What will happen if Social Security goes bankrupt?

[sandmanwake]

Not saying it will; maybe it'll be fixed and all that other good stuff (I'm not planning on it though). However, given the event that the SS system does collapse, what sort of provisions have been proposed to handle the situation? Will everyone who paid into SS get a refund or will everyone have to suck up the loss and life goes on?

Also, how does government "borrow" from social security? I thought that the current work force pays into social security to help retired and disabled people with a little extra income. When the government "borrows" from SS, does this mean that everyone working is paying more than they really need to not only support retired/disabled people, but also to fund some government programs? Or does it mean that the people who are supposed to be receiving SS not getting as much money as they could have had the money not been "borrowed"?

 

[MoMeanMugs]

The question is not if, but when. That program will be long gone by the time you want to collect on it. The only thing you are putting money into it now is for the old people of today. The old of tomorrow aren't going to see a red cent.

 

[Evadman]

ummm.. then no one gets any more $$. Unless I missed something.

 

[glenn1]

Another forum member whose opinion i respect even if i disagree with it (no names, but he's a well-known member of ATOT), had a furious row over this very subject a while back. My POV was that Social Security is an unconstitutional ponzi scheme which has reduced the elderly to pickpocketing their own children and grandchildrens' futures. I also feel that the people of my generation (32) will be the ones left holding the bag when the game of musical chairs stops (and partly by our own choice, because we will refuse to subject our children and grandchildren to the same cruel joke).

The other member feels differently. He believes that SS is financially strong, and will be a permanent fixture of American life for the ages to comes. He also believes that it's the current working age generation's duty to provide SS to older Americans.

You decide which vision is the more likely.

 

[glenn1]

<< Also, how does government "borrow" from social security? >>



And to answer your other question, the government "borrows" from Social Security by spending the payroll taxes as they come in, and leaving an IOU in its place. There's no big pile of money sitting somewhere in the "Social Security Trust Fund."

Essentially, what Uncle Sam does is the equivalent of writing yourself a little note saying, "when i turn 65 i'll pay myself a million dollars," and counting that million dollars as being part of your current net worth.



<< However, given the event that the SS system does collapse, what sort of provisions have been proposed to handle the situation? Will everyone who paid into SS get a refund or will everyone have to suck up the loss and life goes on?

does this mean that everyone working is paying more than they really need to not only support retired/disabled people, but also to fund some government programs? Or does it mean that the people who are supposed to be receiving SS not getting as much money as they could have had the money not been "borrowed"? >>



None, suck it up, yes, and yes.

 

[charrison]

It is a cruel joke.

 

[sandmanwake]

So how much does a person receive from social security now anyway? Is it enough to live off of?

By the way I remember someone's argument for social security being that social security allows retired people to live on their own and not be a burden to their children thereby retaining some of their dignity. However, I know some people who are retired now who even with social security still have to live with their children. Are these just rare cases?

 

[XMan]

Essentially, what Uncle Sam does is the equivalent of writing yourself a little note saying, "when i turn 65 i'll pay myself a million dollars," and counting that million dollars as being part of your current net worth.

Hmm, the SEC would probably go after most private corporations for doing something like that. 🙂

 

[kranky]

I think the maximum benefit for someone who retires now is a little over $1500/month. The average is about $1000/month.

 

[vi edit]

SSN payouts right now barely pay required living expenses. With health insurance alone easily able to reach $500 + dollars a month for someone over 65 years old, a $1000 a month check doesn't leave much else to tinker around with.

If an elderly person has to be put into a retirement/assisted living home, you could be looking at $20,000 a year or considerably more depending upon the level, and quality of care.

Bottom line is, SSN even in it's current condition is barely enough to cover living expenses.

It's only going to get worse.

You'll never see anything change though. The democrats won't touch it because it hurts their "welfare" image, and the Republicans will never agree to change it because it would spell political suicide since nearly 50% of their voters are either currently collecting social security, or will be within 15 years.

It's a ponzi scheme from the getgo and only leave many of us bitter and pissed of at the government for taking 7%(14 counting employer contributions) of our salaries for our entire life only to be given nothing when we could use it.

Right now, my g/f and I put in almost 35% of our salary into long term investments without any hopes of ever seeing a dime of SS. I would advise anyone under the age of 30 to do the same.

<- One Social Security annoyed 24 year old.

 

[alrocky]

If SS goes belly up, you may have to move in with your kids. You do have (or plan to have) children and have a good enough relationship for them to allow you to move in? I hope noone thinks of SS as their <U>sole</U> source of income for their retirement. You should have a 401k or like and IRAs etc. to live out your golden years.