SS is a modest income and its purpose was to provide a supplemental payment not a front line payment upon retirement. Most people can’t or won’t save for their retirement and so Uncle Sam had to come to the rescue in the early 1930s.

Unfortunately, SS is not cost justified compared to private investing and therefore those that can make informed and consistent contributions to a retirement plan complain. Others who don’t take care of themselves financially have SS as the “primary” retirement benefit. SS also provides no beneficiary payment unless there is a surviving spouse with no SS or lower benefit. Most private insurance contracts provide for benefiicary payments at lower premiums than SS.

SS has also fueled the fires by expanding benefits into areas that are over their heads, such as health care and beneifts to non resident aliens. These “costs” are shouldered again by citizens who take care of themselves financially.

The solutions are many but no one makes a decision. We must make the system contributory for all citizens including government workers; eliminate benefits that are not needed as univerisal to all; reduce expenses by better management; index the age eligibility based upon actuary studies and eliminate counterproductive legislation such as taxing benefits and limiting earnings while receiving SS.

In sumary an all inclusive system based upon current actuary studies and streamlining benefits to income only at retirement and insurable disability standards make SS a more acceptable social standard.

To NC Are you sure McCain is the lesser of 2 evils, the biggest difference between the 2 parties is not who will raise taxes or spend more money - both parties spend like there is no tomorrow - one borrows and increased the debt so they don’t have to raise taxes and the other puts the rest of us in debt while they raise our taxes. BTW the Rep decrease the tax rates but change different credits and deductions to create hidden taxes than the Dems raise income taxes. The Reps know if you don’t see it come out of your paycheck your don’t notice it or at least the average taxpayer doesn’t.

Help is what Social Security is, just some help for those old enough to have been in the “great Depression”, they had nothing to fall back on. This help came from everyone chipping in a little each week, to keep folks from feeling “broke”. It worked so well that it just continued and continued with add-ons from the Goverment, until someone added up the numbers of collectors compared to the future workers and saw that it didn’t add-up. Well I not real old but all I every heard about from my Grand Parents and Parents all who lived during the Depression, was “save your money, hard times will come again”, they where right, October of 07 hard times arrived and will be with us for a while. I am not rich but I listened to my elders and brother I am glad I did. Start Saving your money from age 15 until you are 65 and you will have something, the longer you wait the more excuses you will have to why you can’t save. It’s hard to save money it requires giving up some of those things that the other folks have, but in the end you will have peace of mind, not just a pile of “stuff”, that you had to have.

I lived in Singapore for 25 yrs and have found that the sytem (MPF) S’pore has works. Although they do not have welfare which is a looser here in the USA. Thre are no illegals in S’pore like there is here which takes a lot of the federal funds. Our country will never recover due to the political arena.

Over time, replace SS with a Mandatory Provident Fund (MPF) as in Singapore and Hong Kong, wherein saving for retirement and company matching contributions totaling around 12% of wage earnings are compulsory, the accounts established thereby are owned by the employee, investments are restricted to investment-grade bonds, blue chip stocks and bank savings accounts, and withdrawals are restricted to an agreed retirement age or death.

The posting by Anonymous 05/14/2008, 08:30 am is right. People need to be empowered to make decisions for themselves and have a choice of where to invest. Make it simple - maybe three investment choices, including a government security for the most conservative - and couple it with some basic education and resources. Forcing everyone across the economic and age spectrum to rely upon the paltry returns established by the government is ludicrous, period. What retirement advisor would tell a 25-year old investor with a 40-year investment horizon to invest in T-bills? Let’s get real.

On Social Security, we have to start from square one. This means all Moneys collected for Social Security stay in one account. This means we have to start with the Lock Box and have factual figures to start with. Secondly, we have to redefine Social Security functions. Do we give monies to Illegal Aliens? What individuals in our society should receive monies besides workers that have paid into the system. I have a hard time thinking the present system is perfect and accepting the fact that all we have to do is pour more money into the system

Eat the rich

I agree with Scott he has the right attitude, except who are you going to elect , the democrat lead congress wants to give us the largest tax increase in the history of our nation and HC & BSA want to spend twice as much as we do today. They will need to raise taxes a lot more than they propose, the leader of the highways want to triple our gas tax which both Dem. canidates endorse. I agree wake up america and start being responsable in who you vote for. We complain about our leader takilng more and more of our hard earned money and then we turn around and vote for a canidate that promises they are going to take a lot more. Yes wake up America and do what , McCain is probably the least of the two evils we have to choose from.

