The 2042 date polymur gives includes that spiffy IOU that Uncle Same gave the Treasury when he went out and spent almost all of the SS trust fund.
If you do honest accounting, the real trust fund disappears by 2010. (It was 2012, but a lot of jobs keep disappearing.)
If I give myself a muti-trillion dollar IOU, I don’t have a trillions of dollars. A company that did this trick would be dragged into court and hung upside down.
There’s only a small number of solutions to the problem. Two prominent ones that have been mentioned are raise taxes or cut benefits. A third one that some surprising people are promoting is:
Get a lot of people to immigrate to the US. A lot. Think of well over a hundred million workers. Esp. young workers. That increases the ratio of workers to retirees. Also make sure that any current illegals get made legal. Illegals don’t pay a lot of FICA taxes.*
Some people you would think would be naturally against such a plan turn out to be for it. That’s because they want to postpone the SS doom. (It’s not a fix. The immigrants will retire too!)
*Note: I am pro-immigration, but not for this reason. Smaller scale stuff.
ftg, if you’re right about the system going BK in 2010, this is something I really would like to know about. Do you have a reference where I could read more about it?
What I have a hard time understanding is if net inflows of FICA taxes exceed payments until 2018, where does the shortfall occur? Perhaps in the interest payments SS is receiving on their loans?
Additionally, is the multi-trillian IOU that you refer to represented by the government bonds it purchases (not that thiswouldn’t still validate of the idea that the government is lending money to itself to pay off other debts) or is it something different?
I am truly interested in finding a place to learn more about this.
…is the scandal of SS disability pensions! Check you SS statements…you get much MORE if you retire NOW on a disability pension, rather than wait for retirement! This scandal is never talked about,but we have lawyers advertising HOW they can GET you a SS disability pension! There are ENTIRE towns in West Virginia, with everybody “retired” on disability (these are mostlt ex-coal miners who chose to stick around when the coal mines closed down. These fraudulently-obtained pensions are a major reason why SS is going bankrupt rapidly! Nobody cares-the lawyers are gettingfat fees, and the “disabled” pensioners get to go fishing on YOUR money!
This is why a system like SS is bound to fail-there are all kinds of incentives to cheat, and no incentives to be honest.
I’ve writtent several letters to my congressmen about this…apparently, they don’t care! :eek:
Before you go off on means testing, read my post. I proposed means testing, yes. But I also proposed in exchange you wouldn’t pay income taxes on the money you take out of your 401k (pension program, etc).
Ok, I’m almost 27. How old will I be when I’m losing over 45% of my earnings to SS taxes? I’m personally predicting this is the most likely senario by 2020, when all the boomers are old enough to retire. God forbid they not get to retire at 67.
On the other hand, I don’t think the tax burden would stay that way very long, because murders of the elderly would probably skyrocket as well. Nothing like seething resentment to convince people who aren’t wrapped too tight to go on murderous rampages…
Social Security is intrinsically flawed for the same reason why the collective farming system of the Soviet Union was intrinsically flawed. History shows us that collectivism doesn’t work.
My solution would be to dump Social Security entirely, and replace it with an IRA type fund to which my employer and I would contribute. In other words, privitization of the entire system. It’s that or bankruptcy, frankly, and I know Social Security will collapse, just like all forms of socialism ultimately do.
Most Financial Advisers Wrong on Retirement Targets: John Wasik
March 29 (Bloomberg) – When you ask your financial adviser ``How much will I need to retire?’’ the chances are you’ll get a wrong answer.
The problem is that financial planning has become a moving target largely because funding for Social Security, Medicare and employee retirement and health benefits are in doubt.
Your retirement kitty may need to be bolstered considerably if major government benefits come up short.
The Medicare Trust fund, for example, is projected to become insolvent by 2019, the trustees of the fund reported on March 23. And in 14 years, the Social Security system – a $3.7 trillion unfunded obligation over the next 75 years – will start spending more than it receives.