Actor and producer Danny DeVito must be doing a little retirement planning. Today, DeVito, 66, posted on Twitter (@DannyDeVito) his opinion of any move to cut Social Security or raise the retirement age:
"Don't raise da retirement age! You expect folks to bop till they drop? you gon have a truck driver on da road till he or she's 68?"
I'm not sure what moved DeVito to post these opinions, but it could have been the report released yesterday by consultancy McKinsey & Co., which predicted that the unemployment rate is likely to remain about as high as it is now for another 10 years. In an accompanying white paper, McKinsey recommended keeping boomers on the job longer as a cure for the ailing economy. McKinsey said that if boomers keep working, they'll continue to pay taxes. They won't depend as heavily on Medicare. And they'll have more money to spend, which will stimulate the economy and create more jobs for everybody.
To encourage boomers to keep working, McKinsey recommended that employers and the government work together to make these changes to the way the things are now:
- Reduce the cost of hiring older employees by making it easier and more affordable for boomers to buy private health insurance and less costly for employers to buy it for them.
- Cut through legal and regulatory barriers to give employers incentives to keep older workers on their payrolls and to hire additional older workers.
- Reform private pensions and Social Security to remove disincentives to working longer. One idea in this category that McKinsey suggests is to modify how Social Security is calculated so you earn more of it for working longer -- even if you aren't a high-wage earner.
Retired Rowan University Finance Professor Robert Pritchard offered some similar suggestions in last Wednesday's retirement blog. I urge you to go back and read it again -- even if you disagreed with him the first time around -- because Pritchard is clearly onto something. Adopting either his or McKinsey's approach could potentially be good for all of us, including people who don't want to work longer. It would take some of the pressure off Social Security and Medicare as well as reduce the stress on social programs like Medicaid and housing assistance that help really low-income seniors survive.