Plan B Forum

Cash in early before the teat runs dry.

When will the social security system go bankrupt?

For the first time since 1983, Social Security will pay out more than it takes in this year (2010). Decreased tax revenue caused by the recession is to blame. This situation should be temporary assuming that unemployment trends downward. A new tax on health care benefits will also help. The Congressional Budget Office currently estimates a date of 2037 for the end of solvency.

The huge demographic bubble of baby boomer retirees will take a toll on Social Security. There are 3.2 workers for each recipient today. According to the Social Security Administration, that number will drop to 2.1 by 2034.

The fund for Social Security has a surplus which will take care of negative balances (including this year), but the money will begin to completely dry up when the program's solvency ends.

There may be a tiny number of politicians that are truly calling for "privatizing social security" but the vast majority of the proposals, (designed to address exactly the problem you point out, Dale) have involved allowing younger folks to take a portion of their FICA contribution and direct it into carefully structured private investments... (I know that was the thrust of Bush's proposal a few years ago.)

NOT (as many who are demagoging this issue would have people believe) "eliminating" social security, or "forcing" anyone to take that option, (though decades of return on investment would indicate they would be better off) or affecting those receiving it, or soon to receive it in any way.

Either raising the age when one is entitled or increasing contributions or a combination of the two will avoid this ticking time bomb.

The real suffering will be borne on the backs of those under 40.

2037 is coming quick.

dales wrote:Either raising the age when one is entitled or increasing contributions or a combination of the two will avoid this ticking time bomb.

My guess is that it will be a combination of a higher qualifying age and a lower benefit.

Rather than reduce benefits, it would make more sense to raise the maximum SS income/contribution level. (Or at least throw raising the cap into the mix.) I'd suggest eliminating the cap entirely but as rubato pointed out in another thread...

rubato wrote:If SS is a 'good deal' only for the bottom 90% in income and a net loss to the top 5%* that would provide a self-interested motive for Republicans desire to destroy it.

yrs,
rubato

*and something close to a wash for those in-between.

...that would make it more likely that the Republicans would seek to destroy Social Security entirelely. As it is, it seems that the Republicans are (yet again) trying to convince the country that what's best for the top 5% is best for the other 95% of us.

The quote at the top of this thread is completely bogus. It assumes that Al Gore was telling the truth about putting the excess collections in a "lockbox." Those who have been paying attention have noticed that the excess has been spent immediately (many times over, if you want to know the truth), and all that remains in the lockbox is a mile-high stack of IOU's from the same institution that spent the money. How ironic it is that the very same politicians who spent the money now tell us that those who want to modify the System are threatening the sanctity of Social Security!

Liars.

The Social Security "Trust Fund" is already bankrupt.

It is inevitable that the FICA tax will extend to all ordinary income with no cap. Retirement ages will continue to ramp up very gradually. No politician fears 25-year-olds getting pissed off about the injustice of it all (like they do in France. Maybe).

The wildcard in our future is inflation or deflation. Nobody knows which is coming, but both will result in huge problems for the viability of Social Security as we know it.

I will be eligible to start collecting SS in less than a year. Don't nobody f_ck with MY MONEY!

I am grateful to be in a profession that I enjoy, and in which I can continue to work until I lose my mental faculties - I have no expectation of retiring at 62 or 65 or 67, at least not to subsist on SS benefits.

I am glad I have a 401(k), can put money into it, and can start getting money FROM it 3+ years before collecting Social Security...then again I do not expect a cent from Social Security's Ponzi scheme.