Seniors & Cost of Living
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This has been a somewhat re-occurring theme of my recent posts, but I am becoming really bothered about a trend that I have become aware of on a personal level. My mom passed away recently, so I have had an opportunity to converse with many of her friends and relatives that I haven't talked to in 10 years or more.
Today I had a conversation with an 86 year old lady that worked at the King County Assessors Office in Seattle for more than three decades. She is impressive for her age. She is single, has few local relatives, still lives independently, still drives her 23 year old Volvo, does volunteer / charity work, and is proud of her 1000 sq ft garden in which she grows vegetables and then donates. She has an apartment on Boston Street that she has had for many years. Can you guess what her biggest worry is now? Her landlord just raised her rent $400 a month. She was very upset. She told me that there was no warning that a rent increase was forthcoming. Us younger bubbleheads may bitch about the real estate market, but I believe that some seniors are being pushed to desperate situations. Proud seniors who have worked all of their lives are not the type to complain about their personal financial problems, so this is a "quiet" issue. I predict that cost of living issues for seniors in Seattle will become a increasing problem in the near future.
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This has been a somewhat re-occurring theme of my recent posts, but I am becoming really bothered about a trend that I have become aware of on a personal level. My mom passed away recently, so I have had an opportunity to converse with many of her friends and relatives that I haven't talked to in 10 years or more.
Today I had a conversation with an 86 year old lady that worked at the King County Assessors Office in Seattle for more than three decades. She is impressive for her age. She is single, has few local relatives, still lives independently, still drives her 23 year old Volvo, does volunteer / charity work, and is proud of her 1000 sq ft garden in which she grows vegetables and then donates. She has an apartment on Boston Street that she has had for many years. Can you guess what her biggest worry is now? Her landlord just raised her rent $400 a month. She was very upset. She told me that there was no warning that a rent increase was forthcoming. Us younger bubbleheads may bitch about the real estate market, but I believe that some seniors are being pushed to desperate situations. Proud seniors who have worked all of their lives are not the type to complain about their personal financial problems, so this is a "quiet" issue. I predict that cost of living issues for seniors in Seattle will become a increasing problem in the near future.
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Comments
Paying $7k a year for housing isn't a big deal if you've got a rising income, but it is a problem if you have a fixed income and expect to pay $1k for the year.
The only thing I disagree on is that it will be a silent problem. Many seniors own their home (as in actually paid off) and it isn't until their taxes increase that the housing bubble directly effects them. Perhaps it just takes longer for tax increases to move through the system than it does for the other effects of the bubble.
I freakin' hate the term "Senior", btw. Not sure what I'd want to be called (fogy? Oldster? Human?) when I get to my golden years, but I generally only hear it when the group is trying to be pandered to and it sounds like they are about to graduate from HS.
Age-challenged, maybe.
Given that the ancient, on average, have gobs of time on their hands and tend to vote and bitch and a higher rate then the "Juniors" who are more busy, their views are generally over-compensated for in general, I tend to think. Health care and food costs are a much bigger problem than property taxes, I would guess.
Rent, on the other hand, is a legitimate problem. That's an issue that should be addressed if we don't want to force those on a low fixed-income out of the city. Dunno about the details of how well SS benefits are indexed to inflation and whether that keeps pace with rents.
http://www.metrokc.gov/ASSESSOR/Exempti ... tions.html
Do you really think the views of "the ancient" / seniors / those of their golden years are over-represented? I don't know if I agree. These are the people who are often intimidated by such new-fangled stuff like computers and the internet. It's been my experience that many of them feel isolated and a bit frightened by the changing world around them. My impression is that most of the "oldsters" are just trying to hold on to the modest lifestyle that they have been able to maintain up to now. I've seen the little old lady decide not to buy the half-gallon of milk at Fred Meyer because she can get it for 27 cents cheaper at the store a half block away. I've seen "grandpa" happy that he scored a double coupon discount on that off-brand orange juice. These are the people who are the least adaptable to changes in our society and some of them are being significantly impacted by the recent price increases in non-discretionary expenses.
