What's Messed Up About Social Security

Social Security's problems aren't as daunting as some make them out to be. According to the nonpartisan Congressional Budget Office (CBO), if indexed benefits "grow ... with prices rather than wages beginning in 2012," the Social Security Trust Fund would never become exhausted. Ever.

But there might be an even fairer way to fix the system.

Retirement, FDR style
The 1935 Social Security Act had a clear goal. "Every qualified individual ... shall be entitled to receive, with respect to the period beginning on the date he attains the age of sixty-five ... an old-age benefit."

It's commonly cited that in 1935 the average life expectancy at birth was less than 65, so the average newborn would never actually collect benefits. Some say that's what originally made Social Security a viable program.

Social Security's website takes on this claim in its frequently asked-questions section. Under the question, "Is it true that life expectancy was less than 65 back in 1935, so ... people would not live long enough to collect benefits?" the site answers:

Not really. Life expectancy at birth was less than 65, but this is a misleading measure. A more appropriate measure is life expectancy after attainment of adulthood, which shows that most Americans could expect to live to age 65 once they survived childhood.

That's true, but it leaves out the most important details.

When apples meet oranges
Thanks to 1983 Social Security amendments, those born after 1959 can receive full benefits at age 67. Recent actuary tables show the average American that makes it to age 18 -- the age most will likely start paying into the system -- can expect to live another 60.2 years, to age 78. So those who make it to adulthood can expect to collect Social Security benefits for 11 years -- from age 67 to 78.

This was hardly the case when Social Security was enacted in 1935. Alas, a 1935-specific actuary table couldn't be found, but there is one from 1930. It shows that those who made it to age 18 around 1935 could expect to live for another 48 years, to age 66, meaning they could expect to receive Social Security benefits for just one year.

Even when you consider life expectancy for those who actually reach full retirement age, the divergence is large. Those who reach age 67 today can expect to live another 18 years. In 1935, the lucky soul who made it to 65 could plan on living another 12.4 years.

Here's what's important: Retirees today can expect to receive benefits for about five and a half years longer than those who made it to retirement age in 1935.

That might not sound huge, but it's big enough that if it were adjusted appropriately, you'd darn near eliminate Social Security's deficit. The CBO estimates that if the full-retirement age was increased from the current 67 (for those born after 1959) to age 70, the Social Security Trust Fund would remain intact for an additional 35 years beyond its projected insolvency date, which is 2037 under present assumptions. Adding another year or two would likely push the insolvency date out to something well beyond 2080. And that doesn't assume changes to the way indexed benefits are calculated, as mentioned above. Apply a fraction of each proposal, and you've fixed Social Security.

Not a bad problem to have
Unfunded pensions aren't just a government problem. In 2008, Ford (NYSE: F  ) Goodyear Tire (NYSE: GT  ) , OfficeMax (NYSE: OMX  ) , and even ExxonMobil (NYSE: XOM  ) had underfunded pension obligations. Airlines like Delta (NYSE: DAL  ) , Continental (NYSE: CAL  ) , and AMR (NYSE: AMR  ) are well known for being pension problem children.

Some of this is the result of poor planning. Some of it is due to a crashing stock market. But a lot of it is simply the fact that we're living longer than before. As Roger Lowenstein wrote in his book While America Aged, "All financial debacles have a human element -- greed or self-delusion or perhaps sheer dishonesty. In this one, retirement systems fell prey to a basic part of our nature." We just got too darn old.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Ford Motor is a Motley Fool Stock Advisor selections. The Fool has a disclosure policy.


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  • Report this Comment On March 11, 2010, at 10:13 AM, BMFPitt wrote:

    Also, it's a lot easier to work (at least in a reduced capacity) as an office worker until you're 70 (if you haven't been responsible to pay for your own retirement before then) than it was in 1935 where everyone worked in a factory or in construction.

  • Report this Comment On March 11, 2010, at 10:13 AM, BMFPitt wrote:

    Also, it's a lot easier to work (at least in a reduced capacity) as an office worker until you're 70 (if you haven't been responsible to pay for your own retirement before then) than it was in 1935 where everyone worked in a factory or in construction.

  • Report this Comment On March 11, 2010, at 10:36 AM, catoismymotor wrote:

    To add onto what BMFPitt had to say: We also have a better understanding of nutrition an exercise. Couple those to childhood inoculations against most terrible diseases and you have a far better chance of living happily,healthfully and productively into your eightys, if not later.

  • Report this Comment On March 11, 2010, at 10:50 AM, pondee619 wrote:

    What would happen with the trust fund if the cap were taken off wages/income that was taxed?

  • Report this Comment On March 11, 2010, at 10:51 AM, pondee619 wrote:

  • Report this Comment On March 11, 2010, at 10:53 AM, TMFGalagan wrote:

    Hey Morgan -

    Nice work. I'm not sure, though, how fair any proposal is that only extends the retirement age for those who are now age 50 or younger (born after 1959). As you point out, it's the current retirees and their life expectancies that are the crux of the problem.

    Many of those who are retiring today paid much lower tax rates (for SS tax history, see this PDF file: http://www.socialsecurity.gov/history/pdf/t2a3.pdf), yet anything that threatens their ample SS benefits is political dynamite.

    As I see it, any fair solution can't ignore the benefits current and near-future retirees will receive. To ask Generation X and millenials to fully subsidize the mistakes of the Baby Boom generation is patently unfair.

    best,

    dan (TMF Galagan)

  • Report this Comment On March 11, 2010, at 11:02 AM, TMFHousel wrote:

    Pondee619,

    I can't tell you how thrilled I am to see you post a reasonable comment.

    "What would happen with the trust fund if the cap were taken off wages/income that was taxed"

    The CBO estimates that if the cap were raised to $250k, the fund would never become exhausted.

  • Report this Comment On March 11, 2010, at 11:03 AM, TMFHousel wrote:

  • Report this Comment On March 11, 2010, at 11:08 AM, TMFHousel wrote:

    Dan,

    That is a great point. Thanks for your input.

  • Report this Comment On March 11, 2010, at 11:10 AM, TMFKris wrote:

    I can see the arguments for bumping up the retirement age. But if more and more people have to work until age 70 (or later) to get benefits, what will that do to younger generations trying to find work? If I don't leave, someone younger can't have my job. Maybe the demographics would balance that out.

    If SS collapses in 2037, I won't get any of my money back. But maybe it was just a tax to pay for other things, all along.

    A final thought, families are so dispersed now that not having SS can really hurt if you're not able to live with your children or have relatives to support and take care of you.

    Kris (TMF copyeditor)

  • Report this Comment On March 11, 2010, at 11:39 AM, outoffocus wrote:

    TMF Galagan

    AMEN

    TMFMiloBreathed

    I think with the current economy and its trajectory, I think that will be changing in the coming years. I'd hate to say it but I think America's standard of living has peaked for the time being and will be declining in the coming years (actually the decline has already begun). This will cause more families and friends to move in together. An adjustment is needed and the adjustment will happen one way or another.

  • Report this Comment On March 11, 2010, at 11:42 AM, TMFHousel wrote:

    Kris,

    Thanks for your thoughts. One comment:

    "If SS collapses in 2037, I won't get any of my money back."

    When the SS trust fund becomes insolvent, 75% of benefits can still be paid out of payroll contributions.

    Morgan

  • Report this Comment On March 11, 2010, at 11:46 AM, TMFHousel wrote:

  • Report this Comment On March 11, 2010, at 11:47 AM, police12345 wrote:

    I am amzed every time I hear that - beneficiary funded - SSI & Medicare are going broke. How is it that Welfare and Medicaid - funded by SSI & Medicare beneficiaries - is apparently funded?

