Social Security defecits predicted to run deficits 2010-2011

[Anonymous]

According to the CBO report to congress this summer. I am not sure we can keep our head in sand about this much longer. We have spent all earlier surpluses as general fund revenue, now it is time to pay the piper. People have been warning about this all my adult life. Do we dial back benefits? Raise the wage base? Raise the tax rate? All of the above?

[Anonymous]

Yes, and this is not new. Unless our economy performs way better than predicted, we eventually run out of money.

Personally, I think Social Security should be means tested. It really should be like retirement insurance. Plenty of people have enough that their social security checks are unimportant to them.

[Anonymous]

We should stop raiding it to pay for other programs.

[Anonymous]

Anonymous wrote:Yes, and this is not new. Unless our economy performs way better than predicted, we eventually run out of money.

Personally, I think Social Security should be means tested. It really should be like retirement insurance. Plenty of people have enough that their social security checks are unimportant to them.

Wouldn't this possibly encourage people not to save for retirement - if they save they lose benefits? It comes down to fairness again - why should the frugal be penalized when they paid into the system all those years on the promise of a benefit. Not a handout, a benefit they contributed to be entitled to.

I DO think over time the amount of SS payments needs to be looked out - while people have plenty of time to factor this into their personal saving plans. And I do think we need to stop taking SS taxes and spending it on other general government benefits. The Lock Box is good in concept but never works in actuality.

[Anonymous]

On the other hand. If you pay taxes for 40 years, then a measly little ss check for your retirement is hardly charity.

A civilization is measured by how it treats the elderly, sick, the disabled and children.

And the elderly are the ones who made it all possible for the younger to live in the society they do

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes, and this is not new. Unless our economy performs way better than predicted, we eventually run out of money.

Personally, I think Social Security should be means tested. It really should be like retirement insurance. Plenty of people have enough that their social security checks are unimportant to them.

Wouldn't this possibly encourage people not to save for retirement - if they save they lose benefits? It comes down to fairness again - why should the frugal be penalized when they paid into the system all those years on the promise of a benefit. Not a handout, a benefit they contributed to be entitled to.

I DO think over time the amount of SS payments needs to be looked out - while people have plenty of time to factor this into their personal saving plans. And I do think we need to stop taking SS taxes and spending it on other general government benefits. The Lock Box is good in concept but never works in actuality.

Not much, because you put it on a sliding scale so people are always economically better off saving than not saving. But the people I'm talking about means testing aren't living off social security anyway. They have far more wealth.

As for fairness, social security is not fair today. On average, people are paid out more than they pay in because they live so much longer into retirement than their contributions will support. Today's worker contributions are already being used to pay current retirees. It's not a savings plan. It's more like an insurance policy, although not a very well funded one. We buy insurance all the time. This should be like insurance against poverty in our retirement years.

[Anonymous]

Up the retirement age. The main problem with SS is that it was designed to support a FEW people that lived past normal life expectancy at the time it was created. It can't sustainably support retirees for decades on end w/ people retiring at 65 and living for many many more years typically.

[Anonymous]

Anonymous wrote:Yes, and this is not new. Unless our economy performs way better than predicted, we eventually run out of money.

Personally, I think Social Security should be means tested. It really should be like retirement insurance. Plenty of people have enough that their social security checks are unimportant to them.

While ethically I'm good with means-testing, practically it's not a good idea. There isn't much mainstream support for programs that serve the poor but programs that serve everyone, rich or poor, those get a lot of support.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes, and this is not new. Unless our economy performs way better than predicted, we eventually run out of money.

Personally, I think Social Security should be means tested. It really should be like retirement insurance. Plenty of people have enough that their social security checks are unimportant to them.

While ethically I'm good with means-testing, practically it's not a good idea. There isn't much mainstream support for programs that serve the poor but programs that serve everyone, rich or poor, those get a lot of support.

Yes, that's true. But the reality is that either we collect more to balance social security, pay less to each person, or we pay out only to those who need it. None of the choices is politically appealing. And the public may be unwilling to choose one of the three choices, but some choice will be made regardless. It is a mathematical certainty.

The case to be made for the average person supporting means testing is that you, the individual, don't know in your twenties and thirties whether you will have enough money to pay for your retirement. So which is better for the individual: A guarantee that you will have a decent retirement income, which may or may not come from the government; OR a guarantee that half of a decent income will come from the government, with no guarantee that you will have saved the other half on your own?

Once you are a high earning lawyer or a doctor who has paid off medical school, you clearly would want the 2nd choice because you know you will get more money. But if you are a thirty-something with two kids who has a basic degree and a sales job that does not currently allow you to save, you have to hope for a big career bump and no major financial crises in order to take that option.

[Anonymous]

22:15 It is charity when people get back thousands more than they put it and don't need it! That's estate preservation through and through.

[Anonymous]

Anonymous wrote:Up the retirement age. The main problem with SS is that it was designed to support a FEW people that lived past normal life expectancy at the time it was created. It can't sustainably support retirees for decades on end w/ people retiring at 65 and living for many many more years typically.

I couldn't agree with this more.

[Anonymous]

I generally agree with 14:52, with one quibble - SS shouldn't provide a "decent retirement income." It should provide basic nutrition, and a roof over your head. It isn't (or shouldn't be) designed to allow a senior to keep the family home, or maintain the style to which he or she has become accustomed. I believe the original purpose was to provide a hedge against seniors (1) being forced to work until they drop, or (2) be forced out on the street when they were no longer able to work. But somehow it's evolved to "retirement income." I think it's only when we refocus on its true purpose - a social insurance compact, something we do because to NOT do it would be unconscionable - that we'll make some progress. If nothing else, it will address the attitude of "I contributed to it, so I am entitled to benefits." It's not your 401k, it's a safety net. Think of it like catastrophic health insurance - something you purchase, but desperately hope to never have to use.

In my view, raising the retirement age, means testing, and increasing the FICA tax (perhaps removing he limit), or in a perfect world some combination of the three, are all acceptable means of "fixing" SS, but only if accompanied by a fundamental change in how we view the program. In other words, I have ZERO problem paying a tax to ensure that seniors won't be impoverished, but I have a very big problem paying a tax that when the recipients don't need the money to live, but use it to take vacation(s) every year, or keep the 4 BR house in which they raised their children.

[Anonymous]

SS shouldn't provide a "decent retirement income." It should provide basic nutrition, and a roof over your head. It isn't (or shouldn't be) designed to allow a senior to keep the family home, or maintain the style to which he or she has become accustomed. I believe the original purpose was to provide a hedge against seniors (1) being forced to work until they drop, or (2) be forced out on the street when they were no longer able to work. But somehow it's evolved to "retirement income."

I agree with this. SS isn't meant to totally support all retirees. Those banking on it should view it as a basic life maintenance payment, not money to travel to FL or golf.

[Anonymous]

Is a person who pays taxes for that many decades worth so little to you?
Is it a crime to not die 3 years after retiring?

[Anonymous]

Is a person who pays taxes for that many decades worth so little to you?
Is it a crime to not die 3 years after retiring?

a) it's an insurance program against dying destitute - not a long term savings program for each individual

b) it's not an issue of caring about people, it's an issue of what's economically feasible and what SS was originally put in place to do (i.e. it was NOT created to fund decades long retirements for the total population)

c) people do need to reconcile to the idea of working longer. It makes no sense for healthy people to be retired for years upon years and expecting others to fund that retirement while they could still be working.