Wednesday, 15 April 2009
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Social Security Bankrupt in 2010?
It appears that previous projections were wrong and the payouts for Social Security will exactly match receipts as early as 2010. For the next decade, the government was previously forecasting a $703 billion surplus, but that now has turned into a $620 billion deficit that the government will have to finance with debt.
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Are you counting on Social Security being around for your retirement?
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Stats: This Week All Time Posts: 0 8 Views: 0 4011 Comments: 0 140 View all posts by dan@xanga
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Comments (17)
Nope.
I have no faith.
I would hope so but after the past 2 years, I wouldnt count on it. When I pass my test for my new job license, I'm gonna do the 70/30 so I have a cushion to fall on since I will be mostly self employed.
Pretty soon people will do their banking from their mattresses again because the banks will have issues. I pray to God we wont but I do fear this recession will turn into another depression.
last i heard full benefits will be paid until 2041 but still yeah nobody intelligent is going to rely on this. That's NOT an indictment on social security. And certainly the cure-all 401K's that everyone advocated clearly hasn't fixed the problem.
The problem is we idiotically haven't FIXED social security yet. For some reason we've given up the idea that current generations have a responsibility to past generations and that's just dumb.
@nephyo@xanga - That's kind of unfair, though, considering the past generations bred like rabbits and made way too many people for the future generations to support. The baby boomers expect us to pay for their parents' mistakes.
Why is each generation paying for itself such a bad idea? At least the numbers match up (you don't get one generation trying to pay for another generation that's much larger, for example).
I'm always going to do my best to NOT rely on the government for my retirement or anything else like that. The more I can do for myself, the better off I am.
@nephyo@xanga - I disagree with how you see social security working. In theory, you are paying in so that you can get that money back. Of, course there is some exceptions to that. I say screw social security and let me invest that money myself!
Certainly not, it just basic math. Social Security always was doomed. Eventually the number of retirees would bankrupt the system. They have known that since the first day the started the system started. Unfortunately that day is almost now.
Social security had more than enough money until they tapped into it for non-social security spending....
In any case, no, social security is the Gov't robbing me of money I will never get to use or see any tangible benefit from.
It won't be there. At this rate, neither will my 401k.
@der_lila_Stern@xanga - that's not how it works nor how it was INTENDED to work. Remember when social security was implemented there were old people retiring then and plenty of people disabled. They were able to get benefits right away. And people understood that this is why they were paying into the social security insurance fund, to provide for the previous generation while at the same time creating a compact which would provide for them in future generations.
Remember social security is an insurance scheme, NOT an investment scheme. Your taxes aren't your money, they go in the fund so that it can provide benefits for the people who need it. You accept this because you know you'll probably one day need it. Just like you pay car insurance and rental insurance and for health insurance knowing full well you will probably need it one day. You might *not*. You might die before you ever need social security too. But you might need it. So you pay for the possibility. And the insurance "company" in this case the government can only provide for you if you are in need because of everyone else who pays the premiums too.
@LadyLibellule@xanga - it's not that each generation paying for itself can't work, it's that it shouldn't have to. Bigger generations also put more INTO the fund creating a surplus which OUGHT to be able to support further benefits when they retire. In fact as far as the solvency of the fund works having a bigger generation pay for a smaller generation is better since the surplus can then be invested wisely so that by the time that bigger generation retires it'll be worth even more. The reason it was setup this way in the beginning of course was because the system was setup to deal with people who were retiring THEN so that they wouldn't be a drain on the society. Those people hadn't ever paid into social security before but they still got benefits. Similarly someone who has an accident and becomes disabled gets benefits even if they haven't worked very much. That's the POINT.
The current problems with the social security systme are problems of bad management, and lack of foresight and economic sophistication when the system was setup. That combined with a slowness of Congress to correct the obvious problems as soon as they were discovered. This in part was facilitated by the fact that many never did and don't believe in social security in the first place and want to change it to something entirely different. A private investment scheme rather than a social insurance scheme. But ask many people with a 401K today how good private investment schemes are and you're likely to get an earful.
But Social Security's fundamental problem is not a problem of the entire system itself being flawed. Social insurance CAN work. It's just that we screwed it up in this case.
@nephyo@xanga - I am well aware that there are people who hugely benefited when social security was first implemented - my great Grandfather was one of them.
Social Security tax is seperate from the rest of the taxes. Look at your paystub. That is also why the social security system can be bankrupt without the entire government being bankrupt.
go in the fund so that it can provide benefits for the people who need it - that is COMPLETELY wrong. There are people who are of retirement age and could greatly benefit from social security, but some receive it because they havent put enough quarters in to get it. It is based completely on what you put in (which is directly related to what you made) It is NOT a need based formula.
I highly doubt it which sucks because of course I'll be paying into it all that time.
As a 24 year old on her own and being 100% disabled. I can say that I hope this will never come true. My SSI check is my ONLY income. Trust me when I say it's not easy to live off $600. a month. After rent,cell phone( cuz it's cheaper)meds, docs appt, food(because I cant get food stamps until I have my own place), which to add to that most people won't let you rent an apartment if you total income is only $600 a month. I can only hope and pray that this will never be true. I hope and pray that not only for me but to the other disabled people who can and more then likely will never be able to work. Yes I do have medicade but it doesnt pay for meds and doc appts copays. After all that your down to about $100 to have for the rest of the things you need. IE personal care things.
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You cannot fix a program which was never going to work in the first place -- especially not when the average age of Americans keeps going up, meaning that more and more people are retiring while fewer and fewer enter the job market. Social security will simply never work and was always going to fail, from its inception.
I've started a retirement plan, with a 401K as well as my own investments, while I'm still young enough to rebound should any of them fail to grow in worth or go south. I'm still going to keep diversifying and get ready for when I either retire, or my family should need money if, God forbid, I die (and, well, I'm active duty military, so it's a reasonable concern.)
Social security will not get to 2010 before going bankrupt. They are already bankrupt.
http://www.geldpress.com/2009/09/social-security-officially-bankrupt/