So I detailed some of the differences between generations.
A torrent of reader rage followed.
Readers were angry with the daughter. She was "whining" and "selfish." Others said she should consider herself lucky to have the money she had ($1.2 million). She should be glad she didn't have to support her mother because Mom had $1.4 million. Others thought anyone with that much money didn't have a care in the world.
Sadly, many older people are so lost in their own struggles they don't understand the burden younger people are carrying.
Before you start sending a new barrage of hate mail to your 62-year-old columnist, let me make one thing clear. I am not writing to blame anyone. What's important is that all of us understand that everyone gets a shot at being elderly--- but we won't do it under the same conditions. We can do this by comparing the lives of three women: a mother, daughter, and granddaughter.
Mother. If you were born in 1917 you grew up in the turmoil that followed World War I. Your husband looked for his first job during the Depression. You knew hard times. The good news is that the Depression and World War II had consequences. Social Security was created to prevent millions of people from starving. World War II wage and price controls forced corporations to compete for scarce talent by offering health insurance and retirement pensions.
Little of this came out of your husband's paycheck. The combined employment tax was 2 percent of the first $3,000 of wages from 1937 through 1949. Your husband paid 1 percent, $30 a year. If he retired in the early 70's, his tax never topped 5.2 percent of the first $9,000 of wages.
Better still, your husbands' employment taxes bought two benefits. Spouses got Social Security benefits without working. One tax payment bought 1.5 benefits because a non-earning spouse got half her husbands' benefits. During Mothers' lifetime, the total cost of Social Security was about 2 percent of wages, not including the half paid by the employer. It was a really good deal. (In fact, it was too good a deal. Sold as a personal pension, the taxes paid were never enough to actually finance a retirement. The plan always counted on money from the next generation.)
It was much the same with the private pension. The corporation paid about 7 percent of payroll for it and the employee got a lifetime income.
Daughter. Born after 1940 and approaching 60, you've had a very different experience. Your employment tax started at 3 percent of the employees' first $4,800 of income and rose to 7.65 percent of the first $87,000 of income. Your total averaged about 6 percent of wages over your working lifetime--- that's 3 times what your dad paid.
More important, the cusp generation paid two employment taxes because Daughter and her spouse both worked.
Where did all that employment tax money go?
It went to support Mother.
Mother kept her savings intact because Daughter was helping to pay Mother's bills. Daughter and spouse did it with their employment taxes. Without Mom's Social Security income, she would have had to ask her daughter for money directly.
Daughter had a hard time saving for her retirement because she and her husband were paying 3 times as much of their income for employment taxes as her dad paid. Worse, corporate pay and benefits started to falter in the 70's. Many corporations either eliminated pensions--- or they eliminated the employees entitled to them.
Even so, Daughter and her husband managed to accumulate $1.2 million. That sounds like a lot, but $1.2 million for a two people with a life expectancy of 30 years is a lot less than $1.4 million for an 86-year-old mother in assisted living. Mother isn't likely to outlive her assets. Daughter is.
Granddaughter. Born in 1965, Granddaughter is likely to retire in 2032. That's 10 years before the current Social Security Commissioner says retirement benefits will be cut 27 percent unless something is done. Granddaughter will pay higher employment taxes than Mother or Daughter, won't have a prayer for getting a corporate pension, and will see her ability to save erode as her employer cuts her medical insurance benefits and cops out on her 401(k) match. Then, when she is 77 and too old to return to work, the government will cut her Social Security benefits.
Bottom line: Life ain't easy. It wasn't before. It isn't now. And it won't be easy later. Not for anyone.
Don't think granddaughter will suffer a cut in retirement benefits? Read the letter from Social Security Commissioner Jo Anne Barnhart
Read the column readers were so angry about
Read about the real tax burden on the second worker in a household
Read about the tidal wave coming for our children and grandchildren
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