I agree with anonymous if we took the money we now send to congress and make it mandatory to send these moneys to a brokerof our choice, And then abolish the dividend cap gain tax , we could all retire a lot earlier, with a lot more income.

abolish social security , take all not part of ss and let ind. invest in market a bond would produce more than we get today from our money if you take ss away from congress they can not spend it. the spending of billions of dollars from ss is the reason we are where we are today.

Social Security should be preservd in something like its present form so it can continue to serve as a foundation of income support for most workers and/or their families when their earnings cease due to death, disability and retirement. As other commentors have noted, there are various ways of tweaking the system to put it in on a stable financial footing for the foreseeable future, while protecting the interests of those most dependent upon it–and I would hope that our next President will take a leadership role in seeking bi-partisan agreement on how best to accomplish this. In additon, we must undetake measures to require less deficit spending by the federal government and to encourage greater savings by workers and their families in order to improve our future economic secuirty.

I agree that a developed country should care for its elders and should provide good health care to all. Otherwise there is little difference between the 1st and 3rd worlds. If this means higher taxes earmarked for those things, fine. Nonetheless, the taxes in the US are prohibitively high, absurd really. I live abroad and am just burned everytime I earn cash in the US, whether to my businesses or myself. It is appalling. Without proactive businesses, there will be no economy and taxes on anything that exceed 20% are a deal killer. Many will take their business elsewhere.

I see everyone saying we should raise the retirement age. Maybe you should check out the current retirement age. My husand and I are in our 40’s and the full retirement age is 70+ for both of us. We also need to address the gender discrimination in the system. If a woman never works she can collect from her husband’s benefits, if a man (many do now) chooses to stay home and say take care of the family - he cannot collect his wife’s benefits….

Dennis (Virginia) very well said. You are one of the few that has the information correct. Mr. Sattinger, I am sorry to say, you have has misinformation from a good number of people. Social security is a legacy program and needs to have considerable changes made.
Some of the changes are:1. It should be means tested. This country needs to take care of its elderly, however not at the expense of the younger generation. When people have 2 houses, millions of dollars in assets, the $1,080 a month they receive is putting that burden on their children and grandchildren to pay those benefits. 2. The retirement age needs to be lifted. As mentioned earlier from Dennis, the average American is living substantially longer than back in the 30’s when this program started. This nation can not afford the current program. 3. Stop telling the American public that there is a trust fund with money in it. There is no trust fund! The money from social security taxes come into the governments general fund and is spent. The government spends far more than it takes in and issues debt to cover the rest. That debt of course is in the form of Treasuries, but it is not in a “trust fund” for social security.
There is more to say, but it doesn’t seem like anybody has the courage in politics to really fix the issue. Too many 60+ years old vote. Just wait however. The echo boom, has almost as many people as the baby boom generation, and when they vote and get into politics, they will have the power to change. It is sad though, that this problem will not be fixed before it hits a crisis.

Ditto to what Kim said. It was like a cool drink of water after crossing the desert. Thank you Kim. It’s about time someone spoke the truth. I felt like I was the only one. Thanks again.

We have an obligation as a part of humanity to take care of our elders. The younger workers now will have to bare that burden. It is fact around the globe. Goverments, companies and people will have to continue to find creative solutions. I t will not be easy, that is for sure.

Get real and address the root of the problem. !. Make our government put all the (IOU) money back into Social Security. 2. Stop all the wasteful spending on pet projects, aid to other country’s, billions of write offs to oils companies and all the other companies. 3. Take all the wasteful spending and unfair tax write offs and aid dollars and put it back into Social Security. 3. Make Bush/Cheney accountable for the lies and criminal acts and put them in jail now, then reelect accountable people that will look out for the best interest of our country and it’s people. Anything short of that will never fix the problems in our country created by corruption at the highest levels. Raising any taxes without addressing the root of the problem will not fix anything long term. Raising the retirement age or Increase Social Security taxes is a narrow minded way to setup a poll it does not address the root of the problem or give any other options. I will not even poll on those BS polling options. It just go’s to show how narrow minded and out of touch with the truth of what is going on at the highest levels of our government (which is big time corruption) to even suggest that polling on only those two methods is the real long term answer. Who ever came up with that method of polling without any other polling options is blind to the real root of the problems. It is a (fact) that when our government wants to send aid to other countries they always find millions and even billions to just give away, just like they do on pet projects and rebuilding countries like Iraq, but when it comes to the very people who pay the taxes they want to take more away and spend the Social Security funds and replace it with (I owe you’s) and then say we are going to run out of money. How unpatriotic can one’s government be and the polling method for fixing the problems are a joke! Get real screwing the American people more is not the answer and giving them more money to borrow against with (I owe you’s) is just crazy. Wake up American people.

