11:30 AM
social security not secure
Unknown
The baby boomer generation - those born in the years following World War II up to about 1957 - comprises an estimated 77 million Americans. Those boomers are just starting to hit the traditional retirement age, with a major surge still to come over the next 15 years.
The country is ill-equipped to deal with this influx of people onto the Social Security rolls. It's not ready for the Medicare hit either. Back in 1950 there were 16 workers for every retiree. The system was well-funded by that metric. Today, there are only about 3 workers per retiree.
Social Security, in fact, is even more troubled than the calculation suggests. That's because everything you are paying into the Social Security system now as a worker is being borrowed to pay down the massive U.S. budget deficit. Yes, it's true.
When we here we are borrowing an unbelievable 40 percent of our federal government's daily expenditure, that's glossing over a key point. About half of our tax revenue now comes from Social Security taxes! Around 50 percent of Americans pay no income tax, but they do pay Social Security tax. Take away Social Security tax, then the federal government is actually borrowing about 70 percent of our current expenditures.
Social Security is not a pension plan. It is a transfer payment. That transfer payment will be under extreme pressure when we no longer borrow and print without spurring very high, unsustainable inflation. When that day comes comes, Social Security transfer payments will have to decrease. Instead of everyone getting a check, the program will become means tested.
Social Security will become a welfare payment. If you really need welfare, you will receive some level of Social Security. Consider all that money you paid into the system as a tax on your earnings.
Don't count Social Security as part of your retirement savings. It quite likely won't be there for anyone who have enough to be over the means-tested threshold. It will be nothing more than a safety net, not a savings that provides income.
The country is ill-equipped to deal with this influx of people onto the Social Security rolls. It's not ready for the Medicare hit either. Back in 1950 there were 16 workers for every retiree. The system was well-funded by that metric. Today, there are only about 3 workers per retiree.
Social Security, in fact, is even more troubled than the calculation suggests. That's because everything you are paying into the Social Security system now as a worker is being borrowed to pay down the massive U.S. budget deficit. Yes, it's true.
When we here we are borrowing an unbelievable 40 percent of our federal government's daily expenditure, that's glossing over a key point. About half of our tax revenue now comes from Social Security taxes! Around 50 percent of Americans pay no income tax, but they do pay Social Security tax. Take away Social Security tax, then the federal government is actually borrowing about 70 percent of our current expenditures.
Social Security is not a pension plan. It is a transfer payment. That transfer payment will be under extreme pressure when we no longer borrow and print without spurring very high, unsustainable inflation. When that day comes comes, Social Security transfer payments will have to decrease. Instead of everyone getting a check, the program will become means tested.
Social Security will become a welfare payment. If you really need welfare, you will receive some level of Social Security. Consider all that money you paid into the system as a tax on your earnings.
Don't count Social Security as part of your retirement savings. It quite likely won't be there for anyone who have enough to be over the means-tested threshold. It will be nothing more than a safety net, not a savings that provides income.