Social Security trust funds now projected to run out of money sooner than expected due to Covid

What you are suggesting fundamentally changes the the Social Security program. It is meant to be an employee contributed retirement savings/insurance plan. (and it is a really bad one at that). What you propose essentially makes it a welfare system and we may as well kill it and move it to general revenue.

 

Ultimately, you still want to punish workers who have retired as if it's their fault that Social Security is becoming insolvent. I think you will find that there is no political constituency for your solution of just letting the disaster happen and it serves them right.

 

It is ultimately more their fault than the fault of the new 19 year old worker entering the workforce today.

I gave a solution. Welfare. Either way taxpayers are fixing the problem with taxpayers money. Mine just does not only unfairly target those working with tax increase that will never go away.

 

Please spare us from the partisan nonsense. Red States were closed down long and hard, so the denial and blame shifting gets old.

Besides, it seems the difference is only one year, so something needs to be done with or without Covid. Increase payroll tax, add VAT....something

 

Mostly agree. Raise the caps -- a LOT... but, raise the age from 62 to 65 to begin drawing payments.

 

and just how much has that '19 year old worker' contributed to Social Security? Most likely, not nearly as much as the individuals collecting it. The government set up the equivalent of a Ponzi scheme. It's not the participant's 'fault'.

So new participants who will get more (COL raises) from the fund, shouldn't have to pay more in?

 

Hiking rates is just kicking the can down the road. It's been tried many times over the years.

 

You just don’t like the fact. If democrats had their way we would still be locked down and wearing masks everywhere. The fear that caused all this came from the left

 

Current workers pay approximately 85% of the amount paid out from the trust.

When did we just start blaming government and not the people that voted them into office?. Isn't this the whole election have consequences argument. The problem is in this case neither party had the will to fix it because their constituents did not voice their concerns. People will get arrest to not wear a mask in a supermarket. They will march in the streets to protest mask. When it comes to a policy that impacts them greatly they just don't care and leave it to government.

The idea of COL adjustments has nothing to do with the proposed tax increases. The SS trust fund is running out of money for one simple reason. There is not enough money in the fund to cover full payments to the receivers. The reason why this is not enough money is simple. Boomers retired and the workforce contracted. You are using a ponzi scheme to finance social security and you did not replace the participants. Add that to gross mismanagement with paying out insurance claims and monies to people that never worked and you have the situation you have now. Again everyone saw this coming. It did not suddenly sneak up on us.

 

For as long as those who don't pay into a program, will ignore the problems that program is having. Of course those who keep ignoring it have been voted in... and will continue to be voted in, because the duopoly are the only choices. dregs of the barrel are just that, regardless of political lean.

The minute they are receiving Social Security (or will) it will get fixed. Meanwhile, for those who depend on it, or will have it as part of their retirement, are effectively being kicked in the groin. Raising the amount on new workers, perhaps with a declining amount as they reach age milestones, and maybe by then people can just put it in a tax-free account in their own names, to be claimed at an age they may still be able to enjoy the use of it.

 

Well, they have their way in blue States, and none of what you say is true, so again, please spear me from the partisan BS.

I live in Florida, so I know we were locked down hard, and it wasn't done by those evil Democrats, it was done by Republicans. So what? People were dying left and right. Why do you find it so hard to own it that you have to lie about it?

Now it turns out that it had a 1 year impact of SS, and that is the topic here.

 

Even politicians pay into social security. The problem is with their pension they just don't care. Their pensions are a huge problem but that is a topic for a different discussion.

I am not unsympathetic to those that rely on SS. I just do not support the idea of raising taxes on the current workforce to fix the problem. It focuses the hardship on the group of workers and as others have pointed out young people already have enough financial burdens on them. To ask them to pay for example 2% or more into FICA when they are struggling to make rent does not sound fair to me especially when you compound it with the need is because older generations were short sighted. Also employers will need to increase their matching portion which will lead to higher prices and more inflation. I said if a cut to social security payments cases hardship it should be made up with the welfare system. That comes from general revenues and everyone that pays taxes contribute to it. We already have built in scales on tax to address income etc... That way once the boomers are gone the payments will stop. If we increase FICA taxes they will never go back down.

 

You also know that Florida and Texas were among the states to first open and I recall you complaining about the manner they done it in.

 

And if more people 'draw' on welfare, that would require more revenues also.

Our government does not have a revenue problem, they have a spending problem.

In years past, I volunteered to give up my claim on Social Security if they would stop taking it from my paycheck. We both know how that went. Since Social Security tax started at 1% in the 1930s, and it's 6.2% (employee portion) now, obviously it's gone up in past years, so why should the current generation of workers be exempted from an increase?

My 'sympathy' for the monetary woes of the young people is limited. Every generation had it's problems, different from the last generation. Most are limited on how to handle money, since it's about (self-proclaimed) the experiences, not the material goods.

