# Social Security--should I plan on it existing in 30 years or not? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [February 1, 2015, 8:21pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540 "2015-02-01T20:21:51Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Little\_Pig](https://avatars.discourse-cdn.com/v4/letter/l/c57346/32.png) [@Little\_Pig](https://boards.straightdope.com/u/Little_Pig)\ **Post date:** [February 3, 2015, 10:40am UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/41 "2015-02-03T10:40:22Z")
> [@Stringbean](#): > > Social Security was always meant as supplemental retirement income, or mere insurance that you don’t starve to death a wrinkly pauper. > > The problem is all these people who don’t save anything and then expect to live off of Social Security. My generation (Millenials) knows that’s a joke, and we don’t expect jack shit from SS given how vociferously greedy our elders act whenever the notion of reforming the system is brought up. > > You old fogies are a shameless bunch. The lesson of entitlement. Can you be more specific Stringbean? I’ve paid into this system my entire life. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [February 3, 2015, 3:06pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/42 "2015-02-03T15:06:30Z")
Paid enough into it to get 80% of promised benefits. Let’s be clear on that. If you want more than 80%, you have to pay more. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [February 3, 2015, 4:35pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/43 "2015-02-03T16:35:29Z")
> [@adaher](#): > > Paid enough into it to get 80% of promised benefits. Let’s be clear on that. If you want more than 80%, you have to pay more. ??? There are only two ways to pay more. 1 make more. 2 change the laws determining how much you pay. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [February 3, 2015, 4:45pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/44 "2015-02-03T16:45:43Z")
> [@Duckster](#): > > It’s one thing to discuss the viability of social security (and any retirement funds we all are supposed to be building as well), and forget there is a large push by the current majority in Congress to privatize it, or eliminate it entirely, the public be damned. The call for privatizing SS is because of the low pay back for what you put in. I paid into SS over $125,000 that also means my employers put in another @125,000, for a total of $250,000. Over 40 years. And a lot of that was put in when a 1.00 was worth .50. I get paid back in dollars that are worth $0.10. (Ok I so I am a little overboard). If I had put the money just in a bank at simple interest how much would I have? I bet I could live very well just off the interest… I might work up a spread sheet later today. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [February 3, 2015, 4:57pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/45 "2015-02-03T16:57:46Z")
> [@Wesley\_Clark](#): > > Obama called for a donut hole, a hole of about 250k, then 4% above that. > > People all pay the same medicare tax and they all get the same program in retirement ever since Clinton removed the medicare cap in 1993. It hasn’t resulted in social revolution yet. In fact under the ACA some wealthy people are now paying 3.8% instead of 2.9%, and the program is still alive. > > SS is a progressive system in how it pays benefits, you only get 15% of income above about 5k a month, so I don’t know to what degree that would continue. Maybe a lower rate of return, I’m not sure. > > Means testing doesn’t close the gap by much, while raising the cap does. Yes, I agree, it time to get rid of the limit of taxes- while NOT increasing the maximum benefits paid out. And, since I now earn more than the limit, this would hit me in the pocketbook. Also we need to raise the ages. For those 60+= none. 50-60= +1/2 year, 40-50+ 1, 35-40= +1.5, 30-25= =2, etc. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [February 3, 2015, 5:03pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/46 "2015-02-03T17:03:35Z")
> [@Snnipe\_70E](#): > > ??? There are only two ways to pay more. 1 make more. 2 change the laws determining how much you pay. True. But as of right now, you are only paying enough to get 80% of the benefits they are promising. That is what you are entitled to. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [February 3, 2015, 5:05pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/47 "2015-02-03T17:05:36Z")
> [@DrDeth](#): > > Yes, I agree, it time to get rid of the limit of taxes- while NOT increasing the maximum benefits paid out. And, since I now earn more than the limit, this would hit me in the pocketbook. > > Also we need to raise the ages. For those 60+= none. 50-60= +1/2 year, 40-50+ 1, > 35-40= +1.5, 30-25= =2, etc. It’ll take more than that to cover the shortfall. The donut hole means that only half of the shortfall will be covered. The upper middle class is where the money is, not the wealthy, because for every guy making $1 million there are like 40 people making $200,000. Or, we could continue to have SS be as it was intended: worker contributions pay directly for benefits. Increase the payroll tax. Now, not when all the Boomers are retired. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [February 3, 2015, 5:05pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/48 "2015-02-03T17:05:54Z")
