Social Security, FDIC, The New Economy, Baby Boomers, It's A Wonderful Life Movie

One of my favorite movies, especially at Christmas, is Frank Capra's It's A Wonderful Life with Jimmy Stewart and Donna Reed.  In 2003 I taught economics to English language learners (ELLs) at a high school in Elgin, Illinois, and we watched It's A Wonderful Life for almost two weeks.  The movie shows various times in American history--the end of World War I, the Great Depression, runs on banks, World War II, and life in small town America.  The Federal Deposit Insurance Corporation (FDIC), an independent organization, was created by the U.S. Congress in 1933 "in response to the thousands of bank failures that occurred in the 1920s and early 1930s."  (Source:  http://www.FDIC.gov)  The movie also featured the role of the Savings and Loan institutions and their relationships with banks.  This relationship played out in 2009 when Washington Mutual was purchased by J.P. Morgan Chase. 

The Social Security Administration was also started after World War II.  Baby Boomers (babies born between 1944 and 1960) are a large demographic unit and have contributed money all of their working lives to the Social Security trust fund.  Fewer workers will be paying into the fund when the baby boomers retire--as many are starting to do now.  Congress has tapped into this fund and has drawn down its reserves.  There is concern that Social Security funding will be tapped-out by 1937--according to a media report I heard last month on ABC.

In the new economy ("after the great recession" [AGR]), baby boomers turning 62 are finding it difficult to keep or to find jobs that pay the salaries they need to pay mortgages, car payments, insurance, etc.  Many companies, while not claiming to discriminate against baby boomers, are offering salaries that are half or less of what baby boomers were getting for the same or similar jobs a few years ago.  Others are requiring specialty skills or training or experience that came after baby boomers earned their degrees.

Taking Social Security early results in a lower monthly payment--with everything adjusted based on individual contributions to social security.  People under full retirement age (66 for many baby boomers) may earn $14,140 per year before having their social security income adjusted.  If they earn more, any adjustments may come back to them when their social security benefits are reconfigured at full retirement age.

The point is this, by taking early retirement (social security) and working, baby boomers may be able to take jobs that pay half as much as they were used to because, with the social security income, they can still pay their bills.  When they reach full retirement age, they can earn as much as they want without a negative impact on social security benefits.

Double check everything in this post with Social Security.  It is as accurate as I can make it as of the date of posting.