillion in income between payroll taxes, taxes on certain Social Security benefits, and interest earned on the reserves, and paid out about $1.39 trillion -- a roughly $40 billion deficit that is withdrawn from the trust funds. But the key thing to emphasize from that last paragraph is that most of Social Security's benefits are paid from income coming into the program, not from the reserves. So even if the deficits get much larger and the trust funds are depleted in 2035, there will still be payroll and other tax revenue coming in. In fact, the latest projections found that even if the trust funds are allowed to run out of money entirely, incoming revenue will be able to cover 83% of scheduled benefits. In other words, in a worst case scenario, if you were expecting a $2,500 monthly Social Security retirement benefit based on your work record (you can view an estimate for yours by logging in at you would still receive monthly checks of $2,075 even if Social Security was completely out of money. One big reason Americans are nervous about the Social Security shortfall is that it's been a known problem for a long time. I've been writing for The Motley Fool since 2011, and the Social Security Trustees Report from that year found that the trust funds would be depleted by 2036, just one year later than the current estimate. So why hasn't anything been done? The short answer is that the ways to fix Social Security are politically divisive, and quite frankly, with a decade or more of financial runway, those in power simply haven't made Social Security reform a priority. To be fair, there have been some significant tweaks, such as eliminating the "file and suspend" loophole a few years ago, but nothing major has been done to extend the program's solvency. Having said that, it's worth noting that we've seen a similar situation play out before. In the early 1980s, Social Security was just a few months away from running out of money, and the Social Security Amendments of 1983 helped stabilize the program for the next few decades. Just to name one provision, this round of reforms is why the full retirement age has gradually risen from 65 to 67 over the past couple of decades. The bottom line is that history shows us that something will be done to bolster Social Security's financial situation, even if it happens at the last minute. And while the exact reform package remains to be seen, it's also worth noting that virtually nobody is talking about benefit cuts for those currently receiving payments, or those who are close to retirement age now. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Planning to Retire in the 2030s? Read This Before You Collect Your First Social Security Check. was originally published by The Motley Fool
Globe and Mail
22-03-2025
- Business
- Globe and Mail
Nick, 65, and Heather, 64, want to ‘die with zero.' What should they do in retirement?
Nick and Heather's retirement spending goal is $148,000 a year after tax. CHAD HIPOLITO/The Globe and Mail Nick is 65 years old and retired. His wife, Heather, is 64 and self-employed, earning about $40,000 a year in a line of work that she enjoys. Although they own three investment properties, they are renting their residence at the moment and looking to buy a B.C. waterfront property for about $1.2-million. 'As of this year, we are considered first-time home buyers again,' Nick writes in an e-mail. So as well as having a First Home Savings Account of their own, they also want to open FHSAs for their three children to help them with down payments on their first homes. They wonder whether Heather can afford to fully retire and when they should start drawing Canada Pension Plan benefits. Nick is already getting Old Age Security. He also asks if they should invest in a whole life insurance policy to further diversify their investments. They already have a grab bag of diversified investments, including stock-and-bond exchange-traded funds, private mortgages and real estate investment trusts. Their retirement spending goal is $148,000 a year after tax. We asked Warren MacKenzie, an independent financial planner in Toronto, to look at Nick and Heather's situation. Mr. MacKenzie holds the chartered professional accountant designation. 'Nick and Heather's main goal is enjoy financial security in their retirement with no fear of running out of money,' Mr. MacKenzie says. In addition they would like to help their children purchase their first homes. They also want to buy a waterfront property so they will have easy access to their sailboat. They plan to contribute $40,000 to a First Home Savings Account for each of their three children, 'a sensible way to help their children get a head start,' the planner says. Another estate goal, according to the planner's questionnaire, is to avoid any legal complications or possible conflict between their heirs. 'To reduce the possibility of a conflict, they have appointed a lawyer rather than one of their children act as their executor,' Mr. MacKenzie says. 'Assuming an average investment return of 5 per cent a year with inflation running at 2 per cent a year, the projections show that they can achieve their spending goals,' the planner says. He further assumes that they sell all the rental properties by the time they buy the house. Nick says they plan to sell them over three years to minimize the capital gains tax. After buying a new house, their basic lifestyle spending will be $70,000 a year, plus about $60,000 in mortgage payments and about $20,000 a year for a whole life insurance policy. The forecast assumes that by age 85, they will sell their sailboat and expenses will fall by $10,000 per year. 'Nick and Heather understand that while long-term projections are never totally accurate, they can give an important warning of potential problems,' he says. Regularly reviewing their plan would give them time to make a small spending adjustment, for example. 