According to this link, the 'working prime' generation is larger than the 'Boomer' generation, so funding the slightly higher tax to support what is left of the 'Boomer' generation shouldn't be that much of a problem.
Now, more than half of Americans are millennials or younger (brookings.edu)

 

That is why I picked welfare instead of FICA. FICA is financed only by workers. Welfare comes from general revenue so everyone who pays taxes would contribute. Including seniors being paid pensions or investments.

Kind of been my main argument for years.

I totally agree. I would gladly opt out of the SS program if I could. Increase to 6.2% was done over 30 years ago. This increase is meant to cover shortfalls in the fund due to decades of mismanagement. Remember social security is not a welfare system. It is meant to be retirement savings and insurance. IMO they 2 function should be broken up. Insurance should be mandatory and the amount charge should cover what is paid out for disability. The savings portion should be optional.

Every generation has it problems. I have no sympathies for self inflicted ones. The problem is this one was created for them by the total mismanagement by the generations before them.

That even speaks to the greater mismanagement of the fund. The whole issue is the current workforce can only support 85% of payments to the people retired. That means my generation X, the millennials and Gen Z cannot even support the payouts to Boomers and pre boomers. Think about it boomers still number more than Gen Xers and the Boomers have been dying off for years. You can't have a program that pretends to be a retirement savings on one hand and on another is an insurance company. When you pay money into insurance it does not come back. When I pay house or car insurance they do not give me my money back. The program also pays retirement money to people that never work. Combine that with high levels of fraud and it is destined for failure. How is that system sustainable?

 

Retiring early means you get less, a lot less

only way that is beneficial is if you know your health is poor and you won't live long, or your in too much pain to work anymore

with all the foreign outsourcing and foreign imports, we may need the older folks to retire earlier, not later to give jobs to the young

 

not from the President that declared a national emergency, said he was a wartime president against an invisible enemy? that issued shutdown guidelines for the entire country?

the fear comes from not knowing who to trust, when the President admits he likes playing it down, then acts like it's the end of the world, then plays it down, then goes back and forth, no wonder many scared

 

Well, there is a break-even age. If you wait until 70, then you get nothing for 8 years

Your cumulative benefits after 30 years:

• $432,000, starting at age 62
• $530,400, starting at age 66
• $580,800, starting at age 70

But how many folks make it to 100? Not many.

Your cumulative benefits after 20 years:

• $288,000, starting at age 62
• $326,400, starting at age 66
• $316,800, starting at age 70

The 20 yr difference is actually quite small.

 

it also depends on if working until 67 increases your 35-year average

but if you continue to work, you get that money too as well, so that adds to your totals, I think health plays a big part of the decision for most

many work to 65 to get medicare as well, if you have to pay for your own health care from 62 to 65, that can add up fast

 

You can pull SS while working.

 

but you lose some of that social security then too, which lengthens the break even date

https://smartasset.com/retirement/social-security-break-even-age

"Here’s a simple calculation to give you an idea of how a Social Security break-even calculator works. Say that you have the option to begin receiving $1,200 a month in benefits at age 62. You’d receive $1,700 in benefits if you wait until full retirement age at 66. Or you could receive $2,200 a month in benefits by delaying them until age 70."

making a check of 1200 a month or 2200 a month is a big difference in quality of life for many - but it depends on health and how long you live, so it's a bit of a gamble

also the COLA increases are more if you wait, so that comes into play too, if you wait, all the COLA that happened while you were waiting apply to your amount when you retire, that adds up as well as your future ones

also if they raise the min age, do you get less at full retirement, just like when they raise the full retirement age you got less if you worked until 70

raising the cap to 400k solves the social security issues, thus is really all that is needed

 

this is info on the cola's

https://www.kiplinger.com/article/r...ocial-security-boosts-the-value-of-colas.html

"Assume the beneficiary claims at 62. At 66, her monthly benefit would climb to $1,688, thanks to four years of compounding adjustments. At age 70, four more COLAs would push the benefit to $1,900.

What happens if this person waits until age 66 to claim benefits? Her first check would be for $2,251 rather than $2,000, thanks to the four years of 3% COLAs that began compounding at age 62. The adjustments would be calculated on the full $2,000 benefit."

 

The Max is
$2,364 at 62
$3,345 at 66 (full retirement age, but its 67 if you were born after 1960)
$4,194 at 70

 

I will retire sometime between 65 and 70, not sure yet when

if I knew for a fact I would live to 100, I would wait until 70

 

Regardless of what people call it, Social Security is not any form of 'insurance'. It is a mandatory tax that may be refunded to you if you live long enough, or qualify by other means.

Social Security has been a piggy bank to be pilfered on a regular basis, outside of the General Fund or not. Either throw it into the General Fund, or let people direct current and all previous contributions to an account held in their personal name, owned by the individual as an asset so it can be rolled over to dependents or heirs and assigns. Tax free, of course, since the wages it was deducted from have already been taxed. Interest on it, of course, is taxable.

I completely disagree with the idea of any type of 'welfare' payment based on one's retirement. It creates an additional layer of government dependency that I cannot and will not support.