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Social Security is Nonsensical
You've heard the stories: Social Security is underfunded and doomed to go bankrupt. The coming demographic shift in the United States will bring the system to its knees. There won't be enough workers per retiree to maintain current spending levels. These are all true charges — Social Security is a slow-motion catastrophe. The nature of our political system confounds all honest attempts to fix the program. It is an inherent structural aspect of democracy that the young and the unborn cannot vote to prevent the burden their parents are laying on them. But all the ink spilled over the subject has been beside the point.
The real problem with Social Security is that it's utter nonsense. How can I say that? Because the fundamental assumptions underlying the system are false.
Dr. Aubrey de Grey, biogerontologist at the University of Cambridge, believes that the first person to live to the age of 1,000 is already alive today — and is already 45 years old! Dr. de Grey argues that aging is a curable affliction and that extended lifespans would be filled with healthy, productive years — not centuries of frailty. Please visit his SENS website for more information.
Social Security's fundamental assumptions are that people will retire, and that retirement will be short and ended by death. An individual will contribute into the system for approximately 45 years, and collect benefits for about 15 years. (background on these figures)
It is obviously ridiculous for a person who lives to be 1,000 to spend less than 5% of those years contributing to Social Security, then retire and spend more than 95% of their lives collecting benefits. It could not work. It would be a society of parasites with too few victims to sustain itself. The same observation applies to any other system where benefits begin at a certain age and terminate at death: The time spent collecting benefits will balloon beyond all prior expectations. No, your 401(k) doesn't make much sense, either — forcing withdrawals when you're less than 100 is plainly silly when you'll live ten times that long!
The concept of retirement itself is nothing but a passing fad. The purpose of saving for retirement is to be able to live comfortably during the final years of your life when you're unable to work. If you no longer age and have an indefinite productive lifespan, there is no reason to retire in the traditional sense. Your life would end due to accident or disease, neither of which can be predicted. You'll need emergency savings, yes, but not funds for retirement.
Instead of retirement, it is likely that people would save for extended (multi-year or multi-decade) vacations that would include leisure and education. People would work in a field for (say) 50 years, then tire of it and take time off to relax and learn something new. They would re-enter the workforce in a different field. This is my own plan, at least — others may have different ideas, which I'd like to hear.
Families would change significantly, too. This sort of extended vacation would be the logical time to have children, because you would have time to spend with them instead of working. Imagine starting a new family every 75 years, but with the prior families still around!
This is a glimpse into the future, a future that will be upon us sooner than most expect. The political systems created for retirement, such as Social Security and IRAs, do not make sense in the new age of the end of aging.
Private retirement arrangements will need to adjust also, but they are free from the ossifying "third rail" political bickering. I do not worry about the coming adjustments in private systems. Public systems are in trouble, because dedicated special interest groups will cling to their handouts and ferociously denounce those who advocate change.
What politician understands this and is willing to assume the fight to set young people free from these ridiculous mandatory retirement programs?