Tuesday, September 04, 2007

Older Early Retirement

This paper argues for raising the early retirement age for Social Security to 63.5 from 62 in order to extend the typical working life. A core argument in it is that only 10 percent of workers would be negatively affected by being unable to work during those extra 18 months. What the paper does not consider is how many will die before they will be able to collect. Death is, of course, a boon to social security since it saves 100 percent of payments in those cases.

After looking around the internet, it would appear that about 1.5 percent of 62 year olds will die by the time they are 63.5.


Why Not?

WSJ on Home Prices

The Wall Street Journal has an popular take on over-priced California homes. It seems there a couple ways a home's value can be derived -- replacement cost (the cost to build the house and buy the land) and economic value of the rents (the potential rental income minus operating costs divided by the expected return sought). By my calculations, housing is expensive by both measures today.