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Not AARP

February 5th, 2012 . by economistmom

cbo-chart-of-life-expectancy-jan2012-issue-brief

I’m turning 50 in a few weeks, but I’m not Anywhere Approaching Retirement Plans (AARP).  In fact, I’m an optimist and think I’m only about halfway through my life, as well as only about halfway through my working career.  And “quality adjusted” for how much wiser I have gotten over the years, that means I’ve really got most of my life and most of my working career still ahead of me.  That’s why I am having a hard time accepting my invitation to join the organization formerly known as the American Association of Retired Persons (AARP)–now just known as AARP–even with all their nice discounts and although their mission statement certainly sounds right up my (nearly-50-year-old) alley:

AARP is a nonprofit, nonpartisan organization with a membership that helps people age 50 and over have independence, choice and control in ways that are beneficial and affordable to them and society as a whole, ways that help people 50 and over improve their lives. Since 1958, AARP has been leading a revolution in the way people view and live life.

The AARP now emphasizes a broader notion of “quality of life”–rather than just “quality of retired life.”  They just happen to focus on those people who are 50 and over, not necessarily retired people, but just “older” or more “mature” people.  (I personally prefer the term “mature” to “senior,” although true confession time:  As some indication that I at least subconsciously have started identifying myself as a “senior,” the other day when I came across this CNN story’s headline which began “Senior’s Photo Deemed Too Sexy…”, I must confess I immediately clicked onto the article out of curiosity, expecting to see someone my age in the photo, and not the high school “senior” it turned out to be.  LOL.  I hadn’t even read far enough into the headline to notice the “yearbook” reference.)

If today’s AARP is really about helping those “50 and over [to] improve their lives” but also to encourage in the 50+ crowd the kind of “independence, choice and control” that could be “beneficial and affordable” to “society as a whole,” then AARP needs to break out of their old habit of automatically demanding that the retirement-age federal benefit programs not be modified to reflect the new characteristics of their no-longer-so-retired membership.  (The latest example was their unfortunate ad campaign designed to bully the supercommittee out of recommending any reforms to Social Security–which I was not too happy about.)

When AARP was founded in 1958, life expectancy at age 65 was about 5-6 years less than it is today, as shown in the chart above, which comes from a recent issue brief by the Congressional Budget Office. In the report, CBO explains how raising the eligibility age for Medicare and Social Security benefits–in ways that would only partially catch up to increases in longevity that have taken place over the years–would reduce the costs of the programs.

With my impending AARP eligibility and my dad’s very recent retirement at an age far exceeding the “normal” retirement age, I decided to write about this issue in a column for the Christian Science Monitor.  I explained that raising the “retirement age”–shorthand for the eligibility age for receiving full retirement benefits–seems to be just common sense, but I also acknowledged that given how we all age differently and work different types of jobs, any reduction of retirement benefits can’t be done in just an across-the-board, one-size-fits-all, way.  I concluded that:

Just as with any federal budget issue, this is a hard choice. If lawmakers are going to cut spending and deficits, they will have to cut overall benefits on average. There’s no way around that.

But cutting benefits for those who can afford to work longer, both financially and physically, can spare – and perhaps even strengthen – the benefits for those who cannot easily work longer.

And those fortunate enough to be the ones who can “afford it,” like me and my dad, may hardly be upset about this common-sense policy change. That’s because we are also the ones most likely to choose to work longer for reasons that have little to do with money.

Then last Thursday I spoke on this topic on Patt Morrison’s radio show on southern California’s NPR station, KPCC, where we heard a variety of perspectives from the listeners who called in.  The podcast recording is available here on the show’s website.

Bottom line is that with all of us living longer, at least some of us will choose to work longer.  As tough as it is to generalize with one-size-fits-all eligibility rules, does it really make sense to keep our rules fixed at where they were decades ago, back when 50 or 65 was a lot closer to being “almost old” or “old” than it is now?  I know many AARP members view their roles as parents or grandparents as their proudest achievements, and their kids’ and grandkids’ well being as what they care most about.  That makes me wonder if the AARP leadership even recognizes that and knows what the organization is doing when it simultaneously claims to have a mission to benefit “people age 50 and over” and “society as a whole” and opposes reforms to benefit programs that would raise eligibility ages.

9 Responses to “Not AARP”

  1. comment number 1 by: Bill Birnbaum

    In spite of AARP’s reluctance to support raising the retirement age, such raise is inevitable. For as our life expectancy increases, our government finds it more and more difficult to keep its financial promises to retirees. Bill

  2. comment number 2 by: AMTbuff

    The government will inevitably break many of its promises to lenders (bondholders) and to present and future recipients of benefits.

