Americans can be too fond of personal debt. Kavanaugh in 2016 reported debt accumulation of between $60,000 to $200,000 thanks to buying Washington Nationals season tickets with three credit cards and a personal loan. According to the findings, unlike most of us, the debts and loan were retired in 2017.3
Long before college costs (and college loans), many parents pay for private school. The Kavanaugh girls may attend Blessed Sacrament School, where the tuition for Catholic students is around $10,000 a year.4 Third, like most of us, the family seems to be spending everything they earn. Wife Ashley earns $66,000 as the town manager and Brett Kavanaugh earns $220,600 by working as an appeals court judge for the District of Columbia Circuit.5 By becoming a jurist on the Supreme Court Kavanaugh’s annual take home pay will increase to $255,300.6
Things may change dramatically by comparison when it comes to retirement. In the same law that put the number of justices at nine, the Judiciary Act of 1869 the United States Congress established the retirement for Supreme Court justices at full salary.9 Note: The birth and death registration was not fully national until 1933, so there is no national life expectancy data for the 19th century. There is an estimate that life expectancy was 37 at that time. Robert Longley, ThoughtCo. put it this way, “Retiring U.S. Supreme Court justices are entitled to a lifetime pension equal to their highest full salary. In order to qualify for a full pension, retiring justices must have served for a minimum of 10 years provided the sum of the justice’s age and years of Supreme Court service totals 80. Supreme Court associate justices who decide to retire at age 70, after 10 years on the job, or at age 65 with 15 years of service is eligible to receive their full highest salary – usually their salary at retirement for the rest of their lives. In return for this lifetime pension, judges who retire in relatively good health with no disabilities are required to remain active in the legal community, performing a minimum specified amount of judicial obligations every year.”8
Congress determined that all federal judges are to be appointed for life and well paid. A lifetime pension with full salary encourages early retirement as opposed to serving through periods of failing health or looming senility. Supreme Court justices, thanks to the security of lifetime terms are free to make decisions without fear of losing their jobs, unlike other bureaucrats or any of the other people appointed by a president.10 If confirmed, today at age 53, Brett Kavanaugh will have well planned his financial success. That’s the good news for Kavanaugh and his family.
Here is what we can learn. In the event of another downturn, pay off loans now to keep debt from becoming a disaster. A home, no matter how beautiful, is a use asset, not an ATM machine. At some point the paychecks stop, sometimes earlier than imagined, so it becomes necessary to spend from savings and investments to maintain your lifestyle. Let’s agree that the chances of being crowned with a lifetime pension at 100% of current earnings are not favorable. Take the time to determine how much you need to contribute over what period of time with a reasonable return expectation to see what it takes for you to successfully make work optional. Complacency can be costly. Take the time now to plan your financial success.Sources:
1The Washington Post
2The Center for Public Integrity
5The Washington Post
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