The idea of investing in a higher yield instrument may have made sense at one time. But now the ‘fund,’ a strange euphemism for something that it is not, is to be liquidated. Social Security soon will no longer be in a positive cash-flow position, so speaking of investment soon will make no sense at all. This is a transfer program and it has no fund just, a record-keeping of how much money was taken in and spent on other things. There is some attempt to pretend that funds are being reinvested in US treasury debt, but that is an accounting exercise. They call that a fund. It’s a cruel joke. You can’t make a fund by investing your right pocket in your left pocket’s IOUs -not even if you are in the US treasury.

I think the reader poll accompanying this article is too limited. Options such as cutting benefits for the rich, investing for higher yields, and reducing taxes are not included.

I would raise the retirement age for full retirement to 70, but I would also eliminate income taxes on retirement benefits since we have already contributed to the cost through payroll deduction!!

When Social Security was created, the average lifespan in the US was 65. Now it is 77. We need to raise the age at which Social Security is available to the average lifespan in the US over some period of time.

People can still retire at age 65 if they can afford it. But they won’t get Social Security as early as they do today. We should save our money during our working years to pay for our retirement and not expect Social Security to be the only source of income. It was designed to a safety net, not our retirement income.

First, there is no problem with social security. It is a convenient political football for the Republicans. To deal with the projected shortfall, remove the income cap on social security taxes.

Some people have argued for “privatising” Social Security. I am a retire academic, and for many years I was able to voluntarily put an additional amount of funds into tax-deferred accounts. This was the 403b program, and later a second one (I have forgotten the number) There was a maximum percentage one was allowed to put in; but they were both substantial, and I made the maximum contributions. I managed the funds myself on a Fidelity account.

These programs should be extended to everyone. Combined with the Social Security program, they can provide a very secure retirement.

There is no problem with Social Security. Only with the Federal Government that has badly mismanaged the fiscal affairs of the country.

To address the problem we need to first avoid making it an ideological football. So how about a task force with the following differences from previous task forces (like Hillary’s health care task force, Cheney’s energy task force or Bush’s Social Security task force):

1. Televise live all meetings of the task force. If things are done out in the open people are more likely to accept the result when it’s finished,

2. Have the next administration select no more than 40% of the membership of the task force. To ensure ideological balance, let the remainder be selected in roughly equal proportions by all living ex-Presidents (or alternatively according to term in office in which case Carter, Bush I, Clinton and Bush II would name members in a 1:1:2:2 ratio), which when combined with Obama/McCain would be in a 1:1:2:2:4 ratio.

Retirement from Gvt is the start of real life where no one will reason for but you do it, as conscience audits the memory intelligence has it that the old experience one has,the more risks he/her undertakes in investing ,gain or lose he/her will never blame someone else but himself.

SS was not ever a savings plan it was meant to Supplement Income,being that Americans on whole have holes in their pockets ;”buy the best,biggest,most expensive toys: 12mpg** .Why can we as a society SAVE,I learned to put 26-30% to savings of some kind ,if you want something bad enough “LEARN” to save for it .By then you most likely wont’ need it !
Savings Bonds,when was the last time we really looked at them?Changed the rules on interest on them too. Social Security STOP counting the SS monies as a chunk of change to say the Geoverment is not broke ,because it is counted as part of Uncle Sam’s “piggy” bank Free Market Savings HA-HA won’t work ,who is going to learn to save when no one teaches the importance of savings? are your children teaching your grand kids ……………………………