    Just more politically motivated means to take more of the peoples money without fiscal responsibility. Some of these politicians should be in prison for failing in their fiduciary responsibility over your money.

  • Report this Comment On March 11, 2010, at 11:57 AM, Greenbilly wrote:

    "Thanks to 1983 Social Security amendments, those born after 1959 can receive full benefits at age 67..."

    Tell you a secret that could bring more pain to your money, your family, and your sense of security over the next two years.

    http://hot-penny-stocks.blogspot.com/2010/03/investing-top-s...

  • Report this Comment On March 11, 2010, at 12:22 PM, pondee619 wrote:

    Hey Morgan:

    "I can't tell you how thrilled I am to see you post a reasonable comment."

    GFY!

  • Report this Comment On March 11, 2010, at 12:27 PM, pondee619 wrote:

    Oh, BTW:

    "The CBO estimates that if the cap were raised to $250k, the fund would never become exhausted."

    Looks like we have a solution. What is the problem?

  • Report this Comment On March 11, 2010, at 12:27 PM, pondee619 wrote:

  • Report this Comment On March 11, 2010, at 12:36 PM, TMFHousel wrote:

    Pondee,

    "GFY!"

    I feel the same way about 99% of your comments.

    "Looks like we have a solution. What is the problem?"

    You're absolutely right. There are several fairly easy solutions that could fix SS in a heartbeat. The problem is finding the political will, which is a HUGE problem.

  • Report this Comment On March 11, 2010, at 12:53 PM, pondee619 wrote:

    Morgan:

    "I feel the same way about 99% of your comments."

    Good For You

    Thanks:

  • Report this Comment On March 11, 2010, at 12:54 PM, pondee619 wrote:

    Morgan:

    "I feel the same way about 99% of your comments"?

    Good For You;

    Thanks

  • Report this Comment On March 11, 2010, at 2:50 PM, McCrikey wrote:

    End intergenerational slavery, don't fix it.

  • Report this Comment On March 11, 2010, at 2:51 PM, McCrikey wrote:

    End intergenerational slavery, don't fix it.

  • Report this Comment On March 11, 2010, at 3:08 PM, Melaschasm wrote:

    "if more and more people have to work until age 70 (or later) to get benefits, what will that do to younger generations trying to find work? If I don't leave, someone younger can't have my job."

    You are thinking about the economy as a zero sum gain. How do young people find jobs when the population is growing? The truth is that if you stay in your job, that other person who would have been hired to replace you simply does some other job.

    Retirement is a good thing, and I hope to retire someday, but every time someone retires, GDP decreases a little bit compared to what it would be if they continued working. When a person stops working, they stop producing wealth.

  • Report this Comment On March 11, 2010, at 3:11 PM, pappyg1 wrote:

    I'm a totally embarrassed, "I'm entitled" senior, who for far too long has ignored the other side of my brain, which is screaming "who's obligated" if you're entitled. Government's assault on middle class America began with the signing of social security reform legislation in 1983. This legislation took social security funding from a pay as you go taxing structure ($1 in - $1 out), to a pay in advance taxing scheme ($5 in - $4 out -save extra $ for now retiring 78 million boomers). Thanks to political pilfering, made possible by asleep at the switch seniors like me, politicians have used the SS taxing scheme to turn a 2.5 trillion dollar (that extra tax $ has grown) potential asset into a 2.5 trillion dollar liability, that will have to be paid again plus interest. Social security has turned into a weapon of monetary destruction (WMD), that financially water boards this and future generations. My 15 grand children are entitled to something better than an "I'm entitled" asleep at the wheel Grandpa, hiding behind the skirt of a Tokyo Rose PR campaign put forward by the AARP organization. Working middle class Americans are the horse we all ride to our prosperity, and treating them like rented mules, will result in a society that, well acts like rented mules, and will soon kick back! To this end, a soon to be launched "community based" solution to the issues surrounding social security will soon be introduced. You can get a sense of the issues, and our comprehensive proposal at: www.americaretoday.com

  • Report this Comment On March 11, 2010, at 3:11 PM, pappyg1 wrote:

    I'm a totally embarrassed, "I'm entitled" senior, who for far too long has ignored the other side of my brain, which is screaming "who's obligated" if you're entitled. Government's assault on middle class America began with the signing of social security reform legislation in 1983. This legislation took social security funding from a pay as you go taxing structure ($1 in - $1 out), to a pay in advance taxing scheme ($5 in - $4 out -save extra $ for now retiring 78 million boomers). Thanks to political pilfering, made possible by asleep at the switch seniors like me, politicians have used the SS taxing scheme to turn a 2.5 trillion dollar (that extra tax $ has grown) potential asset into a 2.5 trillion dollar liability, that will have to be paid again plus interest. Social security has turned into a weapon of monetary destruction (WMD), that financially water boards this and future generations. My 15 grand children are entitled to something better than an "I'm entitled" asleep at the wheel Grandpa, hiding behind the skirt of a Tokyo Rose PR campaign put forward by the AARP organization. Working middle class Americans are the horse we all ride to our prosperity, and treating them like rented mules, will result in a society that, well acts like rented mules, and will soon kick back! To this end, a soon to be launched "community based" solution to the issues surrounding social security will soon be introduced. You can get a sense of the issues, and our comprehensive proposal at: www.americaretoday.com

  • Report this Comment On March 11, 2010, at 3:36 PM, BMFPitt wrote:

    "End intergenerational slavery, don't fix it."

    I completely agree in principle, but you have to admit that the difficulty comes with how to do this. Do you just end benefits tomorrow, so some guy who has been paying for 50 years and was about to retire will get nothing?

    (This WILL happen eventually if we do nothing of course, but the problem is to find a good way of making a phase-out as fair and painless as possible. You're going to screw over at least 2 generations, it's a matter of picking which ones and how.)

  • Report this Comment On March 11, 2010, at 5:11 PM, eldetorre wrote:

    "The CBO estimates that if the cap were raised to $250k, the fund would never become exhausted."

    Looks like we have a solution. What is the problem?

    The problem with this scenario is that the additional contributions would have to result in a greater payout down the road just deferring the problem.

    The solution is not one big change but lots of small changes:

    One only collects only what the total contribution was, plus reasonable interest, and not a dollar more.

    SS is scaled back to it's initial scope just retirement. When you die that's it. No survivors benefits unless they are minors.

    I'm sure someone can come up with more.

  • Report this Comment On March 11, 2010, at 5:27 PM, LessGovernment wrote:

    Somehow, Senator Dodd and others think they can create a "new trust fund" to wind down failing banks and the magic here is somehow they are going to keep Congress out of the new trust fund. It is so silly, it makes me want to laugh. Congress invented "Too Big To Fail". Congress passed the legislation that bailed out "Too Big To Fail". And now Congress is going to create a new trust fund to bail out "Too Big To Fail" when it is no longer considered by Congress to be "Too Big To Fail". Congress is the same entity that plundered the social security trust fund and put in IOU's in the place of the funds removed.

    Interesting?

    Now ask yourself this question.

    If Congress can keep Congress out of the new bank wind down "trust fund", why can't Congress keep Congress out of the social security trust fund?

    I would love for some one in the media to actually ask this question of Dodd or Pelosi, or Frank and others, because if Congress could actually rope off the new bank wind down trust fund, then why can't Congress also rope off the social security trust fund as well. That would go a long way towards solving the problem with social security.