    Each of these groups is reluctant to be first in line at the barbershop. The AARP is no different.

  3. comment number 3 by: AMTbuff

    AARP needs to break out of their old habit of automatically demanding that the retirement-age federal benefit programs not be modified to reflect the new characteristics of their no-longer-so-retired membership

    Given our Ponzi-like fiscal situation, they are Anxious About Receiving Payments.

  4. comment number 4 by: Arne

    “break many of its promises”

    It seems to me that rather than “break” promises, we need to be honest about what the “promises” actually are.

    The CBO baseline is current law when it comes to talking about most things, but when talking about Medicare Part A and about SS they start from “scheduled” benefits. It neither case is there much clarity on what anyone has promised.

  5. comment number 5 by: AMTbuff

    Arne, if it helps you I am referring to what the public expects to receive, which means what people are currently receiving at a given age and income. In other words, the only baseline that the public knows is current policy.

    Current law baselines are strictly an inside the beltway concept, especially in an era of budget gimmickry that employs unrealistic sunsets.

  6. comment number 6 by: Underwriterguy

    I tore up my AARP card some years ago when it became clear the leadership was not nonpartisan and positions were fundamentally opposed to any meaningful entitlement reform. Mom suggests that some may wish to work longer and defer retirement (they don’t “need” it). The same is true of the better off among us. When AARP advocates means testing SS and Medicare I’ll consider rejoining.

  7. comment number 7 by: B Davis

    That’s why I am having a hard time accepting my invitation to join the organization formerly known as the American Association of Retired Persons (AARP)-now just known as AARP-even with all their nice discounts and although their mission statement certainly sounds right up my (nearly-50-year-old) alley:

    When I accepted their invitation a few years back, I had similar misgivings. I signed up for basic membership with the excuse that I could monitor what they were saying to their membership (besides getting the nice discounts). I don’t contribute to any of their voluntary drives as I feel there are groups that better represent my views (like the Concord Coalition!). You might want to consider a similar compromise.

    Just as with any federal budget issue, this is a hard choice. If lawmakers are going to cut spending and deficits, they will have to cut overall benefits on average. There’s no way around that.

    But cutting benefits for those who can afford to work longer, both financially and physically, can spare - and perhaps even strengthen - the benefits for those who cannot easily work longer.

    I agree. One way to do this might be to continue to allow early retirement at age 62 but to raise the normal retirement age. This would normally require that the benefits for early retirement be cut. However, you could counteract this reduction by making the benefits more progressive. Following is a summary of the current benefit formula from this link:


    (a) 90 percent of the first $767 of his/her average indexed monthly earnings, plus
    (b) 32 percent of his/her average indexed monthly earnings over $767 and through $4,624, plus
    (c) 15 percent of his/her average indexed monthly earnings over $4,624.

    The “bend points” or percentages could be changed or some other modification could be made to insure that low-wage workers who retire early do receive some minimal level of necessary benefits.

    I haven’t heard it mentioned but I wonder if some sort of “early retirement” is possible with Medicare as well. I know someone who had no health insurance and had to have heart surgery. Fortunately, he had just turned 65. Rather than raise the age of Medicare, perhaps we could provide catastrophic coverage to “young seniors” and provide fuller coverage to older seniors. Alternatively, we might ensure that affordable catastrophic insurance is available and require that everyone carry it (at least by a certain age). Otherwise, our Medicare system becomes something of a lottery making losers out of those that need medical care a little too early.

  8. comment number 8 by: Brooks

    FYI All, just heard about this new book. I don’t know much about it other than that the person recommending it characterized it as indicating that America is conservative.

    The People’s Money: How Voters Will Balance the Budget and Eliminate the Federal Debt
    http://www.amazon.com/Peoples-Money-Balance-Eliminate-Federal/dp/1451666101/ref=sr_1_1?ie=UTF8&qid=1328642636&sr=8-1

  9. comment number 9 by: AMTbuff

    After reading the reviews, I’m not sure what new information this book offers. The public likes most specific spending programs, dislikes most taxes, and dislikes deficits. I doubt that any poll will every be able to resolve that contradiction.

    Instead we should look to Greece and other countries in Europe to see how this will sort out in America. I continue to believe that once the fiscal gap is closed, e.g. through a default and spending cuts to balance the budget, the economy’s rate of growth will be astounding. That’s why I believe that a fiscal crisis would be very beneficial to the younger generation.