Get real and address the root of the problem. !. Make our government put all the (IOU) money back into Social Security. 2. Stop all the wasteful spending on pet projects, aid to other country’s, billions of write offs to oils companies and all the other companies. 3. Take all the wasteful spending and unfair tax write offs and aid dollars and put it back into Social security. 3. Make Bush/Cheney accountable for the lies and criminal acts and put them in jail now, then reelect accountable people that will look out for the best interest of our country and it’s people. Anything short of that will never fix the problems in our country created by corruption at the highest levels. Raising any taxes without addressing the root of the problem will not fix anything long term. Raising the retirement age or Increase Social Security taxes is a narrow minded way to setup a poll it does not address the root of the problem or give any other options. I will not even poll on those BS polling options. It just go’s to show how narrow minded and out of touch with the truth of what is going on at the highest levels of our government (which is big time corruption) to even suggest that polling on only those two methods is the real long term answer. Who ever came up with that method of polling without any other polling options is blind to the real root of the problems.

I believe that we need to increase the minimum age to 72. Also, the person would only get an amount of money based on their own contributions with maybe a match percentage similar to a private 401k does.

Get real and address the root of the problem. !. Make our government put all the (IOU) money back into Social Security. 2. Stop all the wasteful spending on pet projects, aid to other country’s, billions of write offs to oils companies and all the other companies. 3. Take all the wasteful spending and unfair tax write offs and aid dollars and put it back into Social security. 3. Make Bush/Cheney accountable for the lies and criminal acts and put them in jail now, then reelect accountable people that will look out for the best interest of our country and it’s people. Anything short of that will never fix the problems in our country created by corruption at the highest levels. Raising any taxes without addressing the root of the problem will not fix anything long term.

Unfortunately if you left it (savings) to the people then only 50% would actually do that. Who can really live on social security alone, yet fact is only 50% contribute to their 401K plans. HUMMMMMM!

Increase the retirement age to 72 and get real about life expectancy. Continue to allow illegal immigrants to pay into the system but cannot draw any out. Remove the cap so you pay on all your income, its the least the rich can do. Of course that assumes they even pay taxes.

Social Security is insurance — insurance against all the risks that life sends our way. All Americans have a stake in keeping the system in place and supporting the relatively modest steps necessary to ensure that it will be there for us and for our children.

Social Security is a Ponzi Scheme. If this product were offered by a private company it is likely the people running the company would be in jail. The system should be privatized as soon as possible with each person controlling his own account.

End the fraud. Stop stealing from the young to give to the old. Send everyone a check for what they put in, plus interest, and shut it down.

Abolish it. Let individuals via the free market take care of themselves.

The current system is a disgrace. Retirees would get better benefits if they were allowed to buy US savings bonds. The SS system is a money transfer operation. It does not protect retirees.

Social Security is necessary for securing baseline income in retirement. But it is not sufficient. It is unfortunate that so much time has been wasted talking about turning Social Security into a private savings plan. The real question is how can we make retirement more financially secure for more Americans. The answer is not to destroy Social Security, but to build on it with a sensible and sound pension system, individual savings, and annuities that will ensure adequate retirement income for all Americans.

1) Truth in budgeting: Stop counting social security receipts when calculating the federal deficit unless you do

2) Funding reform: Consolidate the income and social security tax. Remove the employer paid portion to make hiring U.S. based worker more competitive. Raise the overall income rates and remove deductions to eliminate deficits. The end result will be that the higher incomes will be taxed more. Sorry, but raising taxes some now is preferable to pushing the problems onto future retirees and taxpayers.

Whatever is proposed don’t follow the Bush approach of excluding current retirees from any benefit cuts. If the system had been fair until now, there would not be an accumulated actuarial deficit.

As my book, The Pension Mountain emphasizes, let’s look to the European experience. Every reform measure proposed by Congress, the White House, or AARP has long since been applied in Europe. Here, a tweeking of the retirement age, perhaps investment policy changes, and further incentives to private savings would help. As the European experience illustrates, social security has always been secure if there is a national will to keep it that way.

Why should the benefit be reduced. If there was no ceiling, my empolyer and I would be paying 21,000 in SS taxes, and I am paying income tax on 85% of 25,000. If the ” retiree” is still working 14%+ is going back into the sytem.
Eliminate the tax on SS, and just raise the age to a more realistic age based on today’s life span not that of 1932.