In King County, I just don't think that there are a whole lot of folks who qualify for this. If we value living with diversity, then poorer old people are part of the great mix. Otherwise, we risk living only amongst 30 somethings who write code.
That voting is stronger among older people isn't really up for debate.
Census.
I don't know the situation here, but I do have to wonder why this person didn't buy any real estate in those 86 years. Why is she renting? I can imagine that they maybe sold a house and moved into an apartment or something, but wouldn't the prudent thing have been to buy a condo? OK, now's not a good time to buy, generally, but perhaps some time in the last thirty years might have presented rich pickings in condo-land?
I don't disagree that $400 a month is an insane increase, however. Assuming she's not getting screwed on the new rate, she'll have to move and be thankful that she was able to rent for significantly less than market rate for many years prior. If she *is* getting screwed on the rent, she'll have to leave or negotiate. Either way, that does suck.
"Yesterday, I heard a radio call about a very similar issue. The caller's mother's property had been reassessed from a $60k home to a $800k home, and with it the property taxes were set to increase like 10-fold."
This strikes me as a similar situation. Either (a) the new assessment is high, in which case you *can* appeal although I bet it's a hassle, or (b) the homeowner was getting away with stupidly low real estate taxes for many years and they were being subsidized by their neighbors. This is because the county sets the *overall* tax revenue they want to pull in and then splits that amongst the property owners using the assessed value as the portion of tax that an individual property will pay.
"Many seniors own their home (as in actually paid off) and it isn't until their taxes increase that the housing bubble directly effects them. Perhaps it just takes longer for tax increases to move through the system than it does for the other effects of the bubble."
There is a gross misunderstanding that if the value of your house goes up, say, 10%, so will your taxes. After all, the tax man said my tax rate was 1.1% and therefore a 10% increase will increase my taxes linearly, right? Wrong. Every year, powers beyond your control decide on the overall tax revenue they want, from everyone, in total. The increase in this amount is restricted by law. I think it's 2%, but there are some exceptions here and there I think. Then your particular house is assessed in value, which happens every so often. I'm not sure on the formula there. Regardless, if everyone's house went up 100% in value in one year, and the *overall* revenue your taxing district wants increased 2%, then your taxes will go up 2%.
If, however, you double the size of your house, add a bathroom, or do other things that mean the value of *your* property doubles in comparison with the stagnant values around you, then your taxes will double, plus the 2% increase.
"That voting is stronger among older people isn't really up for debate."
Agree. Why, for example, do we continually vote down increases in taxes to pay for schools? Could it be because the majority of people that vote are older and are less likely to have school age children? I think so...
"No doubt it's tough to be poor. Doubly so if you are old and poor."
Agreed. I think the biggest burdens for the elderly are the cost of food and energy, and possibly healthcare if you need something medicare won't provide. Luckily, social security benefits are linked to the core rate of inflation. So as long as you don't eat, drive, heat your home, or otherwise consume energy, your social security check will keep you in the lap of luxury!
Old people of Seattle, stop eating, and wear more fleece!
A number of seniors have left places like Ballard not so much because they died as much as they couldn't afford to live there any more, including their skyrocketing property taxes. Some of these folks had lived in their houses for 30-40 years +.
How should we ease the burden of poor seniors without giving them a property tax exemption?
...I don't know the situation here, but I do have to wonder why this person didn't buy any real estate in those 86 years....
You make an excellent point Notabull. We all have to deal with the long term consequences of financial decsions we make. In this particular case, I would agree that she should have bought a condo / house a long time ago.
It is a bit more complex than that. When you base the increases on Sales tax, no one, especially Seniors are going to approve it. Most people-- singles, seniors, childless couples, etc recognize the common need to support schools. However, WA State was resisting, until fairly recently, any increases in K-12 funding, especially during times of surplus.
Often, raising taxes is not the answer. Reallocating what already exists can do the job, provided other basic services are not negatively impacted. School funding became a game of budget chicken. The state finally blinked a little.
