Why do projections like this seem to fail to take into account that those of us in Gen-X are by far the smallest generation since the great depression and that millennials are nearly as large a generation as the Boomers? Unless something goes disastrously wrong on the employment front, or boomers do in fact manage to live forever, those who will be of retirement age after the Boomers are gone will have a lot more working people younger than them to support them than boomers do and outlays should be considerably less massive anyway because there are so many fewer of us than our parents.
Even more important than generational issues… all the report concludes is that something must change.
Well, duh! :smack:
I mean, what doesn’t change? Let’s look at how we put SS into place to begin with: a brand new tax. And let’s compare the tax rates in the US to the rates paid by countries that pay for 100% of your college, health care and retirement. I’m not saying I want 50% income tax rates, necessarily. I’m just saying that there are already functional models of how a country might achieve this. If we wanted to fix it, we already know how. It’s not nuclear fusion.
It will be means-tested, possibly like Medicaid. If you have any other assets or income, you don’t get much.
Regards,
Shodan
Yes. It’s not going away. Expect some privitazion options, some increase freezes, and a increase in the age required to qualify. But as long as there is a USA, there will be SocSec.
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.
Despite the fearmongering(some of it justified), Social Security will be there when you retire. The most likely outcome is that it will pay out 80% of promised benefits, which will still be much more than what current retirees get in real terms. It’ll just be less than promised.
I would. The program itself can be saved with minor tweaks. The real risk to SS is people who want to destroy it for ideological reasons.
The tax rate is 12.4% and capped at about 95% of income (90 or 95, I can’t recall). Raise the tax to 14% and lift the cap (or eliminate it) and that’ll keep it solvent until the 22nd century without cutting benefits.
This seems like an effort to destroy the program by first turning it into ‘welfare’ where only people who didn’t save enough get it. After you build up resentment and divisions between the middle class, upper class and poor then you destroy the program. Means testing savings don’t seem very high compared to other ways to fix the program.
That only works if you don’t raise benefits for those paying in more. Politically and practically, it’s no different than means testing. Anyone making over the current payroll limit will now be net losers.
The payroll limit wasn’t put there to spare the rich. It was put there so that everyone was a winner and so that Social Security would be politically untouchable. Once even the upper middle class are net losers, it becomes just another welfare program, the same as if it’s means tested.
You were talking about how means testing creates resentments. How does taxing people more but not raising their benefits commensurately not create the same result?
Politically it’s a non-starter anyway, because the wealthier Northeast is going to demand a “donut hole” which will still mean that more measures are necessary to make the program sustainable. It’s easier to just let benefits be automatically cut. All fixes require Congress to make some people very angry, whether it be workers, the upper middle class, or retirees. Doing nothing at least means less accountability, so that will probably be what actually happens. If there was a way to fix SS that was politically possible, it would have been done already.
Thirty years? We’ll be lucky if young people are hunting us down and killing us by then, much less paying for our comfort in retirement. 
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.
The Social Security situation is less dire today than it was in the '80s. It does need to get fixed, but that will happen either when things look really bad or when my generation, who will be getting in in large numbers, starts to complain about the loss of benefits. We can easily vote for a higher cap, not paying in.
While I don’t depend on it (and everyone - save more!) the amount I’m expecting at 66 is nontrivial and far more than trip money. I’m maxed out. I suspect most people who are maxed out are not going to care that much about not getting an increase even if they raise the cap since we have other savings. That is, unless you throw your money away.
While Medicare is a bigger problem, the date when it runs out of money has been pushed back significantly due to lower than expected healthcare cost increases.
At my first real job, over 40 years ago there was a very vocal group pushing for an opt-out from SS because they were concerned it would not exist in the future.
I had read projections, which I thought were from the trustees, that the 3/4s gap would fix itself. Apparently that isn’t the current projection. The exact date the SS will start using it’s reserves changes every year. 2019 seems awfully close, but apparently that is what is being projected at the moment. That is likely to change, in either direction, several times before then. But the trustees affirm my basic point. SS will have enough funds to pay full benefits until the mid 2030s, about 15 years from now, and then the benefits will have to be reduced or taxes increased. I still believe that the hole will eventually fix itself for SS (not medicare), but the trustees look at the numbers and I don’t.
The cap is approximately 120,000 at this point. (It’s indexed to inflation, so it changes every year). I’m not sure about a 95% level, but that probably is looking at all wages throughout the country. When looking at individuals, the majority of people pay the tax on 100% of their earnings… while the highest earners can pay the tax on a pretty small percent. At a 250k salary, you’re only paying SS on about half of your earnings.
I don’t have enough quarters to qualify. So unless I get a regular job after I retire, I won’t be getting anything.
[QUOTE=Stringbean;18102536**]
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.
[/QUOTE]
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.
Over time the benefits have not kept up with the cost of living. I retired last year my SS check is around 44% of my take home pay check. And I have to pay income tax on my benefits on top of it. So maybe only about 38% of my former take home.
Today anyone planning on living on SS only better figure on a major step down in their living standard. 30 years from now benefits will be more but the cost of living will be much more. Example My SS benefit went up by 1.7%. In September last year my wages went up by 2.2%.
If you are not planning on your retirement now you may not be able to retire. There are a lot of seniors out there that are still working.
[QUOTE=Stringbean;18102536**]
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.
[/QUOTE]
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.
Over time the benefits have not kept up with the cost of living. I retired last year my SS check is around 44% of my take home pay check. And I have to pay income tax on my benefits on top of it. So maybe only about 38% of my former take home.
Today anyone planning on living on SS only better figure on a major step down in their living standard. 30 years from now benefits will be more but the cost of living will be much more. Example My SS benefit went up by 1.7%. In September last year my wages went up by 2.2%.
If you are not planning on your retirement now you may not be able to retire. There are a lot of seniors out there that are still working.
So I would say plan on it being there. But don’t plan on it being but just a small part of your retirement.
I wouldn’t count on it. Even though I’m forced to contribute to government pension plan I believe it will be depleted by poor economics, poor investments and baby boomers by the time I have a chance to get anything out of it. I was already given a letter 20 years ago that I would only receive only around $250.00 per month from the government pension plan if I didn’t contribute more into RRSP’s and such. Which is bullshit, just a scare tactic to coerce people into putting more of their money into losing investment plans; Why?? Well, Why should you have all the fun spending your money and have nothing left over when you can give it to us and WE can spend it for you and you have nothing left over… Makes more sense if you just give it to us to spend fruitlessly than you doing it yourself.
The economic rules already account for ‘spenders’ and ‘savers’ so the point is moot.
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.