The most common, and to my mind most reasonable number to use for retirement planning on the time-line you are mentioning is to count on somewhere between 50-75% of projected benefits. This should cover most bases that are political reasonable. If larger changes than that happen then the financial landscape is probably so different (taxes, healthcare, etc) that even the best plans laid now will have to be modified. > [@Snnipe\_70E](#): > > The call for privatizing SS is because of the low pay back for what you put in. I paid into SS over $125,000 that also means my employers put in another @125,000, for a total of $250,000. Over 40 years. And a lot of that was put in when a 1.00 was worth .50. I get paid back in dollars that are worth $0.10. (Ok I so I am a little overboard). If I had put the money just in a bank at simple interest how much would I have? I bet I could live very well just off the interest… > > I might work up a spread sheet later today. The average return for SS benefits is not that terrible on a risk- and inflation-adjusted basis. Some numbers from during the 2012 presidential campaign here: [http://www.reuters.com/article/2012/10/18/us-column-miller-socialsecurity-idUSBRE89H0YG20121018](http://www.reuters.com/article/2012/10/18/us-column-miller-socialsecurity-idUSBRE89H0YG20121018) You almost certainly could not beat SS returns after-tax, even including inflation, just by using a bank account. You would have to be invested in much riskier assets. Of course, SS is a pension, so your longevity plays a huge role in the expected return. You should really consider what your contributions would have grown to and then what type of single-premium annuity you could purchase with that money at retirement - then compare the payments from that annuity to your SS payment. You also have to consider the tax implications (interest from your bank CD is taxable, some of your SPIA proceeds would be, a good portion of SS benefits are not - depending on other income sources). ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [February 3, 2015, 5:20pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/49 "2015-02-03T17:20:50Z")
> [@adaher](#): > > True. But as of right now, you are only paying enough to get 80% of the benefits they are promising. That is what you are entitled to. I am getting around what I expected. Not sure where you are getting the 80%. Where they are stabbing me in the back is I have to pay income taxes on 85% of my SS payments. To me that is the same if they taxed payments from Roth IRA’s. I already paid taxes on the money that went into SS. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [February 3, 2015, 5:21pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/50 "2015-02-03T17:21:54Z")
28% of voters in 2012 made $100K or more: > **[Exit polls 2012: How the vote has shifted - The Washington Post](https://www.washingtonpost.com/wp-srv/special/politics/2012-exit-polls/table.html)** > > See how much voter groups have shifted in the 2012 exit polls, compared to 2008. Early numbers are preliminary and may change significantly until midday Wednesday, when poll results are finalized. Each state's data will be available after their polls... If 28% of voters get a negative return from the SS system, the program becomes just another welfare program. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [February 3, 2015, 5:24pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/51 "2015-02-03T17:24:53Z")
> [@Snnipe\_70E](#): > > I am getting around what I expected. Not sure where you are getting the 80%. > > Where they are stabbing me in the back is I have to pay income taxes on 85% of my SS payments. To me that is the same if they taxed payments from Roth IRA’s. I already paid taxes on the money that went into SS. That was Democrats’ way of doing a benefit cut without saying it was a benefit cut. Not that it wasn’t justified. If you are a retiree now, you paid even less in commensurate with what you are getting out. What was your tax rate when you first started working? 2%? The government is merely making up for your taxes being too low to cover expected benefits when you were younger. ---
**Author:** ![iiandyiiii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/iiandyiiii/32/7924_2.png) [@iiandyiiii](https://boards.straightdope.com/u/iiandyiiii)\ **Post date:** [February 3, 2015, 5:27pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/52 "2015-02-03T17:27:55Z")
> [@adaher](#): > > If 28% of voters get a negative return from the SS system, the program becomes just another welfare program. By that definition, it’s hard to find a government program that’s _not_ a “welfare program” by some or other definition. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [February 3, 2015, 5:28pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/53 "2015-02-03T17:28:47Z")
