Phillip Q. Shrotman


Financial Drawbacks Of Aging

Although I recognize that the alternative is much worse, getting older is for the birds. I hate the word “senior.” I do enjoy senior discounts, but can gladly renounce them for just a small amount of real respect – and that includes in financial matters.

First, it seems there exist magic ages when your faculties diminish in the eyes of everyone in the world yet you remain completely unaware of the transition. Age 50 is the initial decrease, according to I don’t know who. Or maybe it’s the Internal Revenue Service, an agency not known for generosity, which when you flip the half-century mark suddenly lets you can kick extra money into a traditional individual retirement account.

That’s the taxman’s way of telling you the clock now truly ticks, I guess.

On the other hand, the AARP people believe life begins at 50. They also seem to believe that I was born stupid. For example, signing up for AARP’s many services, from insurance to hotel discounts, ignites a long series of dispiriting solicitations. I requested information regarding auto insurance many years ago; I found the information useless but AARP pesters, annoys and depresses me about the subject to this day.

When you hit 59½, you can start to tap your various tax-deferred retirement plans, such as your IRA or 401(k), without the 10% penalty for premature distribution. If you attempt to use plan money prior to that magic age, taxes and penalties can cost more than 40% of your nest egg, especially in a state like California, where I live. And who is the "joker" who picked ages 59 1/2 and 70 1/2 for access and forced withdrawal from IRA plan and the like. What's wrong with age 60 and 70? If you were born in the month of July or later in the year, it just creates unnessary confusion.

Next big age is 62, when your employer joins the lynch mob: “Why don’t you think about retirement,” your employer will seem to say, “so we can replace you with someone younger and, let’s hear it, cheaper.”

At 65 to 66, the plus becomes Medicare. The minus? If you make a financial decision, people call your mental capacity into question, as if to say, “Why are you bothering anymore?” If you purchase life insurance or any type of annuity that insures a future payout, your sanity appears suspect.

Yes, I’m aware that scammers target seniors with all sorts of unnecessary and impractical financial instruments – but not this senior. Are these ages milestones or tombstones?