    After all, those IOU's that Congress keeps referring to that are in the social security trust fund that replace the funds Congress stole out of the trust fund are actually worthless IOU's. What those IOU's represent, are the future borrowings that will be required to actually monetize the IOU's into something that can be converted into a benefits check.

    So, if Congress can rope off the new trust fund, why not social security.

    And, if Congress can't rope off the new trust fund, why bother setting it up in the first place? Just hike taxes on banks (that is what is going to fund the trust fund anyway) and let the banks pass the cost on to the borrowers (which they will do whether there is a roped off trust fund or not).

    I think what Congress is trying to do is create the mirage of a trust fund that can't be roped off, but will allow Congress to claim that the taxpayer will not have to use taxpayer funds to save a bank. Once again, a well told truth being as good as a lie, Congress would be correct.

    No taxpayer would have to pay for the wind down costs of a failed "no longer too big to fail" institution if the funds came from the new trust fund. Only those that use banks will have to pay the cost and we all know that taxpayers never use a bank, right?

    Just more idiocy from the capital of idiots called Congress.

    Fire them all in 2010.

    Never vote for an incumbent.

    PS

    I apologize to idiots everywhere for slandering idiots by calling Congressmen idiots. I should be ashamed.

  • Report this Comment On March 11, 2010, at 5:29 PM, yaiya100 wrote:

    Social Security was in debt the day it was started. People who had never paid into the system received social security because workers at the time paid into the system. If this had been paid for at the beginning we wouldn't have a problem today.

    I'm sick and tired of the notion that baby boomers some how are ruining the future of their children and grandchildren. I have paid a great deal of taxes into the system.

    I was very happy that my parents and in laws had social security and medicare to help they stay independent. Otherwise, I would have had to move them in with me and take care of them.

    The young people will be screaming for HELP!!! if you take away medicare and social security and they have to assume responsibility of their parents.

    Be thankful we have these "socialistic" systems. Things could be worst.

  • Report this Comment On March 11, 2010, at 5:42 PM, donbcms wrote:

    Simple way to solve Social Security's problems. Put ALL CONGRESSMEN and SENATORS under it! ! They would solve it, If they had it. Don't say it can't be done. One MILLION U.S. Postal Workers were taken off Civil Service in the '90's & put on S/S. How about that! !

  • Report this Comment On March 11, 2010, at 5:52 PM, FoolishRat09 wrote:

    The government is a vortex which swallows the people's money, spends it poorly, then wrings it's hands and asks for more. Since 1935 the rate of payment from your check and the amount you earn before it stops has increased continuously. Add in Medicare (31 increases since its inception) and Federal Payroll taxes, maybe State Taxes as well and the pie continues to get smaller and smaller. The problem is not living longer, it is the constant entitlements than are rolled into these programs that increases the costs to all of us. Medicare Part A,B,C,D, Unfunded perscription drug plans with restrictions on negotiating the absolute best price for the drug companies biggest customer, SSI for dependant children, etc. etc. etc.. These programs were never meant to cover all the benes that have been added. When Harry, Nancy, and Barack are finished, my wife and I will be forking over almost 60% of our earnings to taxation (yes, we are in that lucky $250K Club). It only took us about 27 years of hard work to get there.

  • Report this Comment On March 11, 2010, at 7:28 PM, stan8331 wrote:

    Fixing Social Security is relatively easy and can be accomplished in any number of minimally painful ways, but that is beside the point. It's baby boomer Medicare & Medicaid that is going to bankrupt us unless we find some means of drastically lowering healthcare costs. And by that, I do not mean "lower the rate of increase".

    We are already spending twice the percentage of GDP on healthcare versus any of our competitors, and without massive changes that percentage will skyrocket to astronomical levels as the baby boomers retire. You simply can't run a modern economy that's 1/3 healthcare - it will collapse upon itself.

    I've yet to see anyone in either political party who's willing to even tell us the bad news, much less try to actually do something about it. The Dems want to use any savings to add more recipients, the GOP wants to tinker around the edges while keeping the current system firmly in place. Both approaches lead to disaster.

    The longer we wait to begin taking serious steps to resolve the problem, the more draconian the eventual solution will have to be. And the suffering will NOT be limited to one political party or the other.

  • Report this Comment On March 11, 2010, at 7:43 PM, jesse2159 wrote:

    Social Security is an insurance program not a retirement fund. FDR was brilliant in proposing this program to keep the workers from starving when they got too old for employment. It's had problems, but it's an excellent solution for a very real problem.

  • Report this Comment On March 11, 2010, at 8:48 PM, ynotc wrote:

    So let me get this straight. Your solution to the problem that government created is to move the hurdles back further. How about the idea of that government was not intended to be in the business of retirement. This is a constitutional fact. It is hard for me to fathom that anyone writing for TMF does not understand how poor the returns are on the investment of our money. If all of the capital that has been confiscated for social security had been deployed in an average mutual fund we would not be having this discussion. Many argue that the money could or would evaporate in the market because of the crooks. How is this any different than what has happened with the politicians? In fact the congress does not even participate in the plan. Bottom line social security is broke, government can't fix it and it is time to terminate it.

  • Report this Comment On March 11, 2010, at 9:17 PM, xetn wrote:

    The problem with this article is that Social Security is already bankrupt. For a complete analysis of this issue, read:

    http://www.lewrockwell.com/north/north790.html

    which completely debunks the government's claims.

  • Report this Comment On March 11, 2010, at 9:20 PM, xetn wrote:

    This article is completely wrong in its assertion that SS is still viable in any way. For a complete, detailed breakdown on this ponzi scheme, read:

    http://www.lewrockwell.com/north/north790.html

  • Report this Comment On March 11, 2010, at 9:21 PM, TMFHousel wrote:

    "So let me get this straight. Your solution to the problem that government created is to move the hurdles back further."

    Nope. I wrote, "Apply a fraction of each proposal, and you've fixed Social Security."

    The other proposal (besides moving the hurdles back) is to "grow ... with prices rather than wages beginning in 2012," which according to CBO would ensure "the Social Security Trust Fund would never become exhausted. Ever."

    Thanks for reading (?).

  • Report this Comment On March 11, 2010, at 9:25 PM, dtarends wrote:

    As a number of people have pointed out, the solution to the Social Security shortfall is not difficult. Raise the retirement age and/or the income limit on contributions, and the system will be solvent for generations. It is ludicrous to resist raising the retirement age when life expectancy has risen. The only thing lacking is political will to do it, which, given the current state of American politics, is a huge obstacle.

    Another reason people run about saying the sky is falling is to create a perception that "privatization" will save us. The only beneficiaries of privatizing Social Security will be the investment firms that offer the plans. Any plan which allows people to opt out will worsen the Social Security shortfall, not fix it. If one has a desire to privatize their retirement plan, the ability to do so already exists in 401K, 403B, IRA, SEP, ROTH, and other plans.

  • Report this Comment On March 11, 2010, at 9:26 PM, dtarends wrote:

    As a number of people have pointed out, the solution to the Social Security shortfall is not difficult. Raise the retirement age and/or the income limit on contributions, and the system will be solvent for generations. It is ludicrous to resist raising the retirement age when life expectancy has risen. The only thing lacking is political will to do it, which, given the current state of American politics, is a huge obstacle.

    Another reason people run about saying the sky is falling is to create a perception that "privatization" will save us. The only beneficiaries of privatizing Social Security will be the investment firms that offer the plans. Any plan which allows people to opt out will worsen the Social Security shortfall, not fix it. If one has a desire to privatize their retirement plan, the ability to do so already exists in 401K, 403B, IRA, SEP, ROTH, and other plans.

