Social Security fund will be drained by 2037

[her209]

You uh, know the Bush administration tried to fix Social Security in 2005, right? The democratically controlled Congress blocked the bill. Both parties have been raiding the SS pool for decades, almost since its creation.

You uh, know that the Dems didn't have control of Congress until after 2006 right?

http://en.wikipedia.org/wiki/109th_United_States_Congress

 

[rudder]

More FUD. Hints at not being part of the problem, there are many but here is one big one...

Don't fund wars and recessions with tax cuts. Stop spending like drunken sailors is another... More to come

When social security was implemented there were 8 people paying into the system for each recipient. That ratio is now 3 to 1. Within a few years 2 to 1. It is not sustainable on a good day.

Not to mention the life expectancy at inception was a lot lower than it is today.

The problem was in the program itself.

 

[Mursilis]

You are right. SS is a great success. The failures are the politicians who looted it. Nick is blaming the victim instead of perpetrators. That's probably because most of the looting happened under Republican presidents. Tax cuts FTL!

So Congress is disbanded under Republican presidents, and therefore isn't to blame? Please clarify.

 

[Pneumothorax]

You uh, know that the Dems didn't have control of Congress until after 2006 right?

http://en.wikipedia.org/wiki/109th_United_States_Congress

Uhh last time I checked, the repubs didn't have a super-majority. In other words they needed some votes from the other side...

 

[her209]

Uhh last time I checked, the repubs didn't have a super-majority. In other words they needed some votes from the other side...

See the part where he said "democratically controlled Congress".

 

[Scotteq]

2039?

It's OK: By then the Death Panels running the US Healthcare system will euthanize anyone who can no longer work. Social Security will therefore be obsolete. So who cares if it's BK?

 

[nick1985]

See the part where he said "democratically controlled Congress".

Let's go back to talking about how the program is an unsustainable failure.

 

[Brovane]

Social Security is just more than a simple retirement system. It can also cover your children till age 18 if you die and it also does disability. Some simple tweaks to the system could keep it in the black. One of the biggest mistakes IMHO was to lump SS with the rest of the federal budget. So in good years the surplus was raided and then in as SS went into the red we need to pay for it out of general tax receipts at a really bad time. The way I look at SS it is part of tiered approach with your 401k. SS will provide a baseline and then a 401k and IRA can provide additional funds on top of that to help in retirement. It is nice having the guaranteed income of SS. In some ways the title of this thread isn't 100% accurate. The IOU's will be drained by 2037 or around then. However without any changes SS will still have enough money coming in to pay out about 70% of benefits owed with having to get additional money from other parts of the Federal budget. So it isn't like there will be nothing. So to say that SS will be entirely out of money isn't really accurate.

I would look at gradually pushing up the retirement age past 67 with it eventually hitting 70. The maximum income taxed is a hard one for me. I get paid enough that the last couple of months of the year I exceed the maximum. However my benefits I acrue are also cut off at this level. When people talk about raising the cap on what benefits are taxes I never really get a answer if they are also looking at having to pay out additional benefits when they raise the cap or will the maximum benefit cap remain the same.

What I would like to see is SS removed from the Federal Budget and the money come out of a separate budget. People then could more easily see how much SS costs and the Federal government couldn't easily raid SS. I would then do a combination of raising the retirement age, the wage cap and a slight raise of the % taken out of each pay check. It would only have to be some minor tweaks to put SS back in the black. Going forward I would have SS then buy US treasuries on the open market and actually have real US treasuries sitting in the trust fund instead of just paper IOU's. The Federal government could no longer easily raid SS for budget money. It wouldn't take much tweaking to fix SS. We don't need to get rid of the entire program.

 

[Engineer]

You need to move your funds around. Any decent longterm growth fund should get way more than that. But, you are right, its not a certainty. But it is a certainty that I will lose money on SS.

You really don't have many choices with many 401k plans and I was about as diversified as you could be in that one. Also, take a look at the 10 year returns from many funds, large, small, foreign, mid-cap, etc. and see how they are doing on a 10 year annualized basis.

