W: The Planner, The Chosen

by Alexandra Swann

  “But today, Americans are living longer than ever before. The fastest-growing segment of the U.S. population is Americans eighty and over. The growth rate for this sector is four times that of the total population. By 2050, we expect the U.S. to have over nineteen million people in the over eighty years of age population group.

  “The average American can expect to live twenty to twenty-five percent of his or her active life in retirement. Since the year 2011, we have been adding ten thousand new retirees to the Social Security and Medicare rolls per day. Between now and 2031, our country will see seventy-four million Baby Boomers retire. Right now, the U.S. population of people over sixty-five outnumbers the combined populations of New York, London and Moscow. And this is not just a U.S. phenomenon—worldwide there are more people over sixty-five than the entire populations of Russia, Japan, France, Germany, and Australia combined. Worldwide, people over sixty-five now outnumber children under age five.

  “Given these facts, we have a huge challenge on our hands. The present system of Social Security and Medicare was created for a society where people of retirement age were a small minority of the population—less than six percent. These programs were never designed to provide benefits for twenty to thirty percent of the nation’s population.

  “Unfortunately, the politicians did not look up and see that the light at the end of the tunnel was actually an on-coming train until just a couple of years ago. Then, suddenly, people looked around and realized, ‘Hey, we’ve got all these people about to retire and no way to pay for them.’ And after taking a hard look at the numbers, they realized that Social Security was actually going bankrupt. In fact, we realized by 2011 that the Social Security fund would actually be in the red in ten years.

  “The current Administration is dedicated to fixing the problems resulting from an aging population and the Social Security shortfall. We want all of our seniors to be able to enjoy their best years free of the worry and stress of fearing what will happen if one day that Social Security Direct Deposit doesn’t come because the government is out of money. But we also recognize that Social Security was in many ways a panacea that did not solve all or even many of the problems of the elderly. That is why the Administration is launching Smart Seniors—we want a holistic approach to senior living that will solve not only the problems of Social Security and Medicare but all of the problems that seniors face. Over the next three weeks, we are going to teach you how to think about a whole new way of living. Smart Seniors is not just about where seniors live; it is about how they live. That’s the main message you have to communicate when you are selling this program to the community—this is not about replacing your Social Security check; this is about a whole new concept of retirement.”

  The class took a fifteen minute break, and then they were back in their seats. A middle-aged man sitting across from Kris raised his hand to ask their instructor a question. Janice acknowledged him. “Okay, you keep talking about replacing your Social Security check. I was under the impression that we were selling housing. What does housing have to do with Social Security payments?”

  “You’re compartmentalizing,” Janice replied without answering his question. “You have to begin to think holistically to understand the Smart Seniors concept. During the course of this training, you will begin to see how all of these issues work together.”

  “Okay,” Janice continued. “I have a question for you. Who can tell me the answer first? What is the biggest recurring expense for people over age sixty-five in the U.S.?”

  Several hands went up, including Kris’. The owners of the multiple hands called out “health care,” or “medical care” or “prescriptions,” but Kris knew the correct answer, and she knew it didn’t have anything to do with medicine.

  When the other answers had been given, Janice finally acknowledged her. “Housing is the biggest recurring expense for seniors,” Kris answered confidently.

  “Correct.”

  The middle-aged man once again raised his hand, “How can it possibly be housing? Don’t most seniors have their houses paid off?”

  Kris looked at him but said nothing. “Would you like to answer that?” Janice asked her.

  “Certainly. Yes, a majority of people age sixty-five and older have their homes paid for or are close to it. However, they still have property taxes and insurance in addition to repairs and maintenance on their housing. As people get older they tend to be able to do less for themselves, so they increasingly need to hire others to do the maintenance or to assist with housekeeping and lawn services. Even though the house may be paid for, often the retiree’s income is significantly reduced, so as a percentage of their total income, these expenses are big.”

  “What about people who get ‘reverse mortgages?’”

  “What about them?” this time Janice answered. “A Home Equity Conversion Mortgage, commonly called a ‘reverse mortgage’ can help seniors use the equity in their homes to get some extra money to cover living expenses. But what a lot of people don’t understand is that even though seniors do not have to make payments on reverse mortgages for as long as the youngest of the two borrowers or spouses lives in the home, the borrower is still responsible for the taxes and insurance on the property. Failure to pay the taxes and insurance causes the loan to default. In other words, your home can go into foreclosure because you can’t afford to pay your property taxes or your insurance.”

  Gasps of “Wow!” went around the room. Kris, of course, didn’t gasp—she already knew this information.