My mother is in her mid-60s and has never owned for one simple reason -- she has never had the money. There's a non-insignificant number of people that simply don't make enough to buy real estate. They are called "poor", or increasingly, "middle class".
Maybe she was a bitter-renter-bubble-blogger who got priced out forever before her time.
LHR - Any of my previous comments were not meant to show disrespect toward people like your mom. My 86 year-old acquaintance is different from your mom in that she did have the resources to buy a place when she was working, but she chose not to. She was a bit radical for her age group in that she chose to remain single and I believe her thinking was that as a single woman she did not want to be "tied down" with owning real estate.
I'm certainly glad these type resources are available.........
Low-Income Senior Housing: How It Works & How To Find It
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Growing Deficits Threaten Pensions
The funds that pay pension and health benefits to police officers, teachers and millions of other public employees across the country are facing a shortfall that could soon run into trillions of dollars....
.....By their own assessment, state and local governments acknowledge that their funds for retiree benefits are increasingly falling behind, with the number that are severely underfunded soaring to 40 percent in 2006, a five-fold increase from 2000, according to the U.S. Government Accountability Office....
.....For public pension funds, a nonprofit body called the Governmental Accounting Standards Board sets guidelines but has no power to enforce them and little incentive to confront the states and localities that finance its budget. So some states, pension analysts said, have adopted accounting techniques motivated more by politics than prudent financial considerations.....
......Most public pension funds limit their contributions by assuming their investments will grow between 7.5 percent and 8.5 percent a year.
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"While anything is possible, does anyone really believe this is the most likely outcome?" Buffett wrote in the most recent annual report his firm, Berkshire Hathaway. Buffett is also a Washington Post Co. director.
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A growing number of leading investors are warning that the return rates used by state and local governments are unreasonably optimistic. Buffett, for one, has pointed out that over the 20th century -- when the Dow Jones Industrial Average soared from 60 points to 13,000 -- the stock market produced a 5.3 percent annual return for investors. Over the next century, the Dow would have to explode to 2.4 million to produce a similar rate of return.
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Yet even that would be less than the rate of return commonly projected by public pension funds....
In my mind, that's the proper way to think. Imagine how you would like to be treated, and that's how we should treat everyone so long as it is economically possible. This is the same issue in my mind as universal health care. I have coverage right now, but I support some level of universal coverage because I feel sorry for the people who don't, and I want to think if I lost my job and coverage that others would return the favor.
Or, we can just be militant capitalists who flip-off anyone who can't afford to survive. I just like to think that we as a society are better than that.
comment deleted by TJ_98370
If someone bought their house 50 years ago, and raised their kids there and entertained their grandkids there and baked cookies there, should we just say " it's fine for them to move someplace less expensive because they can't afford their property taxes."?
Yes, social security is screwed up, and needs changes because a lot more is going out than is coming in. But there are some old folks who subsist solely on social security. Should we soylent green them, as well as all those "useless" poor people?
I am going to add one caveat to this line of reasoning however. I think that we shouldn't always do everything possible to extend a life, and I think this is a question of economics. Let me rephrase this again in how I hope to be treated, and then extend it.
Let's say I had a cancer that is 100% fatal. With no treatment, I am expected to live 6 months, with normal treatment (say some chemotherapy or something) I can expect to make it 1 year, and with some exotic therapy I might make it 15 months. The disease is fatal, and 1 year is pretty good. I would not want my family mortgaging everything they owned to get me that exotic therapy, but it might be worth cashing out a significant portion of my nest egg for the standard treatment. I think as a society we need to provide that standard treatment level of care as best as we can to everybody.
E.g. every American should be immunized and have access to mainstream medication. It's absurd to name ourselves the wealthiest nation every and not provide this level of care. On the other hand, the majority of health care costs are incurred at the very end of life, and as a society we need to allocate resources in a way that provides the most bang for our buck.
For instance, let's say we could put $500 billion towards prolonging the life of every 70 and older person by 6 months. Or, we could use that money to drastically reduce carbon emissions and lengthen the life of everyone 18 and younger by 18 months. How do you allocate the money?