Right now, Social Security is NOT such a program. That’s why it’s so sacred and a third rail in politics. Everybody wins! Once a large number of voters have an economic interest in benefit cuts, benefits are a lot more likely to be cut. You all seem to realize that means testing would create that result. Eliminating the tax cap does exactly the same thing. And the Democrats know what political dynamite it is, that’s why the only chance in hell they have to doing it is to put a giant donut hole in there that means the problem won’t be solved anyway. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [February 3, 2015, 6:09pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/54 "2015-02-03T18:09:27Z")
> [@ITR\_champion](#): > > This is just not right. > > The Trustees of Social Security [say](http://www.ssa.gov/OACT/TRSUM/index.html): > > After 2019, Treasury will redeem trust fund asset reserves to the extent that program cost exceeds tax revenue and interest earnings until depletion of combined trust fund reserves in 2033, the same year projected in last year’s Trustees Report. Thereafter, tax income would be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2088. > > So long-term, the system cannot continue as it exists now. When things were booming in the mid to late 1990s, the date at which the trust fund would be exhausted kept moving further and further away. AFAICT, this would happen again if we finally had a decent economic recovery. But even absent that, the consequence of the exhaustion of the Trust Fund would be a 25% reduction in benefits, as your quote says. > [@](#): > > Neither can Medicare. Although the picture for Medicare has improved greatly since the implementation of Obamacare. Some of those reforms that were part of the package have really been making a difference. > [@](#): > > Veterans Affairs will be costly as well, but not nearly as big a problem as those two programs. I’ll confess to knowing nothing about the finances of VA. But just the much smaller number of persons affected should make manageable whatever worst-case scenario it’s got. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [February 3, 2015, 6:11pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/55 "2015-02-03T18:11:19Z")
There’s disability too. That’s insolvent in only a couple of years. The President’s plan is to take money out of SS to shore up disability. Which would make SS benefit cuts come sooner. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [February 3, 2015, 6:24pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/56 "2015-02-03T18:24:07Z")
> [@adaher](#): > > There’s disability too. That’s insolvent in only a couple of years. The President’s plan is to take money out of SS to shore up disability. Which would make SS benefit cuts come sooner. SSDI is about 80% short. That one is a bit easier, politically, to solve for obvious reasons (fewer recipients per contributor, basically). A 10% benefit cut and tightening of requirements would probably do it. Some of the increase in the rolls is due to the bad economy too (although nobody is really sure how much). It’s also not really relevant to the OP, since I doubt he’s including potential disability benefits in his retirement plan. I do agree that eliminating the cap is probably not the answer, for precisely the reason you provided. It seems pretty clear that a modest benefit cut (likely via CPI changes) and a modest tax increase (likely making it a bit more progressive than it already is) is the deal that will have to get cut at some point. The situation has to get much, much worse though before either side will feel enough pain to make a change. I still think the prudent course for financial planning is to assume a 75% benefit, treat it like a pension, and calculate your remaining required assets to support retirement spending at a 4% safe withdrawal rate (or whatever scheme you prefer). ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [February 3, 2015, 6:58pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/57 "2015-02-03T18:58:35Z")
> [@adaher](#): > > 28% of voters in 2012 made $100K or more: > > [http://www.washingtonpost.com/wp-srv/special/politics/2012-exit-polls/table.html](http://www.washingtonpost.com/wp-srv/special/politics/2012-exit-polls/table.html) > > If 28% of voters get a negative return from the SS system, the program becomes just another welfare program. However, most people don’t make the same salary for the entirety of their working career, and SocSec is based on your highest 35 years of earnings. Even somebody who has very high wages late in their career may have quite a few years of sub-$100K earnings averaged in, and hence may be a net gainer. ---