  • Report this Comment On March 11, 2010, at 9:27 PM, CAPTAINWACK wrote:

    You totally missed the reason why SS is heading toward bankruptcy.

    It's because the Washington politicians have raided the SS fund to pay for unfunded expenditures, like bridges to nowhere, Ketchup speed studies, high speed ferries for Mexico and keg parties.

    One of the biggest raiders of the SS funds was Ted Kennedy, who always said "we'll put the money back when time comes".

    Well go ask him when time will come?

    Oh wait he's dead... it's not his problem anymore.

  • Report this Comment On March 11, 2010, at 9:37 PM, TMFHousel wrote:

    "This article is completely wrong in its assertion that SS is still viable in any way. For a complete, detailed breakdown on this ponzi scheme, read: http://www.lewrockwell.com/north/north790.html"

    Please forgive me thinking there can be solutions to problems. Next time I'll just clean my gun, grab a box of tissues, and wait for the long, slow death that's upon us.

  • Report this Comment On March 11, 2010, at 9:47 PM, LessGovernment wrote:

    Captainwick makes a very good point.

    First, we need to put the "Trust" back into the "Trust Fund". That means Congress should not be able to use the funds so they can spend and avoid running up the deficits. If they spend, make them fund the expenditure. That will help tremendously because "funding" is not nearly as easy as spending.

    Second, we need to come to grips with the sad fact that it is not borrowing if you never plan on paying it back. What we are doing to future generations is simply stealing from them because they can't vote.

    Thirdly. Fire Them All. OneTermAllowed. Never vote for an incumbent, regardless of party because all parties have sold us out.

    Fourth, vote in a new batch of One Termers and cut the size and cost of government, take away congressional pensions and benefits (all of them), and put congress on Social Security only.

    Lastly, follow the Constitution and impeach the first congressman that breaks his oath of office to follow the Constitution. That will get rid of earmarks, neuter the Progressives that think the Constitution is no longer relevant, and put America back on course.

  • Report this Comment On March 11, 2010, at 10:18 PM, quitman100 wrote:

    "This was hardly the case when Social Security was enacted in 1935. Alas, a 1935-specific actuary table couldn't be found, but there is one from 1930. It shows that those who made it to age 18 around 1935 could expect to live for another 48 years, to age 66, meaning they could expect to receive Social Security benefits for just one year."

    I'm not so sure. My read of the birth cohort life tables here: http://www.socialsecurity.gov/OACT/NOTES/s2000s.html (Actuarial Study # 120) is that a male born in 1920 who survived to age 18 could expect to live another 53.28 years or to age 71.28. For women it is even longer (59.78 or to age 77.78). The 1920 birth cohorts are close enough for this purpose because they would have reached age 18 around the time taxes were actually first collected under the program (1937).

    Also the program isn't just a retirement program -- since its inception over 47 million benefit awards to children have been made (mostly because a parent died) and nearly 28 million awards to widows and widowers (http://www.ssa.gov/policy/docs/statcomps/supplement/2009/6a.... )

  • Report this Comment On March 11, 2010, at 10:29 PM, AbstractMotion wrote:

    You talk about the trust fund as if there's any assets in there external of the current generation of taxpayers. If FICA taxes aren't raised and we start drawing from the trust fund the net effect is the exact same. The current taxpayer will either fund the program from the general fund or pay higher taxes. The program is constructed horribly, instead of actually saving money and helping fund the program through the interest yield it's just money in and money out. Even the massive surpluses that were being pumped into it throughout the 80's and 90's the program has managed to shift all the burden onto the future taxpayer. On top of all this most of these projections are extremely rosy given the savings a lot of boomers have and the likely fact that they'll simply vote themselves COLA adjustments to compensate for it.

    Social Security was never structured to be a pension fund as it is now, if it were the tax rates would have been much higher during it's inception. Cheap political populism has slowly shifted the program from welfare for the destitute elderly to a guaranteed stream of retirement income. It's a good example of cheap populism, poor planning and the government's inability to say no to whatever demands elderly voters put forward. How do people not find it absurd that Medicare and Social Security are priorities? We spend hundreds of billions of dollars each year so someone can buy a Buick when they retire. Meanwhile the amount of money the average worker actually takes home in their pocket as a portion of their wages has been eroded by higher FICA taxes, medical taxes and paying off the debt higher education imposes on a lot of young Americans today. Even from a utilitarian standpoint these programs are idiotic. The only justification that seems to keep them going is "well we've been paying into it for years", yeah and half that money went right back out to fund someone else's benefits or thrown into some hole of a program like SDI or the ever popular Middle Eastern war. Want to know the kicker? In this new found era of fiscal responsibility the government is looking to help balance the budget by actually cutting into the 20% of spending that does productive things. You know education, agriculture, transportation, energy, etc.

    They're going to raise the FICA tax and in 15 years we'll right back where we are with someone scratching their head about just how it is that the living standard of the middle class has continued decreasing. Here's a massive hint, if you keep on taking their money and simultaneously pumping it into the hands of subset of the population that puts a huge draw on medical services, simply because their body is too old to work properly anymore, then medical costs will inflate and most people/businesses will have less money in to go around. Look at Medical costs and FICA taxes since LBJ decided to revamp the whole system without properly paying for it.

    Here's a fun graph:

    http://chartingtheeconomy.com/wp-content/uploads/2009/04/hea...

    Here's another one:

    http://upload.wikimedia.org/wikipedia/en/0/01/InflationTuiti...

    Tell me again why I should be worried about how comfortably boomers will be retiring?

  • Report this Comment On March 12, 2010, at 12:35 AM, dikrew wrote:

    Another article that has provoked a lively discussion! Well done, Morgan!

  • Report this Comment On March 12, 2010, at 3:02 AM, PoundMutt wrote:

    On March 11, 2010, at 10:50 AM, pondee619 wrote: What would happen with the trust fund if the cap were taken off wages/income that was taxed?

    I heard Nancy Pelosi on cable say today that they're working on adding to the health care reform legislation an amendment to require payment of Medicare Tax on UNEARNED INCOME!

    How about THAT for more SS taxes?

  • Report this Comment On March 12, 2010, at 5:05 AM, happybeachbum wrote:

    Interesting discussion. It is fascinating how few people have any idea how social security was originally set up and the various changes that have been made to it. I certainly do not know all the changes that were made to it, because many of them were made behind closed doors and never discussed.

    First of all SS is not and never has been an insurance program which IMHO is the reason it is such a problem. It is a pay as you go program originally set up for working people to pay the benefits of those drawing them. Over the years the taxes were raised so they exceeded the current benefits and the excess was put into a trust fund. The money in the trust fund was given to congress and the president to spend as they wished and an IOU was placed in what Al Gore lovingly called a Lock Box. The trust fund was to supposed to start paying down the future liabilities of social security so that SS would be a camelized version of an insurance policy. (camelized; a camel is a horse designed by a committee)

    Somehow our leaders in congress and the white house forgot to show the IOUs on the debit side of our balance sheet so no one knew that we were building up a very large debt in our Lock Box that someday we would have to pay back. As you know we have since added lots of nice goodies for congresspersons, presidents, and all other government employees along with current and future retirees from the private sector. The Lock Box now has IOUs for current and future pensions for over half the people in the United States along with the current and future medical care for well over half of all the people in the United States.The government has not done a very good job running over half the health care in the country, I don't understand how it will be better with them running all of it. When Medicare was voted in congress and the president assured us that it could never cost over 10 Billion dollars a year. Now the president says we throw away more than a 100 Billion a year so I guess they missed that estimate.

