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I'm eligible to start taking SS in 2027...
Kiss Retiring At 67 Goodbye
Joshua Zumbrun, 05.12.09, 06:08 PM EDT The recession is depleting the Social Security trust fund faster than expected, increasing the odds that the retirement age will be raised.
WASHINGTON, D.C. -- Social Security, long growing unsustainably, is now in even worse shape because of the recession.
In its annual report Tuesday, the Social Security Board of Trustees projected that by 2016 Social Security will pay more in benefits than it collects in taxes. Prior to the recession, the system would have stayed in the black until 2017. Tuesday's report also said the Social Security trust fund will be exhausted in 2037, four years earlier than the estimate a year ago.
The simplest solution looks to be delaying when workers can tap Social Security, which would be another blow to Americans who were already facing the prospect of having to spend more years in the traces due to the evaporation of home equity and retirement savings amid the downturn.
In 2008, when home prices had been falling for two years in most parts of the country but before the stock market crashed, the AARP conducted a survey that found around one in five people ages 55 to 64 were delaying retirement for economic reasons. One in four people ages 45 to 54 were also expecting to retire later.
The stock market crash in October made the problem even worse. The Center for Retirement Research at Boston College estimates that from Oct. 9, 2007, to Oct. 9, 2008, (when the Dow and S&P 500 were at about the same level as they are today) the value of equity in retirement plans lost about $4 trillion. For pension plans, it means many of them are now badly underfunded. For 401(k)s and IRAs, it means a huge loss of retirement savings.
According to Tuesday's report, in 2016, Social Security will no longer collect enough revenues to pay its benefits. The Social Security trust fund that the government accounts for is lent out to other parts of the government. The trust fund is, really, just a claim on future tax revenues.
Michael Astrue, the commissioner of Social Security, says, "We should be neither casual nor hysterical about the revised insolvency dates. As with the economy as a whole, the Social Security system will weather this recession. However, the sooner we get on with the task of reforming the system, the easier it will be to make the tough choices that we all know we need to make."
Social Security is sometimes considered untouchable--too politically toxic to meddle with. However, Tuesday's report projects that the system will hit a crisis point during Obama's second term, if he is re-elected.
This is no longer another president's problem. In releasing the report, Treasury Secretary Tim Geithner said, "The president explicitly rejects the notion that Social Security is an untouchable politically and instead believes there is opportunity for a new consensus on Social Security reform."
I'm eligible to start taking SS in 2027...
That's with the current projections. Things can and likely will get worse in my opinion.In its annual report Tuesday, the Social Security Board of Trustees projected that by 2016 Social Security will pay more in benefits than it collects in taxes. Prior to the recession, the system would have stayed in the black until 2017. Tuesday's report also said the Social Security trust fund will be exhausted in 2037, four years earlier than the estimate a year ago.
We need a real tea party!
I tried to get excited over this news, but I can't. It's not like social security going insolvent means the government will quit taking 12.4% of our paychecks.
More like 15.3%, soon to be 20%.
Yeah, the route to overthrowing the present order is to protest any changes in en lement benefit payments. I know, let's protest the 0.004% of the federal budget that is "pork."
I was referring to SS alone, but point taken. We're all going to be paying a lot more. And the more you pay the less you'll get.
Ultimately, the amount you pay is tied to the amount of the benefits. Real change has to happen on that front. Of course, if "conservatives" are going to treat current benefits as en lements, then we're ed. But that makes sense, since most of these so-called conservatives are merely neo-progressive militarists who prefer sodomy by government as long as Uncle Sam speaks with a Southern twang.
Agreed, or more.
How many times have I now advocated making that tax (suppose to be insurance payment) the one we raise or lower to meet the needs of the spending? I pick this one so everyone who gets a paycheck has skin in the game of taxes. Otherwise, they laugh and say "It doesn't raise my taxes, so I vote for more spending!"
I thank God every day that I don't get the amount of government I pay for!
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