Alternative thinking: Eliminate benefits paid to non-working, non-spousal dependents over the age of 18; Make it clear that social security is designed to SUPPLEMENT retirement income from other sources, not replace it! Eliminate the rediculous taxing of social security benefits… if income is over a certain dollar limit per each year’s tax return, then reduce the benefit by a tax equilvalent… perform the accounting to repay “borrowed” social security withholdings without using the tax system to legitimize transfers… eliminate all other non-retiree, non-spousal, non-disability payments and place those that must survive into separate, visible, and publically accountable programs (read “Sarbanes-Oxley” laws!)… reform and streamline the administration of social security… consider privatization of the Social Security Program administration ONLY… consider an “annual report” on Social Security that accompanies the annual benefits statement

Remove the ceiling, raise the full retirement age to 70 and that will postpone the problem. Meanwhile people need to take responsibility and fund their IRA’s and 401K’s. Stop waiting for the government to take care of you.
It is a free country, and you are free to be poor in your old age or not.

SOCIAL SECURITY RUNS ON A BUSINESS MODEL THAT IS A ILLEGAL BECAUSE IT IS GUARANTEED TO GO BROKE, IT’S A DAMN PYRAMID SCHEME.

WE NEED TO GET THE HELL OUT OF THIS SYSTEM, PRIVATIZE, COPY CHILE’S FORMULA, IT WORKS FOR THEM.

Arlene, the ‘wage base limit’ for 2008 is $102K… making it a ‘regressive’ tax hitting low and middle income people only.

The solution is simple folks. Eliminate the income level cutoff for contributions for highly compensated employees; retain a cutoff for employers. For instance, Bill Gates would pay 7.65% on ALL of his income.

“Social Security is an excellent tool to meet the economic risks working families face. Given its proven track record, wise policy will balance Social Security finances without cutting benefits and then seek to restore the adequacy of benefits.”

THE AUTHOR IS CLUELESS!!!!! YOU DON’T FIX A BAD OMELET BY ADDING MORE INGREDIENTS. YOU TOSS IT OUT AND START OVER!!!
THE IGNORANCE OF THE POLITICIANS (OR THEIR COMPLICITY IN THE SCAM) IS ASTOUNDING!!!

PRIVATIZE, PRIVATIZE, PRIVATIZE.

REQUIRE NO LESS THAN 50% GO INTO A US/CORP BOND FUND WITH THE REMAINING 50% OPTIONAL INTO AN S&P OR WORLD EQUITY INDEX.
LET 20 SOMETHINGS DO THAT WITH THE ENTIRE 14% AND RATCHET THAT DOWN FOR THOSE IN THEIR 30′S, 40′S, 50′S.

ANYONE WHO OBJECTS TO THAT JUST DOESN’T UNDERSTAND MARKET PERFORMANCE AND THE PATHETIC RETURN THE CURRENT SYSTEM OFFERS.
IF THE ABOVE PLAN WERE IN PLACE OVER THE PAST 50 YEARS, MONTHLY BENEFITS WOULD BE NO LESS THAT THREE TIMES WHAT THEY ARE NOW.

Can anyone tell me how much the cap is at the present time??

If the govenment used the social security taxes only for retirement, there would be enough money for all to retire. The problem is that congress put these funds into the general fund from which the money can be borrowed for other uses and paid back at a low interest rate. Segment the money and use the gains on the money to fund the retirement.

Raise the Payroll Cap as Barrack Obama Suggested. It is outrageous that only the middle income are contributing. After the Payroll Cap their income goes scott free. What is it $35,000 or maybe it has gone up since I last worked with Payroll taxes.

I agree with Mike. The government should never touch this money. It should be put into an individuals account, such as a savings account and draw interest over the years. As a widow, I am drawing SS from my husband, and I am finding that the SS Adm is a mess. I have got three letters the last month stating they are cutting my benefits this month or that I will not get benefits the next month because they paid me too much, etc. I feel I do not know where I stand. Some will not get their benefits until almost 70. God says age expectancy is three score and ten years (70) Some live longer, but a lot do not make it. The government is banking on us not making it at this high age. Even if you do, you pay in for 50 years and draw maybe for 10. I was told to contact my senator or congressman if I had complaints. I know how much good that will do.

Social Security Funds are not invested they are spent. That is why we have a problem. If our government did not touch the money and it was invested and allowed to grow, then we would not have this problem. Social Security is not a good return on your investment and all your article really is promoting is a redistribution of wealth. Which is more commonly known as Socialism. That is not what our country is all about. In your world. People who work hard and get ahead and god forbid make money should then hand it over to those who choose to live off the handouts of the government. Not a good deal for most hard working Americans.