  “So, let’s take a look at this,” Janice clicked to begin a Power Point presentation featuring a pie chart. “The average Social Security benefit nationwide for a sixty-five year old retired worker is $1230.50. Let’s suppose that our worker has a spouse who did not work enough to receive his/her own benefits—the average Social Security benefit for the spouse is $608.00 per month. Combined, we have an average monthly income of $1838.00 per month. Let’s say that you are a retiree and your house is paid for. And let’s say that the value of that house is $350,000—in 2006 that was about the average price of a home in Arizona, and if you are now retired, it’s probably a good bet that you bought your house when the prices were up. If today your house is valued at $350,000 you have an annual tax rate on that house of $3500.00—just a hair shy of $300.00 a month. You also have insurance. Let’s say that the insurance is about $150.00 a month. Then you have utilities. Suppose your utilities—water, gas and electric, run another $300 a month. You are up to $750.00 a month just for taxes, insurance, and utilities. So at the same time that the government is struggling to come up with ways to pay you, you, the retiree, are struggling to come up with ways to pay for a house that you don’t need any more.”

  Kris knew that she was going to regret this, but she asked the question anyway. “Shouldn’t we be taking into consideration that the majority of retired people have income in addition to Social Security? And those who don’t probably are living in cheaper housing with lower taxes and insurance?”

  Janice glared at her, “According to the Social Security Administration, forty-one percent of the income of people over sixty-five is Social Security. Fifty-four percent of married couples and seventy-three percent of unmarried individuals derive fifty percent or more of their income from Social Security. Twenty-two percent of married couples and forty-three percent of unmarried individuals depend on Social Security for ninety percent of their income. For these individuals and couples, that check is basically all the money they receive. And, yet, a big block of it is going to put a roof over their heads.

  “Our system is designed to overlook the less fortunate seniors—those who are alone through death or divorce, those who, perhaps, were not as upwardly mobile, those who experienced the hardships of life and did not save enough. We give them barely enough to hang on and then a big block of that money goes to putting a roof over their heads. This is the kind of inequity that the Retire America Act is designed to correct.

  “Ret
ire America will level the playing field between the more fortunate and less fortunate senior populations. Phase I began last year when the Act was passed by levying a tax on all retirement accounts, 401ks, and IRAs. By applying a thirty percent tax to all of these accounts nationwide, we were able to allocate the funds we needed to pay for the pilot senior communities.

  “The next phase starts in 2016. At that time, all of the private retirement accounts in the United States will be rolled into the Retire America Fund. The U.S. government will completely back this new fund.”

  Several hands went up at once. Janice recognized a bony-faced woman sitting two rows up from Kris. “Yes, Lisa.”

  “If all the money goes into the Retire America Fund, then how will people manage their money? Will we get statements every month or every quarter?”

  “Once the Retire America Fund goes fully into effect Americans will no longer receive statements about their retirement funds. All of the money will go into a common fund, and as you retire you will receive it back again in the form of community credits.”

  Another group of hands went up with a lot more questions.

  “How can the money go into a common fund? How can we know which part is ours? How can we access ours?”

  Janice waved her hands to quiet everyone down.

  “Does anybody in this room remember Bernie Madoff?” Everyone nodded. “What about the financial crisis of 2008? Does anybody remember that?” There were more nods.

  “Bernie Madoff ran a huge Ponzi scheme that defrauded investors out of their life savings while he and his family lived large. Madoff is serving 150 years in prison, but he is by no means the only example; I could give you forty or fifty examples right now of dishonest investors who have stolen Americans’ lifesavings. The Dodd-Frank bill was passed in 2010 to set up safeguards and protections for banks, financial companies and all security companies to make sure that we would never again have another financial meltdown. But we realized after a couple of years that it just does not go far enough. We’ve got greedy people in this country hoarding millions of dollars in their personal accounts, and other greedy people siphoning off that money and stealing it for personal gain. In the meantime, we have millions of people who barely have enough to get by. Through the Retire America Fund, all of that will change. Never again will a dishonest investor be able to abscond with a pension fund. Never again will a senior be stripped of his or her life savings and left with nothing because some fast-talking con man took the money. And never again will we have an elite few living in wealth and luxury while others can barely scrape together the money to pay for their medications.”

  Kris was grateful for the lunch break, both because it gave her a chance to get out of that hard, uncomfortable plastic chair and because she was out of the training. Janice might have a wealth of information on both the current problems facing seniors and the Smart Seniors’ program, but she was not an interesting trainer, and questions annoyed her.

  Kris looked at her watch; she had time to go down and meet with the benefits coordinator. She really needed to get her benefits set up—mainly she really needed to get into her new housing. Money was running low; she was in the motel only until the end of the week, and she needed to be moved by then or she would have to stay with her parents, which she did not look forward to doing.

  She made her way down the hall and, by asking directions, finally came to the room where the benefits coordinators had tables set up. After thirty minutes of waiting in a line that did not appear to move, Kris wondered if she would have to come back at another lunch break, but, finally, an additional benefits’ specialist returned from her lunch break to take the person ahead of Kris. That put her second in line to talk to somebody. Forty-five minutes had now passed—there was no hope of getting anything to eat before she went back to class, and she certainly did not want to repeat this exercise the next day, so she continued waiting until, at last, a benefits’ coordinator summoned her to take a seat in another small plastic chair situated across from his position at one end of a folding table.

  The unsmiling civil servant barely looked up, “Name?” he asked while staring at a screen.

