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running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: NewtonMP2100
Date: August 31, 2021 09:37PM
.....due to pandemic.....1 year sooner....in 13 years....2034.....


Social Security Costs Expected to Exceed Total Income in 2021 as Covid-19 Takes Financial Toll

Trustees say hit from pandemic was less than feared; trust fund is now expected to be depleted in 2034 unless Congress shores up program

....The severe economic downturn caused by the Covid-19 pandemic last year weighed on the financial health of Social Security, but not nearly as much as many forecasters originally feared, according to new projections of the program’s finances.

Trustees for the Social Security trust fund in an annual report released Tuesday said the program is expected to pay benefits that exceed its income in 2021, the same as it anticipated last year at the outset of the pandemic.

While the pandemic had a significant impact on the program, the trustees said, they expect Social Security’s reserves to be depleted by 2034, only one year sooner than they estimated in their April 2020 report. Once the reserves are exhausted, benefits would be reduced automatically unless Congress steps in to shore up the program, which lawmakers have done previously.

The trustees now project elevated mortality rates related to the pandemic through 2023, and expect lower immigration and child-bearing this year and next, compared with their 2020 estimates. They also expect the pandemic has lowered worker productivity and thus economic output permanently.

“These alterations to near-term data and assumptions all significantly impact the outlook of the programs,” they said in the report.

Senior administration officials also said they expect higher inflation this year will significantly boost benefits next year, estimating Social Security beneficiaries could see close to a 6% cost-of-living increase. That would be the highest annual benefit increase since 2008, when rising gas prices pushed up the cost-of-living adjustment to 5.8%, officials said.

By comparison, beneficiaries saw a 1.3% cost-of-living adjustment in 2021, and a 1.6% adjustment in 2020.

Tuesday’s report was the first formal update from the Social Security trustees incorporating their best estimates of the effects of the pandemic, which triggered widespread business closures and layoffs last year as state and local officials imposed restrictions to curb the spread of new cases.

The resulting deep recession significantly reduced payroll tax revenue, the program’s main source of income. That loss of income was partially offset by the fact that the virus pushed up mortality rates, especially among older Americans who were more likely to be beneficiaries, thus reducing near-term program costs, senior administration officials said.

Over the long term, however, it isn’t clear how the pandemic will affect the program. It is possible that if the virus leads to the deaths of the most vulnerable or sickest Americans, the potential beneficiaries who are left may be healthier overall and live longer, boosting costs. On the other hand, those who survived Covid-19 may suffer long-term health effects that lead to earlier death or disability.

“There is an incredible amount of uncertainty,” one senior administration official said. “We haven’t lived through a pandemic like this in over 100 years, so we don’t know what the effects are.”

Social Security consists of two programs, one for retirees and one for people who claim disability benefits. The program’s income comes from tax revenue and interest from its trust fund.

In Tuesday’s report, the trustees estimated the retirement program will be able to pay full benefits on a timely basis until 2033, one year earlier than last year. After that, the program would have enough income to pay about 76% of scheduled benefits unless Congress steps in to shore up the program.

They estimated the disability fund would run out in 2057, eight years later than projected in last year’s report, though they noted that disability applications continued to decline last year.

Taken together, the programs would be able to pay 78% of scheduled benefits after the trust funds are depleted in 2034.......



insecurity......?!



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Edited 1 time(s). Last edit at 08/31/2021 09:42PM by NewtonMP2100.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: freeradical
Date: August 31, 2021 10:19PM
Well, this will be popular with the public:

- "Full" retirement age 68

- Means testing

- Raise SS withholding taxes
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: SDGuy
Date: August 31, 2021 10:28PM
so...the ponzi scheme will be crumbling?
no surprise there...
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: bfd
Date: August 31, 2021 11:10PM
Medicare A isn't doing any better. They'll run out in 5 years. That's not going to go over well with the current and upcoming crop of boomers. Biden had better get his full Build Back Better legislation passed before next fall …
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: RgrF
Date: August 31, 2021 11:13PM
Lift the artificial income ceiling and SS will be fine for as long as we have an economy.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Rolando
Date: August 31, 2021 11:30PM
Quote
RgrF
Lift the artificial income ceiling and SS will be fine for as long as we have an economy.

Agree!



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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: mattkime
Date: August 31, 2021 11:49PM
This is a problem by design.