    In the meantime I think we have shipped the Lock Box to China to hold for us.

    In 2009 late one Friday afternoon on a holiday weekend, it was announced that the taxes we are taking in for SS and Medicare were less than the amount that we were paying out. (We weren't supposed to reach that point until 2018.) The difference was made up from the general fund (taxes plus what we are borrowing). If we recover from the financial mess we are in and the economy comes back, we will bounce back and forth between being short a little bit and long a little bit. Over the next couple of years the short will become a permanent situation that will get bigger and bigger. I have heard different congressmen and our president give numbers for the amount of IOUs in that Lock Box of 60 to over 100 TRILLION dollars.

    I am just a poor old country boy currently living off SS from that Lock Box so maybe it makes me a little more wide eyed that you highly educated folks, but it seems to me that somebody needs to get of their ass and start trying to do something about this mess. I don't think all this political name calling and piddling around the edges of this while we search for more ways to throw money away is going to get it. I am not going to be here all that long so I probably shouldn't worry about it as much as I do. But I have kids and friends that are going to be around a long time like many of you and I would like to think they and you will have a fairly decent life when you get my age.

  • Report this Comment On March 12, 2010, at 7:55 AM, CAPTAINWACK wrote:

    Here's a brainstorm idea.

    In my latest SS statement dated 12/16/2009. I have paid $84,000 in SS taxes and $17,000 in Medicare taxes which I'm entitled to start collecting benefits if I choose at 62 years of age.

    Send me the full balance now and I'll invest the funds myself, when I retire I won't be entitled to collect SS and this will take the financial burden off the government.

    Problem solved.

  • Report this Comment On March 12, 2010, at 11:36 AM, falcngnzx2 wrote:

    Bottom Line:

    If Social Security was such a "great" program, the government would not have to FORCE workers to participate in a program that costs me over $10,000 PER YEAR (15.2% in FICA TAXES which is derived from 6.2% for SS and 1.4% for Medicare from BOTH myself and my employer).

    I make $66,000 per year and 15.2% of that is $10,032.

    Do you people HAVE A CLUE what my retirement would be if this huge amount of money was actually INVESTED and the money that is CONFISCATED from all of us was actually INVESTED over the 40 or so years of our working careers???

    What is wrong with Americans today when they have NO IDEA how much money they are LOSING and how much FINANCIAL FREEDOM they allow the government to take from them in exchange for a FALSE SECURITY of about $1,000 per month???

    Because FICA TAX is CURRENTLY at 7.5% for myself (and 7.5% for my Employer), that 7.5% takes alot of money out of my paycheck and is WASTED.

    I then had to get into a 401k plan at my job, and when I was younger, I used to max out my contributions at 15% matched by the Company at 7%. Those early years made a difference, but money was extremely tight becuase I was paying 7.5% in FICA TAX and 15% for my 401k, and that was 22% of my salary just for FICA TAX and my 401k pIan. At the time, I was earning in the $30,000 range (with OVERTIME included).

    And you think that the "solutions" to the SCAM of Social Security is to:

    1) EXTEND the age people can collect their benefits to 70 (IF THEY LIVE THAT LONG!!!)

    2) Raise the FICA TAX to, say, 9% for individual and employer, which will stifle savings even more and crush businesses.

    3) ) Raise the ceiling on people who make over $100,000 annually to pay 6.2% currently on THEIR GROSS SALARY (Currently, people who earn over $100K pay 6.2% on "only" the first $100K or so). This is just more of "TAX THE RICH" and in the MARXIST WAY, REDISTRIBUTE THAT PERSON"S WEALTH to others who do not deserve it!

    The United States COULD have been a great Country, but liberals, socialists, PROGRESSIVES, ahve destroyed the wealth of the country and Social Security and Medicare is 40% of the United States budget, and these two programs have BANKRUPTED the greatest, wealthiest and most prosperous country the world has ever seen.

    The blame is placed on "Capitalism", when it is actually two Socialistic programs (Social Security and Medicare) which destroyed the POTENTIAL wealth of the people, if only the PEOPLE had their own money to invest, and not have the government steal it from them to REDISTRIBUTE (a MARXIST tenet) via FICA TAXES for Social Security and Medicare.

    Now they want to do the coup d'grace on the United States by implementing Obama's Health Care "reform".

    Obama's Health Care "reform" is not a reform; it is another TAX, just like Social Security and Medicare.

    Very sad. Even more sad for the young people, the children of today, and those yet unborn.

    Please see my website:

    http://www.socialsecurityisascam.com

    **********************************************

  • Report this Comment On March 12, 2010, at 11:40 AM, falcngnzx2 wrote:

    Bottom Line:

    If Social Security was such a "great" program, the government would not have to FORCE workers to participate in a program that costs me over $10,000 PER YEAR (15.2% in FICA TAXES which is derived from 6.2% for SS and 1.4% for Medicare from BOTH myself and my employer).

    I make $66,000 per year and 15.2% of that is $10,032.

    Do you people HAVE A CLUE what my retirement would be if this huge amount of money was actually INVESTED and the money that is CONFISCATED from all of us was actually INVESTED over the 40 or so years of our working careers???

    What is wrong with Americans today when they have NO IDEA how much money they are LOSING and how much FINANCIAL FREEDOM they allow the government to take from them in exchange for a FALSE SECURITY of about $1,000 per month???

    Because FICA TAX is CURRENTLY at 7.5% for myself (and 7.5% for my Employer), that 7.5% takes a lot of money out of my paycheck and is WASTED.

    I then had to get into a 401k plan at my job, and when I was younger, I used to max out my contributions at 15% matched by the Company at 7%. Those early years made a difference, but money was extremely tight because I was paying 7.5% in FICA TAX and 15% for my 401k, and that was 22% of my salary just for FICA TAX and my 401k plan. At the time, I was earning in the $30,000 range (with OVERTIME included).

    And you think that the "solutions" to the SCAM of Social Security is to:

    1) EXTEND the age people can collect their benefits to 70 (IF THEY LIVE THAT LONG!!!)

    2) Raise the FICA TAX to, say, 9% for individual and employer, which will stifle savings even more and crush businesses.

    3) ) Raise the ceiling on people who make over $100,000 annually to pay 6.2% currently on THEIR GROSS SALARY (Currently, people who earn over $100K pay 6.2% on "only" the first $100K or so). This is just more of "TAX THE RICH" and in the MARXIST WAY, REDISTRIBUTE THAT PERSON"S WEALTH to others who do not deserve it!

    The United States COULD have been a great Country, but liberals, socialists, PROGRESSIVES, have destroyed the wealth of the country and Social Security and Medicare is 40% of the United States budget, and these two programs have BANKRUPTED the greatest, wealthiest and most prosperous country the world has ever seen.

    The blame is placed on "Capitalism", when it is actually two Socialistic programs (Social Security and Medicare) which destroyed the POTENTIAL wealth of the people, if only the PEOPLE had their own money to invest, and not have the government steal it from them to REDISTRIBUTE (a MARXIST tenet) via FICA TAXES for Social Security and Medicare.

    Now they want to do the coup d'grace on the United States by implementing Obama's Health Care "reform".

    Obama's Health Care "reform" is not a reform; it is another TAX, just like Social Security and Medicare.

    Very sad. Even more sad for the young people, the children of today, and those yet unborn.

    Please see my website:

    http://www.socialsecurityisascam.com

    **********************************************

  • Report this Comment On March 12, 2010, at 11:56 AM, outoffocus wrote:

    AbstractMotion has the best comment on here so far.

