"With fewer and fewer companies or organizations offering pensions these days, and with the uncertainty of 401k and IRA funds, Social Security will become more and more of a lifeline for many. And if the fund goes dry, and people get reduced or zero dollars each month from Social Security? That picture would be so grim, I don't even want to paint it."
I have been reading more and more disturbing things about Social Security as of late. If you plan to live to be 65 to 70 years old (or longer), or have a relative who is on Social Security, you might find this article interesting. Social Security, the program which has been around since 1935, was originally set up as a safety net for those who hit 65 and had little else to live on. Since life expectancy in 1935 was 62 years old, this fund was going to be close to perpetual. Then two things happened. People started living longer, and people started having fewer kids.
Flash forward to today. Here is the grim reality of Social Security. Instead of just being a safety net for the few, it is now the only source of income for 40% of all retired folks in America. Today, you can start drawing Social Security (reduced amount) at 62 years old. With life expectancy at 73.3 years old, that means 40% of all people between the ages of 62 and 73.3 will be looking for their Social Security checks, just to survive.
Social Security has been discussed for decades now in Washington. How can this fund remain solvent if 1) the ratio of people kicking into to fund as compared to those taking out of the fund is so much different than it was in 1935, and 2) over the years we have all kinds of other things which are leaching out of the Social Security fund.
Besides giving the fund a total overhaul (which is very unpopular to many), what else can we do to help our seniors? One of the Democratic Congresswomen from Minnesota has an idea. Since for years, the federal government did not tax Social Security, let's have at it again. Take all federal taxes off of Social Security. That would help. Plus, some states still tax Social Security. No more state taxes on Social Security would also help.
Or - we can do nothing. This once viable program will become unviable in 2033. That is nine years from now. How is this being handled in Washington? The same way fixing our national electric grid has been handled. Instead of fixing our grid 40 years ago when we knew an EMP strike of any kind would be disastrous, we will wait to fix it until after the EMP strike happens. The same with Social Security. We will wait until 2033, and then ring the alarm bell.
With fewer and fewer companies or organizations offering pensions these days, and with the uncertainty of 401k and IRA funds, Social Security will become more and more of a lifeline for many. And if the fund goes dry, and people get reduced or zero dollars each month from Social Security? That picture would be so grim, I don't even want to paint it.
Oh, dear, another defeatist post. You have correctly identified the problem, but have no inkling of the solution, which has been available for 25 years or more, proposed by none other than Sen. Rod Grams of Minnesota. I was curious as to whether the math still works, and it does! The idea is to phase out SS over the next 30 years, in favor of private (mandatory if you want) accounts. The results are: the Trust Fund NEVER goes broke, everybody gets everything promised them, no cuts, younger workers retire with MORE benefits, than can be expected, the National debt gets REDUCED and even eliminated, and the retirement age ceases to mean much. And a few secondary benefits.
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