For most Americans, Social Security will replace 20% to 35% of one’s pre-retirement income. We actually need close to 80% to maintain our standard of living in retirement.

Congress needs to ensure that worker and employer contrivutions to SS will be kept and invested to pay future benefits. Too often Congress has raided SS to pay for current (now past) needs. That’s not prudent.

President Roosevelt said in 1933, when Social Security came into being, that it would not be enough but it was better than nothing.

To Steve and everyone else who doesn’t believe the Social Security trust fund is really there. The excess FICA taxes that the Social Security Administration has been collecting have been invested in U.S. Treasury obligations which are backed by the full faith and credit of the U.S. government. These debts, along with all the other Treasury securities purchased by investors, are accounted for in the U.S. budget. The U.S. is obligated to pay interest on the bonds and to redeem them when due (beginning around 2027 in the case of Social Security). The country has never defaulted on any of its debts. I dare say, if it were to default on the money borrowed from the Social Security trust fund, we’d be in a lot more trouble than we can imagine. To say that the U.S. has “spent” the trust fund is like saying you “spent” the money the bank loaned you for your house or car. Yes, you spent it, but you are obligated to pay it back. The United States government is one of the most credit-worthy entities in the world, which is why so many foreign governments and investors buy our securities. The amount of debt the U.S. is carrying is another story and is definitely cause for alarm. But everyone who holds U.S. Treasury securities, including the Social Security trust fund, will be repaid

Virginia Reno has it right. Far from being a problem for the future of this country, Social Security provides a strong foundation for addressing the challenges many Americans, especially women, face in achieving a secure retirement in an insecure economy. Instead of looking for ways to cut already modest benefits, we should be exploring ways to improve benefits for vulnerable beneficiaries. One in five single women age 65 and older is poor; well-designed improvements in the minimum benefit for workers with low lifetime earnings and benefits for widows and widowers could significantly reduce poverty.

I BELIEVE WE SHOULD HIGHER THE RETIREMENT AGE,INCREASE THE SOCIAL SECURITY TAXES(both rates and ceiling) AND ELIMINATE PENALTIES OWING TO AGE AND INCOME;

We all agree that more money is going into Social Security (SS) right now than is being paid out. Now when SS was passed, it said that any excess that is paid into SS must be invested in government instruments (bonds). So think about this. SS takes this excess money to the Treasury Dept. and the Treasury Dept. gives them bonds. SS has their bonds and the Treasury has the $. So now the question is, what does Treasury do with this money? Do they invest it in stocks, land or something tangible so that they can pay back SS when they come calling for their $? No, they spend it. So 8-9 years from now, when SS does not take enough $ in to pay out the beneficiaries, SS will take their bonds across the street to Treasury and ask for their money + interest. FROM WHERE will Treasury get this money? They don’t have it. It has already been spent. That’s the way it always has been. You can say that the SS has bonds…but the bonds are worthless. Ergo, taxes will need to be raised dramatically to pay out future benefits or benefits will need to be cut or something. The sad thing is, our leaders know it and aren’t doing anything about it (yet). In fact, Rep. Jim Cooper (D-TN) wrote a book that talks about this (and other things) called Financial Report of the United States (ISBN #1-5955-5080-1). It’s not so much a book as it is simply the budget of the U.S. Pretty amazing.