It's obvious that the middle class can be greatly strengthened, when some people made more money in the time that you read this post, than you'll make all year. History shows that society does not crater when the highest tax rate is, say, 70%. The Beatles paid 70+% in taxes at one point, yet they kept on producing. (I think Ayn Rand's theory is a bill of goods that one political party loves for you to believe.)
The old folk today should not be left in the gutter. But neither should they be subsidized so they can continue living in an expensive city they can no longer afford.
Facility Trying To Evict 99-Year-Old Woman
SUMNER, Wash. -- A 99-year-old woman whose health is declining is being threatened with eviction from the assisted living facility where she has lived for the last decade because she switched from Medicare to Medicaid, reported KIRO 7 Eyewitness News.....
The question about that highest tax rate is "who pays it?".
In England back in those days, you really didn't have to earn much money to pay that kind of tax rate. Hell, when I left England I was earning an "ok" amount of money and paying a 40% tax rate (without the additional 10% equivalent of social security/medicare). Back in the 60s and 70s, England was a pit of unemployment and general misery. If anything, that made for a lot of good music... Misery and free time can be inspiring.
When I read about people earning $100M a year, or the Simpson's voice talent earning $400K an episode (or whatever the new deal is), it makes me sick. It's disgusting that there are so many people out there that earn MASSIVE amounts of money and so many that are barely getting by.
I don't know why we don't have a 90%+ tax bracket on household income over $1M (or 500K, or whatever). I'd be totally fine with some stupid movie star earning $20M a movie if I knew that $18M was coming right back in taxes. Let's call it the "top 1%" tax. I know that if I ever got to that point of income (which I likely won't) then I'd be so fortunate that I'd be happy to pay that tax. Perhaps "happy" is the wrong word, but I'd certainly feel obligated and feel that it was the RIGHT thing to do.
I think we forget that income tax was originally invented to tax EXCESS wealth, not regular people's income. When people in this country realize that the squeeze on the middle class is real, and that they are paying more of their income on taxes than they were in years prior when compared to the wealthy, maybe eventually they'll stop voting for tax cuts they'll never benefit from.
Hell, I'm not even *in* the middle class (I likely earn too much) and I'm still very angry about the situation. I wonder when people will actually "vote for change".
Here's how tax laws should be structured. All incomes from previous X years (where X is small, like 2) are analyzed. The pool from the previous year is split into percentiles, and from that pool, actual dollar figures for each percentile are calculated. If the top 1% earned over $1m a year the last two years, then that dollar figure is how we determine what the top 1% is.
Then, all the tax brackets get tied to percentiles instead of dollar figures. Each year, the IRS sends out a single sheet showing where the percentiles line up that year, and you take your adjusted income and compare to figure out your rate. It's a simple solution, the math involved is trivial with modern computers, and it means legislature wouldn't have to harangue over tax rates from year to year.
Of course, we'll never pass law like this, because...I frankly don't know why not.
But the majority of Americans clearly want the rich to get richer at an accelerating pace, at the expense of everyone else and future generations. They want big tax cuts for the rich, even if that means borrowing $trillions. At least that's how they consistently vote.
I know that comment was meant as sarcasm, but there might be some truth to it. For some reason, many people derive some satisfaction out of other people doing extraordinarily well. I think it's kind of a fantasy game. If you can imagine what you would do with Kevin Garnett money, it helps you forget that you can't sustain your current standard of living.
....the majority of Americans clearly want the rich to get richer....
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I remember watching a TV interview of some congressman many years ago and during the interview he actually said that any proposed legislation to increase taxes on the "rich" would be unpopular with the middle class. I remember reacting with total disbelief. The congressman went on to explain that many middle class Americans firmly believe that they have the right to be rich and they want that right protected. - Interesting perspective.
The congressman bolstered his credibility (maybe just with me) by mocking that type thinking, and by elaborating on the point that most of the "right to be rich" supporters had a very slim chance of ever being rich themselves.