  • Report this Comment On March 12, 2010, at 12:22 PM, mountain8 wrote:

    Wonderful, educational comments to a semi-ignorant SS recipient. Thank you.

    I agree with the cap being lifted or ended, along with a cap put on the amount of SS benefits paid. ie. everybody pays, but the upper income persons limited to what they receive in return, perhaps only a tax deduction for what they paid in.

    The rich, on the whole earned their riches, I don't fault them that. But they should realize they earned it because of those of us who are not rich, both workers and consumers. Nobody gets big without the little guy. The little guy is essentially an investor in the employment he choses. He should receive a 'dividend' from the bigs.

    So eliminate the cap. Then have the earnings offset to SS capped so that those with 'retirement' income of $250k + are still offset and taxed after age 65.

  • Report this Comment On March 12, 2010, at 12:33 PM, mcrose wrote:

    <blockquote>

    The United States COULD have been a great Country, but liberals, socialists, PROGRESSIVES, ahve destroyed the wealth of the country and Social Security and Medicare is 40% of the United States budget,

    </blockquote>

    Yeah, we'd be much better off if we'd just let the old people die in the street, like God intended.

    I suppose we could hire more police and "cleaners" to scoop up the rotting bodies though. That would be a boon to employment.

  • Report this Comment On March 12, 2010, at 1:33 PM, letsvotethemout wrote:

    Here's the major problem. The private sector requires you to work to 67, or maybe it will be 72, but you still have to put the time in and pay into a bankrupt system that continues to take the money out for other uses, typiclly funding other entitlement programs. On the public side at the Federal level, if I understand correctly, their fund is fully-funded and they only have to work 30 years or so to get a full retirement program...at the private sectors expense. And, you have those who benefit from this unjust system making the rules (do I see a fox in the hen house, why, yes I do). So, until all workers are under the same system, the private sector is just plain screwed.

  • Report this Comment On March 12, 2010, at 1:53 PM, falcngnzx2 wrote:

    MCROSE says:

    "Yeah, we'd be much better off if we'd just let the old people die in the street, like God intended.

    I suppose we could hire more police and "cleaners" to scoop up the rotting bodies though. That would be a boon to employment."

    +++++++++++++++++++++++++

    This statement proves how DUMB you are. With Social Security, not only are the old folks eating pet food if they relied only on Social Security, the WHOLE COUNTRY is on the way to eating pet food as Social Security and Medicare collpases the economy.

    If PERSONAL RETIREMENT ACCOUNTS and PERSONAL HEALTH ACCOUNTS were in the HANDS OF THE PEOPLE, and not the government, people would be able to pay for their health care as they work and age, and then when they retire they would have HUNDREDS OF THOUSANDS of dollars in their PERSONAL HEALTH ACCOUNT to pay for catastrophic health care insurance or to pay for an expensive operation, if necessary.

    The same would happen if people had a PERSONAL RETIREMENT ACCOUNT, the worker would retire with HUNDREDS OF THOUSANDS of dollars for a financially independent retirement, instead of $1000 per month that social security "benefits" provide.

    Liberals/leftists despise wealthy people, but then claim that everyone is poor, starving, obese (sometimes in the same sentence!), unhealthy, one-foot-in-the-grave, but when people provide easy, simple, CAPITALISTIC solutions, all that liberals/leftists like MCROSE can do is make a condescending, ignorant, DUMB, remark with NOTHING INTELECTUAL to back up their brainfart.

    Now, do see why we should not elect liberals/leftists???

    Leftists despise authority, which one would think means government and "God" (notice MCROSE's snotty comment above), such as the military and the police, but leftists are more than HAPPY to give people's money over to the government to waste, so that the people end up impoverished, and as MCROSE said, "dying in the streets".

    MCROSE - come on back for some more ass-whoopin'!

  • Report this Comment On March 12, 2010, at 2:29 PM, falcngnzx2 wrote:

    MCROSE says:

    "Yeah, we'd be much better off if we'd just let the old people die in the street, like God intended.

    I suppose we could hire more police and "cleaners" to scoop up the rotting bodies though. That would be a boon to employment."

    +++++++++++++++++++++++++

    This statement proves how "smart" you are. With Social Security, not only are the old folks eating pet food if they relied only on Social Security, the WHOLE COUNTRY is on the way to eating pet food as Social Security and Medicare collpases the economy.

    If PERSONAL RETIREMENT ACCOUNTS and PERSONAL HEALTH ACCOUNTS were in the HANDS OF THE PEOPLE, and not the government, people would be able to pay for their health care as they work and age, and then when they retire they would have HUNDREDS OF THOUSANDS of dollars in their PERSONAL HEALTH ACCOUNT to pay for catastrophic health care insurance or to pay for an expensive operation, if necessary.

    The same would happen if people had a PERSONAL RETIREMENT ACCOUNT, the worker would retire with HUNDREDS OF THOUSANDS of dollars for a financially independent retirement, instead of $1000 per month that social security "benefits" provide.

    Liberals/leftists despise wealthy people, but then claim that everyone is poor, starving, obese (sometimes in the same sentence!), unhealthy, one-foot-in-the-grave, but when people provide easy, simple, CAPITALISTIC solutions, all that liberals/leftists like MCROSE can do is make a condescending, ignorant, DUMB, remark with NOTHING INTELECTUAL to back up their statementt.

    Now, do see why we should not elect liberals/leftists???

    Leftists despise authority, which one would think means government and "God" (notice MCROSE's disdainful comment above - "like God intended..."), such as the military and the police, but leftists are more than HAPPY to give people's money over to the government to waste, so that the people end up impoverished, and as MCROSE said, "dying in the streets".

    MCROSE - come on back for some more!

  • Report this Comment On March 12, 2010, at 2:59 PM, alanjc wrote:

    Clearly the answer is to forcibly reduce the life expectancy back to where it was in 1935. For those born after 1959, we could give them a couple extra years.

  • Report this Comment On March 12, 2010, at 3:40 PM, Chromantix wrote:

    "What's Messed Up About Social Security"?

    Everything.

    Give me the option to back out right now. I don't even want my "investment" back. I just want the government to stop forcing me to pay.

  • Report this Comment On March 12, 2010, at 3:43 PM, TMFHousel wrote:

    "Clearly the answer is to forcibly reduce the life expectancy back to where it was in 1935."

    That's my favorite answer so far.

  • Report this Comment On March 12, 2010, at 5:49 PM, Tamanta wrote:

    The article forgot to mention the countless number of folks collecting ssn disablility checks, the widows collecting unused ssn benefits, and offspring collecting.

    I have to wait until I am beyound death to collect and an individual who becomes disabled at 21 collects for the rest of his or her life.

  • Report this Comment On March 12, 2010, at 6:46 PM, switchingtoguns wrote:

    I like Chromantix's way of thinking. I'm 35 and have been getting jacked for the past 17 years. End the program, I'll call it even, and let me have my 6.2% to put toward an investment where I will actually be responsible for my own actions rather than this ponzi scheme. I'll take my index mutual fund over a IOU held by China any day.

  • Report this Comment On March 12, 2010, at 7:41 PM, sheltonclan wrote:

    I am not opposed to Social Security System. In fact - full disclosure - I benefitted from it for 16 years after my dad died when I was one.

    It's the structure of the thing that bothers me. Can someone explain to me why this is NOT considered a ponzi scheme?