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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Racer X
Date: September 01, 2021 02:36AM
how can they require someone to pay into it, if they can never collect? sounds like a ponzi scheme.



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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Speedy
Date: September 01, 2021 02:46AM
If one of the two tax cuts in the early 2000s had instead been dedicated to Social Security, it would be solvent permanently.



Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Ombligo
Date: September 01, 2021 05:09AM
The most painless fix for the vast majority of people is to raise the income ceiling. It is nice to talk about raising the tax on everyone, but that is not going to happen.



“No persons are more frequently wrong, than those who will not admit they are wrong.”
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Michael
Date: September 01, 2021 05:40AM
It's interesting that nobody seems to be talking about raising the early retirement age from 62 to some later age since people are living so much longer. Of course, since most people start SS at 62 that would make people, ummm, angry!

But, those of us who have been around for a long time might remember that this isn't the first call of disaster. Both Carter and Reagan presided over calls of disaster that were fixed at the end (for a period of time). I fully expect that as this one gets closer the Republicans and Democrats will, at the last minute, quit calling each other dastardly names and pass something that will punt this down the road another decade or 2. We're not nearly close enough yet. There will be too much perceived political advantage to both sides to fix this early.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: RgrF
Date: September 01, 2021 06:05AM
Quote
Michael
It's interesting that nobody seems to be talking about raising the early retirement age from 62 to some later age since people are living so much longer. Of course, since most people start SS at 62 that would make people, ummm, angry!

But, those of us who have been around for a long time might remember that this isn't the first call of disaster. Both Carter and Reagan presided over calls of disaster that were fixed at the end (for a period of time). I fully expect that as this one gets closer the Republicans and Democrats will, at the last minute, quit calling each other dastardly names and pass something that will punt this down the road another decade or 2. We're not nearly close enough yet. There will be too much perceived political advantage to both sides to fix this early.

It serves both parties to have it be an issue every decade or so - a bit of hell-raising combined with requisite fear-mongering puts nerves on edge and raises a lot of $ for both sides. Abolishing the income ceiling would resolve the issue but deprive both parties of a revenue stream they've come to rely on.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: space-time
Date: September 01, 2021 06:09AM
if they raise the income limit, they should also raise the benefits.

person A makes 100k per year and ends up with 1k/month

person B names 300k per year, pays 3x more into SS, they should get 3k/month when they retire.



Edited 1 time(s). Last edit at 09/01/2021 06:09AM by space-time.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: RgrF
Date: September 01, 2021 06:24AM
Quote
space-time
if they raise the income limit, they should also raise the benefits.

person A makes 100k per year and ends up with 1k/month

person B names 300k per year, pays 3x more into SS, they should get 3k/month when they retire.

It's supposed to be a safety net for those with little or no other income, not a retirement goal.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: ztirffritz
Date: September 01, 2021 07:00AM
It isn’t a retirement plan. It was intended to keep seniors from living off of cat food. A person making $300k/year likely has, or should have, ample savings and investments. The SS payment is likely a rounding error compared to the millions s/he has saved/invested. They’re entitled to collect it but probably don’t need it and won’t even miss it if it goes away.



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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: mattkime
Date: September 01, 2021 07:22AM
Quote
Racer X
how can they require someone to pay into it, if they can never collect? sounds like a ponzi scheme.

You’d be shocked to learn how the insurance industry works!



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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Lemon Drop
Date: September 01, 2021 07:26AM
Quote
Rolando
Quote
RgrF
Lift the artificial income ceiling and SS will be fine for as long as we have an economy.

Agree!

Yep. Fixable problem. Definitely not a ponzi scheme, but it does make assumptions about population and wage growth that may not hold up. So we will adjust. Relax.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: space-time
Date: September 01, 2021 08:12AM
Quote
ztirffritz
It isn’t a retirement plan. It was intended to keep seniors from living off of cat food. A person making $300k/year likely has, or should have, ample savings and investments. The SS payment is likely a rounding error compared to the millions s/he has saved/invested. They’re entitled to collect it but probably don’t need it and won’t even miss it if it goes away.

Understood. However, US is so anti-social programs that I am surprised this Social security even exists.

This is similar to what you would expect in a "socialist country" in Western Europe. Not sure how this was even possible to implement in the US.

I have no problem with what it is, however I am paying a lot into it and should something catastrophic happen to me, lose all my savings due to market crash, illness, or whatever, I want to know that the little bit of SS income is there to guarantee that I do not live off cat food when I am 75. It will run out of money well before that. So why am I paying into it now?