As an editor who has long studied and written about this issue, I strongly agree with Virginia Reno. But that the solutions go far beyond Social security’s manufactured “crisis,” which too many conservatives get away with conflating with the more serious Medicare shortfall. There’s an underlying issue for anyone who cares more about humanity and the stability of the American community than about the narrow confines of trimming these limited aspects of the federal budget. cost controls and cost-benefit analyses are important, but in the past seven years we’ve seen national discussions from this one-sided point of view become sadly cynical. Even the honest conservatives among my friends have been dismayed by the Republican Party’s lockstep behind the White House and Congress while it was under GOP control when they decided to reverse decades of staunch arguments in facor of balancing the federal budget. Here’s how I see it: The problems we face do NOT have to do with the strain caused by 2 government programs, especially SS, which has operated for almost three-quarters of a century like clockwork — with no scandals – and has been adjusted to fit changing circumstances along the way without undermining it’s universality. The problem mainly has to do with runaway health costs. Earlier this week we saw news reports aboput a new study showing that health costs are hurting workers who actually have insurance. If we can’t do what other democracies are doing (for example, Germany, Switzerland, Japan) in having price controls, things will only get worse.
The real American burden is not in programs meant to protect every family but in bad management of the national economy, including massive tax breaks for the very, very rich and the horror of a wrongful war for which we’ll be paying for decades to come.. (And how about our failure to invest in sustainable energy after Ronald Reagan killed the Carter period federal programs set up to start doing that?) The crisis ahead has zero to do with our having more older people, as if that’s a bad thing. It has to do with wrong-headed policies. My overall feeling is that we’re at a time when national priorities need to be considered, with everything on the table. It’s time to bring in many considerations affecting the lifelong family, including the need for better investments in education and midcareer training. That is, many long-term areas that interrelate to the future of an older society. We need to look at books like David Kay Johnston’s “Free Lunch,” about the very rich and our governments’ corporate giveaways (Johnston says he’s a lifelong Republican, BTW), or Robert Reich’s “Supercapitalism” or Chalmers Johnson’s recent writing about the true cost of our uncontrolled military (up to $1 trillion a year, with much of it unaccounted for by DOD, not even counting the war on terrorism). How about “Accountability as America’s first defense” as a slogan?

To think clearly about Social Security it is important to keep a few facts clearly in mind.

Fact 1–Social Security does not face a fiscal crisis. It can pay all currently legislated benefits for the next thirty years even if the system is not changed in any way. But minor adjustments are necessary to avoid a projected long-term deficit. That deficit, averaged over the full seventy-five years used by the actuaries to measure solvency, is small–less than one-third of the size of the tax cuts enacted during the first Bush administration: smaller, in fact, than the tax cuts for just the richest 1 percent of all Americans. Closing that deficit, though politically vexing, is technically easy and should be done as soon as possible. But the financial gap over the next seventy-five years is not in any way daunting.

Fact 2–Social Security is the bed-rock of retirement income for most Americans, supplying more than half of retirement income for more than half of retirees and all of the income for about one in five.

Fact 3–Social Security has never tried to be the sole source of income for most Americans. It is meant to be–and is–a foundation on which individuals can build financial security through personal saving and frugality. It is no substitute for personal saving, but at the same time and for most people it is an indispensible foundation of personal financial security.

Fact 4–Social Security is not just a retirement program. It is also the largest system of disability and life insurance in the nation, providing support for millions of workers who have suffered permanent and total disability.

Fact 5–Social Security benefits are the only element of financial protection available to Americans that is fully protected against inflation and guaranteed by the financially strongest entity in the world–the U.S. Treasury. To be sure, Congress has and, doubtlessly, will find it necessary on occasion to reduce benefits. But, unlike the financial roller-coaster, known as private financial markets, those adjustments are gradual and give people and business ample time to adjust.

Fact 6–Although the financial protections provided by Social Security are fundamental and of critical importance to most workers, U.S. benefits are modest compared to those of most other nations and are slated to decline modestly with respect to average earnings because of past legislation. Further cuts in those beneifts could threaten the adequacy of benefits for many and should be resisted unless they are part of an overall compromise, endorsed by both major parties, that balance Social Security revenues and outlays for future decades.

I agree that SS was never meant to provide for retirement benefits for 20+ years, but Congress has never taken any steps to modernize or change SS to reflect the economic makeup of the U.S. workforce of today. So, we have what we have - a mess. I believe that not only should the amount of SS taxes be increased but the cap should be eliminated also. Let everyone continue to pay their percentage each year regardless of how much income they make. The average working class citizen has a hard enough time making ends meet and pensions are non-existent, so SS is the only hope they have and not much hope at that.

I think all workers should be encouraged, or perhaps forced, to invest a small portion of their pay in a 401K or equivalent. Perhaps allowing workers to save 5% or so in an individual account, with matching funds taken from their SS contribution, would allow individuals to build their own retirement accounts, while still funding present Social Security requirements. The most important part is to prevent the U.S. Congress from getting its hands on the money, or it will be spent on pie-in-the-sky projects with no thought given to the future. How much actual money is in the SS Trust Fund? ZERO! I have been retired for 3 years and the fact that I began saving a little bit at a time starting at age 28, and rolled it over each time I changed jobs, allowed me to accumulate a considerable sum that has made all the difference in my retirement.