'Over a 10- or 15-year period a small reduction in spending would be enough to offset a significant loss,' Mr. MacKenzie says. Based on reasonable assumptions, the projections show that they can achieve their goals and possibly leave an estate of about $1-million in dollars with today's purchasing power, he says. Their asset mix is about 23 per cent interest-bearing investments, 45 per cent stocks and stock exchange-traded funds and 32 per cent real estate. The mix is reasonable, but they hold a large proportion of stocks in their registered retirement savings plans (RRSPs), the planner notes. Instead, they should hold their stocks in their taxable account so that they can take advantage of the lower rate of tax on capital gains, he says. 'Capital-gains-producing investments held in RRSP accounts lose the lower tax benefit because all withdrawals are 100-per-cent taxable.' As a do-it-yourself investor, Nick has done reasonably well, earning an average return of 7.5 per cent a year, Mr. MacKenzie says. 'They should have a plan for how the portfolios would be managed if anything happened to Nick.' The overall portfolio is unnecessarily complicated, with investments spread out over a dozen different RRSPs and registered retirement income funds (RRIFs). They have $100,000 cash in the bank, a $33,500 line of credit at 6 per cent and $57,695 in other loans at 3.6 per cent. 'It makes no sense to have cash in the bank earning almost nothing and also have about $90,000 of debt where the interest is not fully tax deductible,' the planner says. The couple ask when they should begin taking CPP benefits. 'They are both in good health and they live a healthy lifestyle,' Mr. MacKenzie says. 'It is reasonable to assume that they will live to their mid-80s and beyond,' the planner says, 'so it makes sense to delay the start of CPP until age 70.' By so doing the benefits will be 42 per cent higher than if they start CPP at age 65. Since their income is below the OAS clawback threshold, they have decided to start their OAS at age 65 for cash flow reasons, the planner says. By age 70, after they are both collecting CPP, the projections show that their net worth will be about $2-million. 'If they make it to age 100, their net worth will have decreased to about $1-million in dollars with today's purchasing power,' he says. In 2031 their cash flow will consist of CPP benefits of $35,000, OAS benefits of $19,800 and their defined benefit pensions of $9,700, for a total of $64,500 a year. Their investment portfolios will be valued at more than $1-million and should be expected to grow by about $50,000 a year, Mr. MacKenzie estimates. In addition, the cash surrender value of the whole life insurance policy, if they buy one, would grow by about $15,000 a year. With 2-per-cent inflation, the value of their home would be expected to grow by about $25,000 a year while the mortgage principal would be reduced by $30,000 a year. This equates to an increase in net worth of about $185,000. Against this are basic spending of $81,000 a year, mortgage payments of $73,000 a year, life insurance of $18,000 a year and income tax of $29,000 a year, for a total of $201,000. Until they start CPP at age 70, they will not have sufficient income to use up the lowest tax bracket. It would therefore make sense to withdraw an amount from their RRSPs and RRIFs that would be sufficient to bring taxable income up to about $58,000 a year each so that they use up all the room in the lowest tax bracket, Mr. MacKenzie says. Otherwise, Nick will be forced into a higher tax bracket later in life and may be faced with a clawback of OAS benefits. Heather and Nick should aim to have equal taxable income so that one does not pay tax at a higher tax rate than the other. They have non-registered funds on hand and they also have contribution room in the FHSAs and TFSAs. 'They should move money from their non-registered account to their TFSAs and FHSAs,' the planner says. Nick and Heather are budgeting to spend over $20,000 per year to purchase a whole life insurance policy. The insurance proceeds would be received on a tax-free basis at death but withdrawing all the cash surrender value would have tax consequences, he notes. 'Whole life insurance can be a sound investment, but if they have other lifestyle goals and are not focused on maximizing the size of their estate, they should reconsider this expense.' The People: Nick, 65, Heather, 64, and their three children, 27, 29 and 31. The Problem: Can they afford to buy a new home and help their children with down payments while still enjoying a comfortable retirement lifestyle? The Plan: Buy the house. Defer CPP to 70. Nick draws from his RRSP/RRIF in the early years. Contribute to first home savings accounts for their children. The Payoff: Financial goals achieved. Monthly net income: $10,375. Assets: Cash $100,000; his stocks and stock funds $175,000; her stocks and stock funds $175,000; his TFSA $191,365; her TFSA $86,185; his RRSP $770,750; her RRSP $122,030; his FHSA $6,625; her FHSA $6,625; investment properties $725,000. Total: $2,358,580. Estimated present value of their combined, partly indexed defined-benefit pensions: $200,000. This is what someone with no pension would have to save to generate the same income of $340 a month for Nick and $420 a month for Heather. Monthly outlays: Rent $3,000; home insurance $20; electricity $90; heating $25; transportation $755; groceries $1,500; clothing $35; line of credit $165; loan $180; gifts, charity $165; vacation, travel $925; other discretionary $150; club memberships $80; dining, entertainment $135; sports, hobbies $880; subscriptions $50; doctors, dentists $220; drugstore $110; health, dental insurance $230; life insurance $1,740; phones, TV, internet $115; TFSAs $100. Total: $10,670. Liabilities: Rental property mortgages $433,150 at 4.85 per cent; line of credit $33,500 at 6 per cent; other loans $57,695 at 3.6 per cent. Want a free financial facelift? E-mail finfacelift@ Some details may be changed to protect the privacy of the persons profiled.