This needs to be fixed.



Edited 1 time(s). Last edit at 09/01/2021 08:13AM by space-time.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Acer
Date: September 01, 2021 08:35AM
"Social" wasn't firmly established as a trigger word until the cold war.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Acer
Date: September 01, 2021 08:38AM
My high school history teacher used to say that when it comes down to it. we'll just print the money for social security if we have to. Which is pretty much how we've been funding everything else since then. (Except the post office, THAT must turn a profit!! But I digress.)
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: pdq
Date: September 01, 2021 11:36AM
Quote
SDGuy
so...the ponzi scheme will be crumbling?
no surprise there...

This seriously needs to be moved to the other side.

As someone else noted, this is how all insurance works, including social insurance. No business, insurance or otherwise, buries money in a vault to pay off promised debts in the (sometimes far) future.

If you imagine that’s what this is, you really don’t understand the situation.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: MikeF
Date: September 01, 2021 12:04PM
The writing has been on the wall for a long time:
[www.ssa.gov]

$25 paid in. $23K paid out.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: JoeH
Date: September 01, 2021 12:07PM
Quote
space-time
Quote
ztirffritz
It isn’t a retirement plan. It was intended to keep seniors from living off of cat food. A person making $300k/year likely has, or should have, ample savings and investments. The SS payment is likely a rounding error compared to the millions s/he has saved/invested. They’re entitled to collect it but probably don’t need it and won’t even miss it if it goes away.

Understood. However, US is so anti-social programs that I am surprised this Social security even exists.

This is similar to what you would expect in a "socialist country" in Western Europe. Not sure how this was even possible to implement in the US.

I have no problem with what it is, however I am paying a lot into it and should something catastrophic happen to me, lose all my savings due to market crash, illness, or whatever, I want to know that the little bit of SS income is there to guarantee that I do not live off cat food when I am 75. It will run out of money well before that. So why am I paying into it now?

This needs to be fixed.

"Running out" does not mean all SS payments end. It means that instead of the full benefits currently scheduled there will be enough money coming into the system to pay something in the 75-80% range.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: anonymouse1
Date: September 01, 2021 12:53PM
Umm, this is partly BS. SS is paid from general revenues, IIRC. The "running out" is just an accounting effect.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Lux Interior
Date: September 01, 2021 01:05PM
Quote
space-time
Understood. However, US is so anti-social programs that I am surprised this Social security even exists.

That's only really applicable to programs that benefit other people. Things like unemployment & food stamps & welfare.

Most people think they are going to need Medicare, so they like it, because they will benefit. Same with SS...and Obamacare, when they realized that it helped them. Just call it the Affordable Care Act, and all is well.

And some don't even realize that these are government programs.

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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: jdc
Date: September 01, 2021 01:11PM
I read on FB, If you type in your SSN, thats how much money you retire with.

Im gonna get 468,894,502!

w00t!





Edited 999 time(s). Last edit at 12:08PM by jdc.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Paul F.
Date: September 01, 2021 01:47PM
Quote
Lemon Drop

Yep. Fixable problem. Definitely not a ponzi scheme, but it does make assumptions about population and wage growth that may not hold up. So we will adjust. Relax.

Those paying in the future fund those that will be retiring first... It's the very textbook definition of a Ponzi scheme...
But, yes, it is fixable.
It was a stupid way to structure it to begin with, but, this is a manageable problem.



Paul F.
-----
A sword never kills anybody; it is a tool in the killer's hand. - Lucius Annaeus Seneca c. 5 BC - 65 AD
----
Good is the enemy of Excellent. Talent is not necessary for Excellence.
Persistence is necessary for Excellence. And Persistence is a Decision.

--

--

--
Eureka, CA
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: wave rider
Date: September 01, 2021 01:56PM
Quote
Paul F.
It's the very textbook definition of a Ponzi scheme...

Which textbook? Asking for a friend…



=wr=
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Lemon Drop
Date: September 01, 2021 02:20PM
Quote
Paul F.
Quote
Lemon Drop

Yep. Fixable problem. Definitely not a ponzi scheme, but it does make assumptions about population and wage growth that may not hold up. So we will adjust. Relax.

Those paying in the future fund those that will be retiring first... It's the very textbook definition of a Ponzi scheme...
But, yes, it is fixable.
It was a stupid way to structure it to begin with, but, this is a manageable problem.