**Author:** ![Stringbean](https://avatars.discourse-cdn.com/v4/letter/s/d6d6ee/32.png) [@Stringbean](https://boards.straightdope.com/u/Stringbean)\ **Post date:** [February 3, 2015, 7:48pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/58 "2015-02-03T19:48:35Z")
> [@Snnipe\_70E](#): > > Wrong. Social Security was passed as part of the New Deal. It was passed to improve employment opportunities for those without a job in the depression. The Idea was those over 65 could retire and live off SS. Creating vacancies in the work force. During the debate in the 1930s, the program was referred to as “social insurance.” Insurance against dying of poverty. It was not ever intended to be a 401(k) and people like yourself who attempt to redefine it as a retirement pension program are doing us all a disservice by over-inflating what it really provides to people. ---
**Author:** ![Stringbean](https://avatars.discourse-cdn.com/v4/letter/s/d6d6ee/32.png) [@Stringbean](https://boards.straightdope.com/u/Stringbean)\ **Post date:** [February 3, 2015, 8:00pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/59 "2015-02-03T20:00:15Z")
> [@Little\_Pig](#): > > Can you be more specific Stringbean? I’ve paid into this system my entire life. The largest organization for the elderly, AARP, has [this](http://www.aarp.org/about-aarp/press-center/info-06-2011/aarp-has-not-changed-its-position-on-social-security.html) to say on it: \* “Let me be clear – AARP is as committed as we’ve ever been to fighting to protect Social Security for today’s seniors and strengthening it for future generations. Contrary to the misleading characterization in a recent media story, AARP has not changed its position on Social Security. “First, we are currently fighting some proposals in Washington to cut Social Security to reduce a deficit it did not cause. Social Security should not be used as a piggy bank to solve the nation’s deficit. Any changes to this lifeline program should happen in a separate, broader discussion and make retirement more secure for future generations, not less. “Our focus has always been on the human impact of changes, not just the budget tables. Which is why, as we have done numerous times over the last several decades, AARP is engaging our volunteer Board to evaluate any proposed changes to Social Security to determine how each might – individually or in different combinations – impact the lives of current and future retirees given the constantly changing economic realities they face…"\* Evidently, AARP won’t acknowledge that Social Security [added $53 billion to the deficit in 2013](http://www.politifact.com/wisconsin/statements/2013/apr/26/mark-pocan/social-security-doesnt-add-federal-deficit-us-rep-/) and wants to both own and eat its cake: let’s “strengthen” Social Security without any negative consequences. AARP even [rebuked](http://www.aarp.org/politics-society/advocacy/info-02-2013/the-chained-consumer-price-index-explained.html) President Obama’s calls to adjust cost-of-living based on Chained CPI, a move considered fairly amenable to both sides in Washington. In short, your generation’s logic that “I bought into this program my whole life” fails to justify the harsh opposition to any reform that is proposed. You old-timers look foolish and greedy to those of us who must face the reality of the coming decades. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [February 3, 2015, 8:31pm UTC](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540/60 "2015-02-03T20:31:06Z")
> [@Stringbean](#): > > Evidently, AARP won’t acknowledge that Social Security [added $53 billion to the deficit in 2013](http://www.politifact.com/wisconsin/statements/2013/apr/26/mark-pocan/social-security-doesnt-add-federal-deficit-us-rep-/) and wants to both own and eat its cake: let’s “strengthen” Social Security without any negative consequences. Because in real terms it didnt. The only reason why SocSec added to the debt (by only one of several ways of calculating debt) is that it finally started to cash in it’s IOU’s, ie the Trust Fund. So, in the past SocSec has lend the US $$, now it’s getting a small % of it back. Think that this “contributes to the Deficit” would be like lending your deadbeat BrotherInLaw $5000 a year for 10 years, and then asking for $1000 of it back- and him complaining you’re “making his debt worse”. \*From 1984 to 2009, Social Security collected more money in payroll taxes than it paid out in benefits. That surplus was transferred from the Social Security program to the federal government’s general fund. In return, the Treasury gave Social Security bonds that it could redeem to pay future benefits. The government, in turn, incurred obligations to repay the bonds, plus interest, to the Social Security trust fund. Since 2010, Social Security has been paying more in benefits than it has collected in payroll taxes. To meet its payments, Social Security began redeeming the bonds, plus interest, from the federal government. In other words, money was transferred from the government’s general fund to Social Security.\* [Previous page](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540.md?page=2) [Next page](https://boards.straightdope.com/t/social-security-should-i-plan-on-it-existing-in-30-years-or-not/711540.md?page=4)