  • Report this Comment On March 12, 2010, at 7:50 PM, dgmennie wrote:

    Yep, lots of rants and discussions here, but nothing about the fact that EMPLOYERS discriminate against older workers. I'm talking about healthy 40 and 50-year olds, not to mention those 65+. You can jabber about raising the retirement age all you want. But this will most likrely (1) apply only to the private sector, making public sector jobs like policeman and school teacher even more lucrative than they already are (paid for by the poor slobs trying to hold on to private sector jobs), and (2) further widen the gap between when full-time private-sector jobs abruptly (and involutarily) end and the time when a pittance of retirement money can be collected.

    Meanwhile, don't forget (3) that while life expectancy has increased across the board, the number of healthy working years a person can expect to enjoy has not. Who in their right mind is going to expect health-challenged seniors to hold down full-time jobs between their doctor visits and chemotherapy sessions?

    The people posting about this stuff are mostly greedy 30-year-olds with beer buzz.

    PURE NONSENSE!

  • Report this Comment On March 12, 2010, at 7:52 PM, dgmennie wrote:

    Yep, lots of rants and discussions here, but nothing about the fact that EMPLOYERS discriminate against older workers. I'm talking about healthy 40 and 50-year olds, not to mention those 65+. You can jabber about raising the retirement age all you want. But this will most likrely (1) apply only to the private sector, making public sector jobs like policeman and school teacher even more lucrative than they already are (paid for by the poor slobs trying to hold on to private sector jobs), and (2) further widen the gap between when full-time private-sector jobs abruptly (and involutarily) end and the time when a pittance of retirement money can be collected.

    Meanwhile, don't forget (3) that while life expectancy has increased across the board, the number of healthy working years a person can expect to enjoy has not. Who in their right mind is going to expect health-challenged seniors to hold down full-time jobs between their doctor visits and chemotherapy sessions?

    The people posting about this stuff are mostly greedy 30-year-olds with beer buzz.

    PURE NONSENSE!

  • Report this Comment On March 12, 2010, at 8:12 PM, Fredd109 wrote:

    This article is purely hypothetical. No one will hire someone in their 60s or 70s today. And so what are all the boomers going to do with no jobs and no social security in their 60s and 70s? It's one thing to work at a restaurant but something entirely different for a firefighter, construction worker or truck driver. Do you want Mr Magoo driving next to you in that 18 wheeler?

  • Report this Comment On March 12, 2010, at 8:31 PM, AbstractMotion wrote:

    @dgmennie: That's pretty funny given that unemployment has been higher in this recession the younger someone is. That comment about productive years not rising is ridiculous as well, the mean retirement age has been steadily declining since early retirement began being offered in 1960's. Source: http://www.bls.gov/opub/mlr/2001/04/art1abs.htm

    People have in fact been retiring earlier then they did 50 years ago when medical services and life expectancy were in a far poorer state then they are today.

    Likewise those 40+ in age still make up the vast majority of the workforce and have the lowest unemployment rates. So how again are they getting a raw deal here?

    Current employment statistics:

    http://www.bls.gov/news.release/empsit.toc.htm

  • Report this Comment On March 12, 2010, at 8:39 PM, TMFHousel wrote:

    Fredd109,

    Keep in mind we're talking about bumping the full-retirement date up by just 3 years. I'm assuming a firefighter doesn't turn from Super Hero to Mr. Magoo over the course of 1095 days. Call that hypothetical if you wish.

  • Report this Comment On March 12, 2010, at 8:53 PM, RaiddinnRZ wrote:

    Second the motion to cut social security off at the knees right now as in end the program completely.

    Find some way to pay out a lump sum of everything we have so far and give it to everyone 55 and over. The people under that age get unfairly screwed due to getting nothing, but at least they get about 7.5% of their check back AND the employer could pass their 7.5% to the employee as well, or just let the employer keep it and pay dividends with it instead, maybe get people interested in business ownership as a means of prosperity again.

  • Report this Comment On March 12, 2010, at 10:05 PM, burrowsx wrote:

    What's messed up about Social Security is that it has been used to fund wars by every president since Lyndon Johnson. The Social Security Trust Fund consists of IOU's that do not have even the security of government EE bonds.

    On top of that we have had 4 decades of stupid tax cuts that once worked in 1960, when marginal rates were as high as 90%. That was too high. But 35% maximums encourage self-dealing CEO's and corporate boards to pocket as much money as they can vote themselves. When marginal rates for obscene multiples of the poverty level are well below 50%, the incentives encourage corruption and self-dealing as we have seen over the past decades.

  • Report this Comment On March 14, 2010, at 4:21 PM, Gorm wrote:

    SSA has too much going against it to survive, without significant changes.

    1) Life expectancy is rising rapidly, much attributable to Part D drug bills. Seniors are being sustained! In short, we're paying more to accelerate the demise of Medicare and SSA.

    2) The ratio of workers to retirees is falling and unemployment is accelerating that problem. Once at 16:1 it is today at 3:1 headed toward 2:1. Unable to find jobs older workers are opting for SSA as an income lifeline.

    3) COLAs are unaffordable. While we've enjoyed a short reprieve, what happens when inflation returns?

    4) Congress is GUTLESS and has avoided making meaningful changes until they become a crisis. Seniors are the strongest voting block out there and AARP rallies the troops effectively.

    5) Entitlements are already our most costly and unaffordable budget item expense. As tax revenues slide and expenses rise we create increased dependencies. Our national debt has gone from <$1T in 1981 to $13T in 2010.

    Do you really see SSA staying solvent for longer living seniors and the 78M boomers coming on board?

  • Report this Comment On March 14, 2010, at 5:34 PM, zgriner wrote:

    The ignorance is appalling. Social Security has been changed over the years from a simple Old Age Retirement program to a welfare/disability/pseudo-pension program. Politicians have added so many costs to the program.

    SSA money is invested in special Treasury bonds. Poorer people are given bigger payments, relative to amount of money contributed. Why should rich people get taxed on all their income if they're not going to get it back?

    And, finally, who says that a majority of people can work successfully in their late 60s? Although people aren't dying from diseases and illnesses, the body does start breaking down.

  • Report this Comment On March 14, 2010, at 5:36 PM, zgriner wrote:

    The ignorance is appalling. Social Security has been changed over the years from a simple Old Age Retirement program to a welfare/disability/pseudo-pension program. Politicians have added so many costs to the program.

    SSA money is invested in special Treasury bonds. Poorer people are given bigger payments, relative to amount of money contributed. Why should rich people get taxed on all their income if they're not going to get it back?

    And, finally, who says that a majority of people can work successfully in their late 60s? Although people aren't dying from diseases and illnesses, the body does start breaking down.

  • Report this Comment On March 14, 2010, at 7:07 PM, TMFHousel wrote:

    zgriner,

    "Why should rich people get taxed on all their income if they're not going to get it back?"

    They're not, for one. Per the IRS: "The maximum amount of wages subject to the social security tax for 2009 is $106,800."

    "And, finally, who says that a majority of people can work successfully in their late 60s?"

    The people who write the checks. Perhaps a more appropriate question is, "Who in their right mind thinks a nonviable program can continue forever?"

    The ignorance, you could say, is appalling.

  • Report this Comment On March 14, 2010, at 7:12 PM, TMFHousel wrote:

    Correct me if I'm wrong, zgriner, but it seems your views on social security are a) Don't you dare raise taxes, and b) don't you dare cut benefits.

    You wouldn't happen to be Mitch McConnell in disguise, would you? I'm kidding, but I think that sums up the challenges we face: No one wants to raise taxes, and no one wants to cut benefits. That's why we're in such a crater.

  • Report this Comment On March 15, 2010, at 10:01 AM, taxpayer21 wrote:

    If the government paid back what it has borrowed from Social Security, there would be no problem.

    Congress needs to pass a law making this practice unconstitutional.