  “Kris Mitchell—Kristina Mitchell. I am a new hire….”

  “Mitchell, Kristina. W Section—Level I Planner, Division 1. I see you here. I need your ID please.”

  The clerk took Kris’ ID and then proceeded to ask her a lot of personal health questions while filling out the information on his screen. He took down information on her number of dependants—none—and household pets—also none.

  “As part of your benefits package, you are being assigned housing in the FE section. You will be assigned to Division 4—unmarried federal employees living alone. Has this been explained to you?”

  “Yes,” Kris nodded as she answered. “It was explained to me as part of my hiring process.”

  “The position is salaried—no over-time pay. You will be paid semi-monthly. You need to complete these forms,” he handed her a stack of letter-sized papers, “to set up your deductions from your paycheck. Your housing at FE is an automatic deduction. The rest of your salary will be direct deposited to the credit bank in your community.”

  “Wait, do I have to open a new bank account? I would rather keep my own account with my current bank. I’ve been with them a long time, and I know all of my passwords…” Kris smiled when she said it hoping to establish a little bit of a friendly rapport, but the clerk did not smile or respond.

  “We don’t care whether you keep your account or not. However, your compensation is not coming in the form of U.S. dollars—you are being compensated in community credits for use in the Smart Community where you have been assigned housing….”

  Now it was Kris’ turn to interrupt. “What! Wait; I can’t be paid in credits. I have to be paid in money—regular U.S. money.” She was gesturing with her hands as if to try to explain to this obviously clueless person in front of her what constitutes regular U.S. money.

  “All employees in this program are paid exclusively in credits. That’s how this works. The Smart Communities have a credit bank. The website address is on this sheet of paper,” he highlighted a page with the address. “This number here,” he wrote a number alongside it, “is your FE number. Within forty-eight hours you need to log on to the website, enter your number, and set up a log-in ID and password. When your credits are deposited, the system will automatically generate an alert which will be sent to your federally-issued secure email address that new credits have been issued. If there are any changes to the credits being deposited, you will be issued an alert for that also. By logging in, you can check the status of your credits to see what you have spent and what you have left.”

  “That’s not going to work for me. I have bills to pay. I have credit card bills that I have to make payments on. I have expenses. I need to opt out of this.”

  “There is no opting out. The forms I just gave you are for deductions. The deductions are for the bills you want to have automatically deducted from your gross pay. Fill out the forms completely with the name of the creditor, the full account number and the amount that you want deducted from your check to go to each creditor. The balance will be deposited into your credits account for use in the community.”

  Kris stared at him wondering if she looked as confused as she felt. “So I fill out one of these forms for each creditor that I need to pay? And I fill in the amount that I want deducted? What if I need to change the payment amounts? I was hoping to get some of the small ones paid off and then work on the larger amounts….”

  “You can make changes—within the coordinated election period. During the coordinated election period, you can change the amounts of the payments that are going to creditors, add creditors, remove creditors….”

  “The coordinated election period,” Kris repeated, while thinking that it was very ironic that she was now stuck in a system modeled after the Medicare program that the government supposedly wanted to fix. “How often
is that?”

  “Every six months a new coordinated election period opens for fifteen days. Any changes that you want to make can be made only during that time. Is there anything else?” The clerk actually looked up at her this time. Kris glanced down at her watch. Class would start again in less than five minutes. She was still so confused, but there was no more time to ask any questions. Grabbing the forms, she stuffed them into her purse and headed back to her class. Janice glared at her as she walked in about two minutes late.

  Kris finished the rest of the day sitting quietly and making notes without asking any more questions. The strong anti-capitalist tone of the sessions bothered her some—more than she cared to admit. On the other hand, she needed this job, and she could not afford to get into a personal disagreement about how the world ought to be. Maybe just sitting quietly and listening and learning was her best course of action for a while.

  The next morning’s training focused on the psychology of aging. Janice had a Power Point presentation and some videos which outlined the major psychological and social problems faced by retirees. Kris had always enjoyed psychology; she hoped to find this training session a little more engaging.

  “You know,” Janice began, “in the U.S. we think of everything in terms of money. How much does it cost? How much do we save? But when we are talking about retirement and the needs of our senior population, there are many issues that have been completely ignored with regard to health and safety.

  “According to statistics from the American Psychological Association, twenty percent of people over fifty-five suffer from a mental disorder. When we look at nursing home residents, that number is actually two-thirds. But less than three percent of this population seeks help from mental health professionals.

  “Twenty percent of older Americans suffer from depression, and older Americans account for twenty percent of all suicides. In fact, older Americans have the highest suicide rates of any population group—even higher than teenagers. Substance abuse is a huge problem for this demographic—we estimate that seventeen percent of older Americans abuse alcohol or drugs. What we find is that as people age, they often become lonely, either as a result of a loss of a relationship through death or divorce, or they experience the depression that can come with retirement. When these life-altering changes occur, people who once just drank socially often become heavy drinkers. Alcohol abuse is one of the eight leading causes of death among seniors.