 

[Hacp]

Social Security is just more than a simple retirement system. It can also cover your children till age 18 if you die and it also does disability. Some simple tweaks to the system could keep it in the black. One of the biggest mistakes IMHO was to lump SS with the rest of the federal budget. So in good years the surplus was raided and then in as SS went into the red we need to pay for it out of general tax receipts at a really bad time. The way I look at SS it is part of tiered approach with your 401k. SS will provide a baseline and then a 401k and IRA can provide additional funds on top of that to help in retirement. It is nice having the guaranteed income of SS. In some ways the title of this thread isn't 100% accurate. The IOU's will be drained by 2037 or around then. However without any changes SS will still have enough money coming in to pay out about 70% of benefits owed with having to get additional money from other parts of the Federal budget. So it isn't like there will be nothing. So to say that SS will be entirely out of money isn't really accurate.

I would look at gradually pushing up the retirement age past 67 with it eventually hitting 70. The maximum income taxed is a hard one for me. I get paid enough that the last couple of months of the year I exceed the maximum. However my benefits I acrue are also cut off at this level. When people talk about raising the cap on what benefits are taxes I never really get a answer if they are also looking at having to pay out additional benefits when they raise the cap or will the maximum benefit cap remain the same.

What I would like to see is SS removed from the Federal Budget and the money come out of a separate budget. People then could more easily see how much SS costs and the Federal government couldn't easily raid SS. I would then do a combination of raising the retirement age, the wage cap and a slight raise of the % taken out of each pay check. It would only have to be some minor tweaks to put SS back in the black. Going forward I would have SS then buy US treasuries on the open market and actually have real US treasuries sitting in the trust fund instead of just paper IOU's. The Federal government could no longer easily raid SS for budget money. It wouldn't take much tweaking to fix SS. We don't need to get rid of the entire program.

I agree, only if they give us an opt-out option. People who don't want SS can choose not to pay the SS tax.

 

[mjrpes3]

I don't like the idea of SS retirement going up to 70. When you start getting up in the late 60s those can be the precious few years you have left before you lose full mobility the marbles in your head.

 

[werepossum]

But it wasn't supposed to be a welfare program, nor should it be. If people decide to blow all their money now (which most do, because our consumer culture is incrediblely short-sighted), and they don't save enough for retirement, why is that my problem? I'm living well within my means (driving a 14 year old Toyota, for example) so I can max out my 401K contribution. If other people choose to live differently, let them deal with that when they're old.

One small problem with that. You really think that when government can't borrow any more, it's going to ignore all those fat 401K accounts, Roth accounts, etc? Chance not. Just as my buying and paying off one modest house means I get to help pay for others' McMansions, your fully funded retirement account means you get to fund the retirements of those who saved nothing.

 

[shira]

Fixing SS will not be that big a deal. It will take four relatively minor changes:

1) Phase in a later retirement age over the next 30 years - probably to age 70.
2) Change the COLA formula for computing increases from the current one (which is based on the Consumer Price Index and overstates inflation) to one that more accurately gauges inflation.
3) Increase the maximum wage subject to SS taxes to a value above $106,800 (2011 dollars).
4) Implement some sort of means-test to reduce SS payments to those receiving significant outside income.

SS can easily be made solvent, and it will be. The real monster in the attic is Medicare.

 

[Hacp]

Fixing SS will not be that big a deal. It will take four relatively minor changes:

1) Phase in a later retirement age over the next 30 years - probably to age 70.
2) Change the COLA formula for computing increases from the current one (which is based on the Consumer Price Index and overstates inflation) to one that more accurately gauges inflation.
3) Increase the maximum wage subject to SS taxes to a value above $106,800 (2011 dollars).
4) Implement some sort of means-test to reduce SS payments to those receiving significant outside income.

SS can easily be made solvent, and it will be. The real monster in the attic is Medicare.

How about we let anyone who wants to opt out of social security? Then it wouldn't have any solvency problems. People who want in can pay in. People who don't want in can not pay.

 

[rcpratt]

How about we let anyone who wants to opt out of social security? Then it wouldn't have any solvency problems. People who want in can pay in. People who don't want in can not pay.

Every fucking poor idiot won't pay the tax, because they don't know how to think ahead.

 

[mjrpes3]

Every fucking poor idiot won't pay the tax, because they don't know how to think ahead.

Even if every "fucking poor idiot" paid the tax, it's doubtful that would be enough to support the old and disabled, as SS is a progressive tax.