I was a member of the staff of the House Ways and Means Social Security Subcommittee from 1981-1987, and I helped to develop and draft the last big Social Security refinancing bill in 1983. I now teach tax, pensions and Social Security, and from my perspective as a pension and retirement analyst, Social Security should not only be preserved as a non-means tested social insurance retirement system, it should be expanded. Private retirement pensions are increasingly rare for most workers, and the generation following the baby boomers will rely even more heavily on private investments subject to the vagaries of the market. A strong Social Security system will be essential to prevent widespread devastating poverty in old age. The options for keeping the system solvent over the long term are neither onerous nor politically impossible - and we shoud start with broadening the wage base on which FICA taxes are paid to capture more high income earnings. This will involve increasing the wage base, as Virginia Reno suggests above, but also capturing earnings that are now disguised as income from property, as well as more vigorously policing and taxing of deferred compensation arrangements for highly paid workers. But no solution needs to be precipitate, as we still don’t know what the size of the financing shortfall may be in the future. We need to tackle Medicare first, and then see what problems, if any, we face over the long term for Social Security. Above all, it is nonsensical to treat Social Security as some sort of optional expenditure that the nation will make only if we can ‘afford’ it. Social Security is a necessity, just like national defense, and we can ‘afford’ it, if all strata of society contribute the necessary amounts. While upper income taxpayers might complain about some increased burdens on them, they should be reminded of the social stability and economic prosperity that Social Security helped to maintain during the last half of the 20th century - it’s a small price to pay, in my opinion.

Social Security is financed essentially on a pay-as-you-go basis. This financing constraint limits the options for Social Security reform. In the current political environment, it appears that increases in the payroll tax rate are not possible. The current demographic environment also limits Social Security reform options. Taken all together, with beneficiaries growing faster than covered workers, and with the payroll tax rate fixed, pay-as-you-go financing requires that average benefits grow less rapidly than average wages.

Social Security’s benefit formula sets the rate of growth of average benefits equal to the rate of growth of average wages. Social Security’s benefit formula is fundamentally inconsistent with its financing. To solve Social Security’s financing problems, the rate of growth of average benefits must be slowed. One way to partially solve the problem is to have life expectancy indexing of benefits, as is done in all defined contribution systems.

I am 74 years old. I began paying SS when I was 18. My wife and I are same age and retired @ same time. She was a school teacher and wasn’t offered SS until the last 8 of her working years. She has been denied SS, including wife’s portion or andy other SS benefit. If I die first, she will received nothing. THIS IS WRONG! I have discussed this with my Texas senators and congressmen. There is nothing they can do.

I retired at 49 and way to early for SS. I have a second career but with the half
the hours. I just hope SS is there in eight years so I can yet again cut the hours
I work.

jim you r correct

i think work permits for 15 yr olds should be increased to age 17 and those who r 17 and working should be taxed higher so that the new retirement age should be 50 yrs old for those doing physical labor; i also believe that 50 yr olds and higher should be allolwed to work a 4 hr day for 4 or 5 days a week

SS is part of a 3 legged retirement stool. the other parts that you must have are a pension and a retirement account ,(sir ,401 k etc. If you dont have the other 2 you must work in retirement to make it. also key to retiremenet survival is getting rid of all debt that you can such as car payments, credit cards etc. The borrower is slave to the lender.

Social security can provide a base from which to build a secure retirement but it was never the plan to finance twenty plus years of our retirement. I would recommend three solutions to help bolster social security. First, get the surplus dollars away from the general budget and invest them in index funds. Second, we should limit any payoff to those with income above a designated amount. $100,000 per annum for example - and adjust this number each year for inflation. Lastly we should reduce the annual increases to more accurately reflect actual costs. These three suggestions will almost completely satisfy the financial shortfall.

I am retired since 1999. If anyone thinks that their retirement can be covered by SS, they have delusioned themselves. SS was never meant to provide for our retirement. But, this assumes that retirement is a goal; retirement is the last thing one should do. Find another career, why retire? It is litterly the end of life. Retirement after several years is hell.

No thank you, the greed of well placed sometimes untouchable financial managers evident today will likely be present in a future when a plan such as this takes off.