Posted on 09/05/2021 6:35:51 PM PDT by SeekAndFind
A social safety net is synonymous with a failsafe for many, but, as Statista's Katharina Buchholz notes, in the case of the U.S. Social Security system, additional action is needed to ensure it stays that way.
The annual OASDI trustees report by the Social Security Administration, covering old-age, survivors and disability insurance, shows that under the present circumstances, the asset reserve dedicated to the benefit program could be depleted sooner rather than later. Under the report’s intermediate scenario, asset funds would run out sometime in 2034, while this could happen as soon as 2031 if the administration was to shoulder a high volume of costs in the upcoming years. Under the low-cost scenario, the fund could remain solvent until 2052 or even longer, depending on the calculation. The intermediate date moved forward by one year since last year’s report as the COVID-19 pandemic seriously diminished Social Security’s income in payroll taxes.
The system’s expenditures have been above its income for some time – with the difference being taken out of the asset fund and the interest it creates - but the gap has been widening over the years. While in the early 1980s, summarized OASHI costs only exceeded incomes by around 15 percent, that gap grew to almost 26 percent in 2021. As Baby Boomers retire and Americans are having fewer children, the balance between those who are working and funding social security and those who are receiving old age, survivor or disability benefits continues to tip. 2021 marked the first year when interest earned on the fund could no longer bridge social security’s spending gap, sending the asset reserve into a downward spiral.
You will find more infographics at Statista
Because Social Security services are funded by the payroll tax on a pay-as-you-go basis, the income-cost gap equals the amount the administration would no longer be able to pay out if the fund would in fact be depleted. In order to stop funds from running low, Congress would have to act to provide additional revenue to Social Security, for example by raising the dedicated payroll tax, to lower its cost by cutting benefits or attempt a combination of both.
They could make it that anyone who has over $1,000,000 in their 401k or IRA will be ineligible for their Social Security.
They will simply keep printing money like they have for years.
They MIGHT do those, but they really don't have to.
(1)They could fund the Social Security shortfall with payments out of the general fund. Since Social Security payments out have exceeded receipts for some time, that is no change from what we've already been doing.
(2) Without raising taxes, they could just increase the size of our national debt to raise the money. Since our national debt has been going up anyway for decades, that is ALSO no change from what has already been happening.
They'll do that before they take any action which is too politically unpopular. They may still means test benefits, and they'll use the excuse that it is to stabilize the Social Security System, but the hidden primary motivation will rather be to punish successful people.
Eventually, we'll see hyperinflation. We got away with it because the world is basically using it as the world's reserve currency. But if more and more people are using bitcoin, watch out.
“They can borrow and spend trillions at will. I don’t see the problem.”
You are correct. This country is becoming increasingly socialist day by day. Thus I don’t see SS going away. They will increase retirement age and increase taxes and drive on.
Or a cash out option, age 65 just the amounts you paid in, No Medicare.
“They can borrow and spend trillions at will. I don’t see the problem.”
We’ll just have the Fed print the digits.
“ANY plan to fix Social Security will have some combination of these changes to the program.”
Only if you assume it’s a closed system.
It’s not.
The Fed can print the digits for Congress to “borrow” and never pay back.
Just another legislative “fix” that’s available.
The fund already has run out, spent through the general fund and now consists of IOU’s from the government.
Thus benefits will be paid only if the government can tax or borrow more.
*Or a cash out option, age 65 just the amounts you paid in, No Medicare.*
A 1% interest over a lifetime and then a washout would be fine with me. Where do they get the washout money? Promisary note? It’s punishing everyone who could invest better. The public school system his run better.
Baby boomers should fix and end it. The last one was born in 1964. 100 years to 2064. 43 years. Think of the guy who wanted to lay down in front of George Wallace’s car.
That’s cashout. Someone is trying to correct my spelling
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