 

[boomerang]

One small problem with that. You really think that when government can't borrow any more, it's going to ignore all those fat 401K accounts, Roth accounts, etc? Chance not. Just as my buying and paying off one modest house means I get to help pay for others' McMansions, your fully funded retirement account means you get to fund the retirements of those who saved nothing.

And those of us paying attention know it's already happening in Europe. Madame Pelosi herself has said numerous times in the past that the government could better manage those funds than individuals.

werepossum, I know I'm not telling you anything you didn't already know. This information is for the benefit of the rest. Although I'm certain there are a number of folks here who see these as truly wonderful possibilities.

 

[piasabird]

Just remove the SS Cap. It makes no sense. A Person making $20,000 gets no break on paying the SS Tax so why should a person making 100,000,000 get a break? Make them pay the same percentage? Now that would be fair.

 

[Engineer]

Just remove the SS Cap. It makes no sense. A Person making $20,000 gets no break on paying the SS Tax so why should a person making 100,000,000 get a break? Make them pay the same percentage? Now that would be fair.

So are you still going to limit the amount the person making $100,000,000 could receive from SS when they retire then or would it be proportional?

 

[ModerateRepZero]

Social Security is just more than a simple retirement system. It can also cover your children till age 18 if you die and it also does disability. Some simple tweaks to the system could keep it in the black.

Most people don't realize it, but yes, Social Security covers not just retirement, but also "auxiliary" (spousal, children, and student) benefits, as well as widow/widower, and mother/father's benefits.

As for the comment about the tweaks, from a technical standpoint my understanding is that you're correct. However, none of the options are politically appealing: Raise retirement age, cut benefits, raise (FICA) taxes.

Just remove the SS Cap. It makes no sense. A Person making $20,000 gets no break on paying the SS Tax so why should a person making 100,000,000 get a break? Make them pay the same percentage? Now that would be fair.

The SS cap was put in place for political reasons. In order to cap benefits, you have to cap contributions, and Social Security was intended to be safety net for the poor and elderly, not a retirement nor redistributive scheme. So while I agree that it's practical to raise/eliminate the cap, I suspect it'll be an uphill battle.

 

[Hacp]

Most people don't realize it, but yes, Social Security covers not just retirement, but also "auxiliary" (spousal, children, and student) benefits, as well as widow/widower, and mother/father's benefits.

As for the comment about the tweaks, from a technical standpoint my understanding is that you're correct. However, none of the options are politically appealing: Raise retirement age, cut benefits, raise (FICA) taxes.



The SS cap was put in place for political reasons. In order to cap benefits, you have to cap contributions, and Social Security was intended to be safety net for the poor and elderly, not a retirement nor redistributive scheme. So while I agree that it's practical to raise/eliminate the cap, I suspect it'll be an uphill battle.

So SS is welfare? SS is taking from productive people and giving the money to unproductive people just sitting in their wheelchairs playing bingo?

 

[Darwin333]

How about we let anyone who wants to opt out of social security? Then it wouldn't have any solvency problems. People who want in can pay in. People who don't want in can not pay.

Because contrary to some peoples belief social security isn't a retirement plan you are paying into. It is a tax that was meant to raise revenue, plain and simple. You can't opt out of Federal income taxes either.

 

[Darwin333]

Just remove the SS Cap. It makes no sense. A Person making $20,000 gets no break on paying the SS Tax so why should a person making 100,000,000 get a break? Make them pay the same percentage? Now that would be fair.

I think it would be funny as hell watching some of your heads explode if you did that and had to hear about rich people getting $10K a month social security checks.

 

[Red Dawn]

So SS is welfare? SS is taking from productive people and giving the money to unproductive people just sitting in their wheelchairs playing bingo?

Well at least you'll be good for one thing.

 

[ModerateRepZero]

So SS is welfare? SS is taking from productive people and giving the money to unproductive people just sitting in their wheelchairs playing bingo?

No, it's not. In order to GET Social Security, you either:

1) have to have qualified under your own earnings record

or

2) have to have qualified under someone else's work record (usually a spouse or parent)

In Social Security, anyone receiving benefits must have had someone contribute prior. For example, a child doesn't get Social Security disability benefits if the parent never received Social Security benefits, period.

The question of people living longer and receiving more benefits than their contribution is a different topic, but there is no "free lunch" for Social Security. SSI is a different matter....