Retirement

Retirement
Union soldiers were offered pension as an inducement to enlist.

Bismarck paid his solders a pension as well in the 1880s.

State workers began lobbying for pensions in the late 1800s, early 1900s.

The whole idea of retirement is only 120 years old, but we treat it like a right.

Age Discrimination
Retirement rates increased from age discrimination at the beginning of the 20th century resulting from:

Shorter workdays

Scientific Management

Why 65?
“Age 65 is generally set as the threshold of old age since it is at this period of life that the rates for sickness and death begin to show a marked increase over those of the earlier years”
-Isaac Rubinow, 1916

“It is a commonplace fact that physical ability, mental alertness and cooperativeness tend to fail after a man is 65”
-Federal Government before the Supreme Court, 1936

Importance of Social Security Benefits to Those Aged 65+
34%
31%
35%
Less than 50% of Income
50% to 90% of Income
90% to 100% of Income
Data Source: Social Security Administration, 2012

The Increasing Retiree Population, 1992-2012
Data Source: Census Bureau, Current Population Survey, March Supplements, 2012

Thousands
Population currently over 65
Population over 65 by 2025
Who We Will Support
in the Future

Who Gets the Money?

Video
Can You Afford to Retire?

The State of the States

State Pension Funding
Levels 2012
Source: Pew Center, 2012

Funding for Retiree Health Benefits, 2012
Source: Pew Center, 2012

Comparing Pension & OPEB Funding and Liabilities
Retiree Health Benefits
$659.6 Billion
$32.4 Billion
$659.6 Billion
State Pensions
$3.06 Trillion
$759.7 Billion
$2.31 Trillion
Source: Pew Center, 2012

State Pension Reforms
2010
Source: Pew Center, 2012

State Budget Gaps
Source: Center on Budget and Policy Priorities, 2012

State Budget Gaps
Continued Growth of 8.3% Per Year Would Not Restore
Losses from Recession Until Fiscal Year 2019
Source: Center on Budget and Policy Priorities, 2012

Sales Tax Revenue in 3 Recoveries
Rockefeller Institute, 2013

Personal Income Tax Revenue in 3 Recoveries
Rockefeller Institute, 2013

State Revenue Losses Exceed Previous Recessions
Source: Center on Budget and Policy Priorities 2012

Comparing State Revenues to Previous Recoveries
Source: Center on Budget and Policy Priorities 2012

Source: Center on Budget and Policy Priorities 2012

Cuts in Services by Number of States and Category
Source: Center on Budget and Policy Priorities 2012

Tax Increases by Sector and Number of States
Source: Center on Budget and Policy Priorities 2012

How States Closed Budget Gaps by Cutting College Funding
Florida drastically reduced funding of higher education, which means less allocation to colleges. The current year tuition increase is 15%.

From 2009 – 2012, the tuition increase is 52%.

California has cut higher education by over $1 billion. Cal State increased tuition this year by 18%.

From 2008 through 2012, Cal State increased tuition by 80%.

City Pensions, Funded vs. Un-Funded
Source: Pew Center, 2013

Pension Funding: Cities vs. States
Source: Pew Center, 2013

The Federal Government

U.S. Federal Government Spending vs.. Receipts, 1980-2012
Data Source: Bureau of Economic Analysis, 2013
In Billions

Government Revenue as Percent of GDP, 1979-2012
Data Source: St. Louis Federal Reserve, 2013

Distribution of Federal Spending, 2012
Data Source: Office of Management and Budget, 2013

Balancing (or not)
the US Budget

Video

Effective Federal Tax Rates, All Payers, 1979-2011
Data Source: Congressional Budget Office

Source: IRS, Statistics of Income, 2009
Taxes and the Rich

Data Source: IRS, Statistics of Income, 2009
Taxes and the Rich

Steps in Tax Staircase

Payroll Tax $126 billion

Unemployment $ 40
ACA – personal $ 24
Bush-era Upper $ 56
Bush-era Lower $0
Alt Min Tax $0
Sequestered Cuts $ 85 (45 for this year)
Who gets hit first? The working poor.