  • Report this Comment On March 15, 2010, at 12:30 PM, sdcougar wrote:

    One commentor above hyped a link to a page headlined, ACT Time to Act.

    While seeking creative solutions, their las proposal is a road to failure:

    "Create equity partnerships using the special obligation bonds to underwrite the next generation of green energy; clean coal, biomass, wind, natural gas, etc."

    Wind is a losing road to nowhere, just see the studies on the BIG wind couontries Denmark and Spain. And the UK will be seeing brownouts in a few years.

    Current US Gov't subsidies for wind ia 23.34 dollars/MWh vs. the next highest a buck something for nuclear, oh and 25 CENTS for natural gas.

    http://network.nationalpost.com/np/blogs/fpcomment/archive/2...

  • Report this Comment On March 16, 2010, at 3:39 AM, RGGrass wrote:

    At this point in my life I have become a simpleton. In my opinion Social Security, Unemployment insurance, IRA's (Or any pension version item) and workman's compensation are all for replacement of income in the event one is not working. This does not include the disability insurance financial planners urge us to buy. After adding all the money paid for these various schemes if this amount was deposited in an individual interest bearing account, we would all be rewarded for working and not for shirking. I mean the 15% for FICA, the 7% for WC and the 2% for unemployment along with say 4% for retirement would add up over a carreer. Let me determine when I have enough to retire, not some government hack or politician who changes the rules whenever they like.

  • Report this Comment On March 16, 2010, at 3:40 AM, RGGrass wrote:

    At this point in my life I have become a simpleton. In my opinion Social Security, Unemployment insurance, IRA's (Or any pension version item) and workman's compensation are all for replacement of income in the event one is not working. This does not include the disability insurance financial planners urge us to buy. After adding all the money paid for these various schemes if this amount was deposited in an individual interest bearing account, we would all be rewarded for working and not for shirking. I mean the 15% for FICA, the 7% for WC and the 2% for unemployment along with say 4% for retirement would add up over a carreer. Let me determine when I have enough to retire, not some government hack or politician who changes the rules whenever they like.

  • Report this Comment On March 16, 2010, at 7:25 PM, savvyelrod wrote:

    More government BS. Folks talk like there is a SS fund, Nata, zero, never been, All the money the US treasuary collects goes into the general fund. SS is no different than income tax, death taxes, captial gain tax or any of the long list of federal taxes. If there ever was going to be a SS fund then when you file and pay your income taxes there would be a seperate check required for the SS fund. Nope, the amount you owe for FICA is added to the various income tax catagories and the total is sent to one of several collection centers around the country. Hard to believe folks read some blather about a SS fund and never think about how they sent in the SS money they owed. Ponder this, if there was a real fund the elected guys could not get their greedy hands on, the SS fund would have a huge surplus and that fund would be loaning china money instead of us borrowing from China. Require a read balanced budget at the federal level and spending in DC would fall by 50%.

  • Report this Comment On March 16, 2010, at 9:33 PM, velodad wrote:

    I got burned for a considerable chunk of cash in 1994 in what turned out to be a Ponzi scheme not an oilwell partnership as proposed. 50 years ago my dad told me that S.S. will at best be a chump-change contribution to my retirement. Dad was way ahead of his time!

    He and my brother retired from Hughes Aircraft several years ago. After Hughes was bought by GM, the pension offerings were optioned as a small percentage of what was promised.. or a cash-out. The cash-out was my brothers choice as he figured the pension fund would soon go broke. He got the equivalent of about 1.5 years of pension payments.

    Fortunately, dad taught us to plan investments to fund our own retirement programs. Dad was right on! MF has helped me a lot toward that end. My brother isn't talking!?

  • Report this Comment On March 16, 2010, at 10:43 PM, velodad wrote:

    My brother-in-law burned his brains out on drugs as a teenager. Deemed disabled, SSI, Medical, food stamps, housing assistance and who knows what else.. funded his life for 32 years. I don't think he worked gainfully for more than 2-3 years in the course of his entire life.

  • Report this Comment On March 17, 2010, at 7:50 PM, ironyworks wrote:

    The reason pension funds etc are " broken" is that the persons responsible for saving and investing the funds necessary...spent our retirement instead, in a criminally shortsighted series of moves.

    I want to see those basterds in prison!

  • Report this Comment On March 18, 2010, at 10:08 AM, DJDynamicNC wrote:

    "Please forgive me thinking there can be solutions to problems. Next time I'll just clean my gun, grab a box of tissues, and wait for the long, slow death that's upon us. "

    :lol: Top notch!

    Exactly right, too. This the attitude of "there is no solution, America is doomed, cling to your guns and your God!" is all too common lately.

    Seriously, when did patriotism become all about who can be the first to give up on our country? We have successfully met 100% of the challenges that have faced us in the past. I have every faith in our ability to do so in the future. We are a smart, capable, and dedicated bunch.

    Well, most of us.

  • Report this Comment On March 20, 2010, at 5:42 PM, atkcan wrote:

    How can we say it is fair to only take away from a subset of the people…people born after 1959. It seems to me, we people born after 1959 did our fair share to help already by not being able to draw full benefits until we our 67. The theory behind this bump in age back in 1983 was that we would have time to adjust our ways to make up for the extra two years of not being able to draw…well that time has elapsed. What is wrong with making everyone sacrifice a little? Reduce payments for everyone, raise the retirement age for everyone born after 1979, and raise the limit for paying into the system.

  • Report this Comment On March 21, 2010, at 5:21 PM, ductape121 wrote:

    What we need is a flat tax on all earned & unearned income. Social Security will never go broke.

  • Report this Comment On March 22, 2010, at 12:15 AM, DSL102 wrote:

    Morgan,

    Did you find out how many people collect benefits before they hit 30. SS is paid to children who lose a parent. The surviving parent collects for each child until they reach the age of 18 or 23 yrs.,if they go to college. Also, a young person can collect SS if they are considered "disabled", which can include such problems as mental or phsyical issues. This is a sticky mess because the recipient receives an amount that is not sufficient for food and housing and lif's other essentials, yet if the recipient tries to work for supplemental income, the SS is withdrawn. These costs were not included in the original plan and now they are contributing to its deficit and destruction.

    Quite simply, if Congress collects money, it always finds reasons to spend more and it doesn't seem to matter where they go to get the money. SS is nothing more than one big IOU.

  • Report this Comment On March 25, 2010, at 11:25 AM, Auburn102 wrote:

    You have to realize that there are not many people out here like you and me who know they have to save to take care of their retirement. I know of lots of people who have the matching 403B and do not even participate and that is free money!! If the Govt did not have this SS and Medicare system who would have taken care of the people who never saved to take care of themselves when they get old? There is no old age pension to be gotten from the Govt but there is SS instead. I am from a third world country and the Govt gives people at 60 old age pension but if there is a natural disaster, the govt is not entitled to help them. They have to fend for themselves. Americans complain all the time -- they just don't know how lucky they are and should count their blessings instead of demanding more and more from the Govt. I realize this Govt is not perfect and it is the same in other parts of the world.

  • Report this Comment On April 30, 2010, at 4:11 PM, RaiddinnRZ wrote:

    The people on SS just need to have their benefits bought out in a lump sum disbursement and then shut the system down.

    There is no saving it by design, only delaying the inevitable.

    Oh and if medical technology does what it is supposed to do (and what it is likely to do) our lives are going to start being extended a whole lot more in the future than they have been so far.

    That last part will probably be the real downfall, they can manipulate the rules about when to retire and stuff for only so long. If people don't leave the system, it will go bust.

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