Posted on 01/06/2020 7:48:26 AM PST by SeekAndFind
2020 is here, and many people are excited about starting a new decade. Yet for those who watch Social Security's financial condition, New Year's Day just means we're a year closer to the challenges facing the key government program.
This year is likely to be the last one that Social Security manages to keep its spending under a key psychological level. Starting in 2021, the amount of money that the Social Security Administration spends on benefits for retirees and survivors of retired workers will exceed $1 trillion for the first time -- and that's just the beginning of an upward surge that will pose problems for the program's finances sometime during the 2030s.
This might not be the first time you've heard about Social Security flirting with the $1 trillion mark. In 2019, the total expenditures from the entire Social Security program -- which include not only retirement and survivor benefits but also the payments it makes to disabled workers and their families -- went over $1 trillion for the first time in the program's 83 years.
Yet even though millions of people rely on disability benefits, the retirement side of Social Security makes up by far the majority of total spending from the program, and so it's in position to follow suit over the $1 trillion mark in quick succession. In 2019, about 90% of scheduled benefits were tied to retirement, compared with just 10% in disability benefits. Few see that proportion changing markedly anytime in the near future.
Moreover, the amount that the government spends on retiree benefits will only rise over time. By 2028, Social Security retirement and survivor benefits will likely cost more than $1.5 trillion, and with payroll tax revenue failing to keep up with that surge, the program will be drawing down nearly $200 billion per year from its reserves to pay scheduled benefits at that point.
There's no agreement in Washington about how to solve the problems that Social Security faces. Some believe that reining in the rate of growth of future benefits is the best way to control spending. And measures like tying future increases in benefits related to costs of living to indexes that grow more slowly than the current inflation metrics could help preserve the program's financial condition longer.
In the past, Social Security has gradually raised the full retirement age, at which participants are entitled to receive full benefits under the program. And some lawmakers have proposed further increasing the full retirement age in an effort to save even more over the long run. Yet for the most part, these measures are aimed merely at slowing the rate of growth in Social Security spending rather than actually reducing it.
Other lawmakers believe that the better solution is to look at program revenue. In particular, one popular provision would lift the current cap on the Social Security wage base, potentially making more income subject to Social Security taxation and thereby boosting revenue. Some of those advocating for a higher Social Security payroll tax would actually seek to increase benefits, with the corresponding rise in the rate of spending from the program.
The demographic surge of baby boomers who are collecting Social Security benefits has boosted the cost of the program immensely over the past several years, and it'll be a long time before death rates among that cohort rise enough to let up the pressure on Social Security expenditures.
Until that happens, you can expect to see total spending on retirement benefits continue to rise. And without action from Washington to bring revenue and expenditures into balance, that will inevitably lead to a massive disruption for those receiving Social Security benefits in the future.
Boomers will be dead by 2054 so all the social security problems will be over.
SS should be for the person and spouse. What’s with money for kids. SVP RETIRED at work age 62. Wife 42. 3 kids under 8. Wife bragged they would get 1k per kid long time.
What’s really funny is that I am 1 1/2 years away from being eligible for SS.
After deducting the increase in my Medicare premium, I end up with a $17/mo raise.
SS must just like me better.
Maybe if Congress stopped stealing the money from social security and allow us to invest like they did in several places around the country to get much higher returns.
I really hate these thieves.
How Three Texas Counties Created Personal Social Security Accounts and Prospered
https://www.forbes.com/sites/merrillmatthews/2011/05/12/how-three-texas-counties-created-personal-social-security-accounts-and-prospered/#51a0e7ec3283
And those who retire under the Galveston model do much better than Social Security. For example:
A lower-middle income worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan, according to First Financial’s calculations.
A middle-income worker making $51,200 would get about $1,540 monthly from Social Security, but $3,600 from the banking model.
And a high-income worker who maxed out on his Social Security contribution every year would receive about $2,500 a month from Social Security vs. $5,000 to $6,000 a month from the Alternate Plan.
Forgot to add that my $17 raise will be subject to income tax.
There's a whole industry now that will teach children how to act during the doctor visit so that they qualify for these life-long payments.
“Crazy Checks.”
Nearly 400K Anchor Babies Born In 2019, Exceeding U.S. Births In 48 States
Well, it's working in Sweden, isn't it?
Oh. Never mind.
"Qualifying for U.S. Social Security Retirement Benefits
Most people who immigrate to the U.S. after reaching retirement age have not accumulated the requisite 40 U.S. work credits to qualify for Social Security, unless they've worked in the country for a cumulative 10 years, when they were younger.
However, those able to legally work in the U.S. for a year and a half after arriving, who earn at least $1,260 per quarter, may qualify to receive prorated U.S. Social Security benefits, under a totalization agreement with their countries of origin.
A totalization agreement is an arrangement between two countries with similar social security programs, that ensures workers and their employers don’t pay Social Security taxes on the same earnings, in two different countries, while preventing individuals from double-dipping when they claim benefits. The U.S. has an agreement with the following countries:"
Were you just posting this to support my statement?
I know this is anecdotal evidence, but after my Army buddy got hired to work for Social Security we were talking about it. He was hired as a Supplemental Security Claims Rep (which is a needs based disability program that pays a fixed much smaller amount than social security disability for children and adults who do not have enough work credits to be insured for Social Security Disability) but also takes initial claims for Social Security disability.
We were both agreeing that the hardest part of the job would be dealing with all the fakers trying to get disability. We both thought 80-90% of people filing were trying to game the system.
Fast forward about a year and a half. My buddy’s done with training and has been taking claims for a year. We talk again and he tells me we were horribly wrong. He believes it’s more like 70% are not faking. They have severe medical conditions that preclude them from full time employment. Only about 30% are faking and even then some do have medical problems.
He then goes on to tell me that in our state only 32% of initial claims are approved. He describes, with great sadness, how he has seen people and families lose everything waiting on their disability to be approved. Sometimes having to wait 3-5 years for their cases to go to a hearings level.
I trust my buddies judgement. Served with him overseas and would trust him with my life. So when he tells me this I have to believe it.
The surcharge is an extra penalty on top of the regular medicare deduction. More than wipes out the cola.
There is a “hold harmless” SS provision whereby your benefit can’t go down from the previous year UNLESS yor income exceeds a certain amount the previous year.
I just read Ponzi’s life story and it’s no where near that. Ponzi was accepting money voluntarily, SS takes it from you as a tax.
bmk
Exceeding the income limit was a thought I had after I replied.
It absolutely is NOT. We all PAY to participate. It should be a crime that the government has used those funds so foolishly rather than investing them. If the government tries to significantly cut benefits, there'll be hell to pay!
Which makes it worse. The STRUCTURE is the same.
That’s what makes it Ponzi scheme, not the fact it’s involuntary.
Tell you what. Go read the biography of Charles Ponzi then come back and we’ll chat some more; again, one was a tax and the other a voluntary deposit.
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