Here is an excellent article, and a few excerpts, that explain very clearly why it is absurd to call SS a "ponzi scheme."

[www.ncpssm.org]

"Lawmakers, candidates and columnists who support cutting Social Security benefits and/or privatizing the program often claim that Social Security is a “Ponzi scheme.”  The history and facts about Ponzi schemes demonstrate that the accusation is absurd. 

...

Social Security is a pay-as-you-go system.  Current contributors pay for current beneficiaries.  It transfers income from the current generation of workers to the current generation of retirees, with the promise that there will be another generation of workers to pay for the current generation of workers’ retirement. It does not require a doubling of participants every time a payment is made to a current beneficiary or a geometric increase in the number of participants.  In its essence, Social Security is a contract between generations, binding together the interests of both young and old in a system that provides protection to all. 

Unlike a fraudulent secretive Ponzi scheme, Social Security’s finances are transparent to the public, as required by law.  Each year Social Security’s actuaries release a detailed report on the system’s finances.  Its dedicated funding source – Federal Insurance Contributions Act (FICA) payroll taxes of current workers – are used to pay benefits for current beneficiaries.  For years, these taxes more than covered the cost of the benefits, with the surplus (currently, $2.9 trillion) invested in U.S. Treasury securities, widely considered by finance industry professionals and foreign governments as the world’s best and safest investment.  The U.S. government has never defaulted on its Treasury security obligations. 

...

There is no credible comparison between Social Security and a Ponzi scheme.  Social Security has fulfilled its promise to workers since the first benefits were paid in January 1940.  With the support of the American people, the President and the Congress, there is no reason to believe that Social Security will not keep its promise to future generations and continue to pay benefits for years to come."
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Paul F.
Date: September 01, 2021 02:55PM
Just because it has not collapsed yet, and has the backing of the government (who can print money if necessary), does not mean it's not identical in function to a ponzi scheme.

If it quacks like a duck, and requires the younger workers to pay for the older retirees in order to function...



Paul F.
-----
A sword never kills anybody; it is a tool in the killer's hand. - Lucius Annaeus Seneca c. 5 BC - 65 AD
----
Good is the enemy of Excellent. Talent is not necessary for Excellence.
Persistence is necessary for Excellence. And Persistence is a Decision.

--

--

--
Eureka, CA
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Lemon Drop
Date: September 01, 2021 03:13PM
Quote
Paul F.
Just because it has not collapsed yet, and has the backing of the government (who can print money if necessary), does not mean it's not identical in function to a ponzi scheme.

If it quacks like a duck, and requires the younger workers to pay for the older retirees in order to function...

The function of a Ponzi scheme is to enable the perpetrator to commit investment fraud. That's not what SS is. For the many reasons explained above.

How would you design a program to keep seniors out of poverty, Paul? All government entitlements are paid for with current revenues, including Medicare.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Michael
Date: September 01, 2021 03:22PM
Quote
space-time
if they raise the income limit, they should also raise the benefits.

person A makes 100k per year and ends up with 1k/month

person B names 300k per year, pays 3x more into SS, they should get 3k/month when they retire.

My wife and I made very different amounts of money throughout our earning years; one of us earned substantially more than the other for 35 years and for the last 5 years before retirement made twice what the other one's highest salary was. When we filed for SS at the same time the higher earner was at full retirement age and the lower earner was 2 years younger than full retirement age. I've read that each year you start SS earlier than full retirement it costs 7%. So, the lower earner should have had a check that was 14% lower than what it would have been at full retirement age. I was very surprised that the lower check was 78% of the higher one. So, the same percentage of salary contributed through the working years, substantially more salary (and so payments into SS) for one, the other having a 14% cut for retiring early and it was still only a 22% difference. Without retiring early it would have been an 8% difference. Through the years I had read many times that SS payouts are related to how much was paid in. That's true but with a rather substantial asterisk! There seems to be a pretty substantial progressive aspect to payments. Turns out I like that!
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: pdq
Date: September 01, 2021 03:53PM
Quote
Paul F.
Just because it has not collapsed yet, and has the backing of the government (who can print money if necessary), does not mean it's not identical in function to a ponzi scheme.

If it quacks like a duck, and requires the younger workers to pay for the older retirees in order to function...

Car insurance payouts are made by insurance companies out of other customers’ premiums. Is that a Ponzi scheme?

