Yes, send me all your money. I want to buy some sable slippers for my doggie.And lucky us Generation X & Y’ers that are responsible enough to save for a rainy day or two that get to support them!
And lucky us Generation X & Y’ers that are responsible enough to save for a rainy day or two that get to support them!.....I HIGHLY doubt you have, or are.
Yes, send me all your money. I want to buy some sable slippers for my doggie.I don't think so, I've been donating thousands, upon thousands of dollars of my hard earned money into Social Security since 1965, long before you were born.
I officially "semi" retire on Monday, at which time I'll begin working 3 or 4 hours a day from home because they begged me too.
“And lucky us Generation X & Y’ers that are responsible enough to save for a rainy day or two that get to support them!”
I’m a GenX’er. And I save. I save until it hurts.
I look at articles that demonstrate how little the average American saves and it’s appalling! We’re not taught finance and economics properly! I suppose the subjects are too liberating.
I work in finance, and some very smart people, in finance, are not putting anything away, zero!
I tell them, man, you need to start and yesterday! Tax deferred, compounding interest, employer matches and the time value of money.
Though I will admit, I look at our nest egg and often think of what a political target that must be for far too many...
Social Security has always been an inter-generational income transfer program. Benefits for any given generation are paid by an earlier one.
However, Boomers have found themselves in a difficult position, due to Congress undermining Social Security in the 70's. Benefits were raised higher than could be sustained, on an actuarial basis.
It became obvious that it would run out of money when Boomers retired, so taxes were increased about 50% in the 80's. That's part of the reason why many Boomers haven't saved enough on their own. But, Boomers found themselves paying for the Social Security benefits of their parents and grandparents, and pre-paying a substantial part of their own benefits. That's why the Trust Fund has about $2.7 billion in it right now.
But there's a problem: the economic and demographic assumptions were too optimistic. Social Security was supposed to be actuarily sound for 75 years (i.e. until 2060 in 1985), but now it's only expected to last until 2034. At that point, Social Security will exhaust the Trust Fund, and by law, can only pay benefits that are funded by incoming tax revenue. They can't borrow money. At this time, it's estimated that benefits must be cut 21 percent, across the board.
Baby boomers wrote their fate more than anybody else. They thought that big government was a great thing.
This problem wasn't created by the Boomers. It was Social Security beneficiaries back in the 70's that created it -- they were a formidable lobby, led by the AARP. Social Security was considered the "third rail", and anyone who even suggested touching it was burned badly. That's why these unsustainable changes were made to Social Security. But since then, no substantial group of people have been willing to advocate the changes that are needed.
Freepers are better informed than most LIVs, but I've found that even Freepers have their head in the sand when it comes to Social Security. They won't accept that while they personally aren't responsible for the plight of Social Security, they have to share the pain of fixing it.
The usual meme is "they stole money from Social Security". No, every dime is accounted for: Social Security loaned excess taxes to the federal government, as specified in the original legislation. That's what is in the Trust Fund: special obligation Treasury bonds.
What the federal government did back in the 60's: they borrowed money from Social Security, but didn't add it to the official deficit. So, the $19 trillion debt is actually about $22 trillion, when you add in the obligations to Social Security. There are also additional obligations to federal employee pensions, but that's another subject.
Social Security stopped collecting enough taxes to pay benefits a few years ago -- about 5 years earlier than expected, due to the recession. So, the Trust Fund is being drawn down, as expected. The rate of withdrawal will accelerate, until it's all gone.
We missed the chance to fix Social Security back in the 80's. Other countries like Chile, Australia, New Zealand and Singapore have discarded inter-generational transfers in favor of an asset-based system, sort of like a national 401(k). The (second) Bush administration suggested that option, and was shouted down.
At this point, we really only have two choices: raise taxes, or reduce benefits. Taxes have to be raised substantially, or benefits have to be reduced, substantially. The Social Security administration has pages of proposals they have evaluated, and none of the popular options (like means testing) make any significant difference -- the best they do is kick the can down the road a little longer.
At this point, you may be ready to click that post button and flame me. Don't waste your breath, because I've studied this for the past year, trying to quantify the effect on my retirement plans. If you have a question, I'll try to answer it. But, if all you want to do is bitch about how it's someone else's fault, you are wrong. Collectively, the fault belongs to all of us, because we let Congress take the easy way out.
Let's get these out of the way immediately: The Disability Insurance (DI) program is certainly being abused, but it's separately funded and accounted. The old age and survivor insurance (OASI) program funds retirement benefits, and even outright elimination of DI wouldn't fix Social Security. And while the Supplemental Security Income (SSI) program is administrated by Social Security, but is funded separately from the general fund.
Here's the absolute truth about what went wrong: Social Security has been paying more money that it can afford to your grandparents, parents, and you -- in the past, now, or in the future. That's what happened to most of the money, leaving current and future taxpayers holding the bill.
If you still want to blame someone else, I'll leave you with this quote. I can't take credit for it, but I think it fits this and many other situations:
Conspiracies make things easy. If there's a conspiracy, you can blame it for any problem, and your own problems, and not do anything, because there's no point. It's much easier then self-responsibility.