What should be done to fix Social Security?

[Tamriel Terror]

It's a growing issue here in the US especially considering how expensive it is and that the trust runs out in like 2033. So what needs to be done to fix it in your opinions?

Should the government increase taxes, massively cut benefits, etc.?

I'm 23 so my current investment portfolio is excluding SS.

http://www.forbes.com/sites/jamieho...-in-worse-shape-than-we-thought/#26c331a075a6
Social Security is the backbone of retirement planning in the United States. Nearly one-third of retirees receive almost all of their retirement income from the system and nearly two-thirds receive more than half of their retirement income from Social Security. In short, America’s retirees need Social Security. However, it is not only retirees that rely upon Social Security. The Social Security Disability Insurance Trust Fund provides benefits to disabled workers, their spouses, and children. In December 2014, nearly 11 million people received Disability Insurance from Social Security, with an average benefit of roughly $1,000 per month. While the Old-Age and Survivors Insurance Trust Fund, the portion of Social Security that most people think of as their retirement benefits, is not set to run out of money in the trust until 2033, the Disability Insurance Trust will run out in 2016 if nothing is changed. This shortfall would result in a nearly 20% cut to benefits, reducing those $1,000 checks down to $800 a month. The acting commissioner of the Social Security Administration, Carolyn Colvin, recently stressed the importance of the situation when she stated “I don’t want to be dramatic, but I’ve worked with this population my whole career. I think we [would] give them a death sentence[.]” However, some of the proposals coming from Congress and the current Administration would provide only temporary relief, again delaying any solutions to the real funding issues with Social Security.

 

[Falsedawn]

Well, aside from stopping our politicians from cutting taxes to dip into social security, there's really only two options I see.

-A slight FICA tax increase on both sides (employer/employee). I've seen this quoted at 2% on both ends to extend benefits to the 2080s.

-Increasing the retirement age (ehhhhh, not a fan)

But yeah, gotta plug that hole where our politicians have intentionally eroded it to try their hand at privatization. That would not be good.

 

[Jack V Savage]

It's a growing issue here in the US especially considering how expensive it is and that the trust runs out in like 2033. So what needs to be done to fix it in your opinions?

Should the government increase taxes, massively cut benefits, etc.?

There would be no need to massively cut benefits, and the funding gap is relatively insignificant. Raising the cap (or eliminating it and cutting payroll tax rates), funding from the general, raising rates, cutting the rate of growth of benefits (note that because of the way they calculate inflation, "inflation adjustments" actually lead to higher real benefits over time), or some combination of the above would do it. Biggest fake issue in American politics today (now that deficit hysterics have gone back into their hole).

 

[gtm3]

Well, aside from stopping our politicians from cutting taxes to dip into social security, there's really only two options I see.

-A slight FICA tax increase on both sides (employer/employee). I've seen this quoted at 2% on both ends to extend benefits to the 2080s.

-Increasing the retirement age (ehhhhh, not a fan)

But yeah, gotta plug that hole where our politicians have intentionally eroded it to try their hand at privatization. That would not be good.

2% is a slight increase? wow.

And why not increase retirement age? When the numbers were run a while ago people did not live nearly as long.

 

[gtm3]

Biggest fake issue in American politics today (now that deficit hysterics have gone back into their hole).

Wrong.

 

[freakyfarley]

make me king

 

[Falsedawn]

2% is a slight increase? wow.

And why not increase retirement age? When the numbers were run a while ago people did not live nearly as long.

2% is a generous rounding up, it would effectively be less than that.

And those life expectancy gains you're touting are disproportionately for those of higher incomes, which kinda defeats the purpose of social security if you're curtailing benefits for lower earners when they're the ones most in need of them.

 

[Jack V Savage]

2% is a slight increase? wow.

And why not increase retirement age? When the numbers were run a while ago people did not live nearly as long.

Major adjustments accounting for that (and other funding issues) were made in 1983. So the relevant point of comparison is what we expected post-retirement life expectancy to be in 1983. That is, it's a non-issue.

Wrong.

What's a bigger fake issue?

And those life expectancy gains you're touting are disproportionately for those of higher incomes, which kinda defeats the purpose of social security if you're curtailing benefits for lower earners when they're the ones most in need of them.

Also an important point.

 

[Thurisaz]

Easy. Abolish it completely.

 

[Fawlty]

The faux concern for social security "running out" is being expressed by the party who wants it gone and "privatized." That should raise some alarms. What's really happening is that the largest pool of victimizable money in the world is sitting up there all shiny, and they wants it, my precious.

 

[Tamriel Terror]

Easy. Abolish it completely.

Wouldn't that make a lottttt of people not only broke but homeless and also people wouldn't have nearly as much spending money thus hurting millions of corporations and hurting the economy? Possibly causing a recession? People rely on social security

 

[Thurisaz]

Wouldn't that make a lottttt of people not only broke but homeless and also people would have nearly as much spending money thus hurting millions of corporations and hurting the economy? Possibly causing a recession? People rely on social security

That's one of the better reasons for ending it. What has to be propped up won't stay up and the sooner it fails the better for everyone involved. And sure, initially there would be coughs, as is the case every time the social fabric experiences a change. People adapt and learn.

 

[IdahoCBR]

Ive worked with other electricians who've grossed over $140k in a year and IMO, a $127k cap on SS deductions is too low.

 

[panamaican]

That's one of the better reasons for ending it. What has to be propped up won't stay up and the sooner it fails the better for everyone involved. And sure, initially there would be coughs, as is the case every time the social fabric experiences a change. People adapt and learn.

When you say this, are you accounting for why we adopted Social Security in the 1st place?

 

[Mark Hunts FIST]

Do your future self a favor and pretend it won't exist. Thank me later.

 

[Thurisaz]

When you say this, are you accounting for why we adopted Social Security in the 1st place?

I don't know it. One of the benefits of not being American.

 

[sub_thug]

I think the cap is going to have to be lifted or eliminated to save SS. Also, we should probably raise the retirement age. That would more than solve the problem. I'm considerably more concerned about Medicare and Medicaid at this point than I am SS.

 

[panamaican]

I don't know it. One of the benefits of not being American.

That explains a lot...

We have social security because without it, people were not saving enough to retire on and not be on the street. Once the ability to work the hours that most companies require for a full paycheck disappears, the ability to self-sustain generally went with it.

You need only look at the people's actual savings rates to understand that despite the hoopla about savings and self-sufficiency, most Americans are not in a position to save enough to live on. Not unless wages see a dramatic increase...which is not going to happen.

Part of it is human nature, part of it is the natural impact of technology on wages over time. But we didn't end up with our current system by random chance or by populist greed.

 

[Tamriel Terror]

Do your future self a favor and pretend it won't exist. Thank me later.

already am lol. My investment port has no plans or calculations for SS

 

[Tamriel Terror]

That explains a lot...

We have social security because without it, people were not saving enough to retire on and not be on the street. Once the ability to work the hours that most companies require for a full paycheck disappears, the ability to self-sustain generally went with it.

You need only look at the people's actual savings rates to understand that despite the hoopla about savings and self-sufficiency, most Americans are not in a position to save enough to live on. Not unless wages see a dramatic increase...which is not going to happen.

Part of it is human nature, part of it is the natural impact of technology on wages over time. But we didn't end up with our current system by random chance or by populist greed.

Yea, I was researching a little bit yesterday and what do you know, Americans suck ass at saving and investing. The avg american only has like 60k in investments, most are in debt, and like 50% have <$1,000 in savings.