Life insurance payouts are made by companies using premiums they collect from usually younger, still-living customers. Is that a Ponzi scheme?
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Bill in NC
Date: September 01, 2021 06:53PM
Quote
Lemon Drop
Quote
Paul F.
Quote
Lemon Drop

Yep. Fixable problem. Definitely not a ponzi scheme,, but it does make assumptions about population and wage growth that may not hold up. So we will adjust. Relax.

Those paying in the future fund those that will be retiring first... It's the very textbook definition of a Ponzi scheme...
But, yes, it is fixable.
It was a stupid way to structure it to begin with, but, this is a manageable problem.

Here is an excellent article, and a few excerpts, that explain very clearly why it is absurd to call SS a "ponzi scheme."

[www.ncpssm.org]

"Lawmakers, candidates and columnists who support cutting Social Security benefits and/or privatizing the program often claim that Social Security is a “Ponzi scheme.”  The history and facts about Ponzi schemes demonstrate that the accusation is absurd. 

...

Social Security is a pay-as-you-go system.  Current contributors pay for current beneficiaries.  It transfers income from the current generation of workers to the current generation of retirees, with the promise that there will be another generation of workers to pay for the current generation of workers’ retirement. It does not require a doubling of participants every time a payment is made to a current beneficiary or a geometric increase in the number of participants.  In its essence, Social Security is a contract between generations, binding together the interests of both young and old in a system that provides protection to all. 

Unlike a fraudulent secretive Ponzi scheme, Social Security’s finances are transparent to the public, as required by law.  Each year Social Security’s actuaries release a detailed report on the system’s finances.  Its dedicated funding source – Federal Insurance Contributions Act (FICA) payroll taxes of current workers – are used to pay benefits for current beneficiaries.  For years, these taxes more than covered the cost of the benefits, with the surplus (currently, $2.9 trillion) invested in U.S. Treasury securities, widely considered by finance industry professionals and foreign governments as the world’s best and safest investment.  The U.S. government has never defaulted on its Treasury security obligations. 

...

There is no credible comparison between Social Security and a Ponzi scheme.  Social Security has fulfilled its promise to workers since the first benefits were paid in January 1940.  With the support of the American people, the President and the Congress, there is no reason to believe that Social Security will not keep its promise to future generations and continue to pay benefits for years to come."

Not really.

The "SS Trust Fund" consists of special, unmarketable securities, not standard T-notes, bills, or bonds.

The fund itself is nothing more than an actuarial placeholder to represent the aggregate surplus from previous years that was diverted to the general fund, compounded by an arbitrary, blended rate of interest.

When one of those Trust Fund securities is "redeemed" the feds end up selling an equivalent amount of marketable debt, increasing the national debt...though nobody seems to care about that anymore.



Edited 2 time(s). Last edit at 09/01/2021 07:01PM by Bill in NC.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Bill in NC
Date: September 01, 2021 06:58PM
Quote
space-time
if they raise the income limit, they should also raise the benefits.

person A makes 100k per year and ends up with 1k/month

person B names 300k per year, pays 3x more into SS, they should get 3k/month when they retire.

Given "bend points" SS doesn't work like the above...high income earners already lose out.

Nothing will change even if the wage cap is removed.

The whole purpose of "bend points" was to weigh benefits in favor of lower-income earners.

Once past the second "bend point" little of your SS tax withheld is credited towards your monthly benefits.

That does allow people to retire early...they don't lose much in benefits even taking into account zero earning years once they hit the second bend point.



Edited 3 time(s). Last edit at 09/01/2021 06:59PM by Bill in NC.
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Lemon Drop
Date: September 01, 2021 07:03PM
[www.ssa.gov]
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Re: running on empty?!....report today says Social Security will run out sooner than expected, by 2034.....
Posted by: Bill in NC
Date: September 02, 2021 08:40AM
Quote
Lemon Drop
[www.ssa.gov]

Again, just an actuarial placeholder.

On a cash basis, whenever a trust fund security is redeemed in a particular year to help pay that year's SS benefits:

1. either taxes have to be collected to pay for it or

2. the funds must be borrowed by selling marketable securities (T-bills, notes, bonds) in the open market.

So additional debt is sold in the open market.

I think most people here don't understand that the U.S. budget is on an actuarial, not cash, basis.



Edited 3 time(s). Last edit at 09/02/2021 08:43AM by Bill in NC.
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