SS funding

[Neils]

Wondering why the depleted SS funding is not being restored to cover expected expenditures for the next 50 years?

With all the trillions of $$$ being given away and lots of new people being added to the qualified recipient list, it seems like a good time to invest a few billion $$$ in SS funding.

[dewilson58]

Really??
Jus kick'n the can.
:ohdear:

[Stu from NYC]

All politicians want is to kick the can down the road for others to deal with.

the longer they wait to fix it the harder it will be.

[Bill14564]

Rob Peter to pay Paul? Could make things even worse for SS by making it a target again.

[retiredguy123]

Wondering why the depleted SS funding is not being restored to cover expected expenditures for the next 50 years?

With all the trillions of $$$ being given away and lots of new people being added to the qualified recipient list, it seems like a good time to invest a few billion $$$ in SS funding.
I'm not sure what you are asking. All Federal programs are funded with borrowed money because there is a national debt. You can pretend that there is a Social Security "trust" fund, but it really doesn't exist.

[tvbound]

10 Myths and Misconceptions About Social Security (https://www.aarp.org/retirement/social-security/info-2020/10-myths-explained.html)

[blueash]

There have been serious proposals on shoring up the Social security finances for years. The last significant changes happened in 1980s. There are yearly changes in the cap subject to FICA but those don't keep up with the increased cost of SSec. For 2021 the earned income cap will be 142800 after which any earned income is free of SSec taxation.

In 1982 90% of the earnings of Americans was taxed for SSec. But only 84% was taxed in 2017. This is because of increased income inequality. Eliminating the cap would make SSec solvent for 40 years per the Congressional Research Service (https://fas.org/sgp/crs/misc/RL32896.pdf), as long as the benefit calculations remained the same.

For those who are unaware, the benefits are NOT the same percentage (https://www.aarp.org/retirement/social-security/questions-answers/social-security-benefits-calculation.html#:~:text=In%202021%2C%20it%20is%3A ,of%20any%20amount%20over%20%246.002.) of payout for pay-in at all income levels. Someone whose average earned income was $70,000/year does not get double the benefit of someone who averaged $35,000/yr. The system is weighted to give a higher retirement benefit to the lower earner relative to the amount paid in. Obviously the higher earner does get a higher absolute SSec payment

Read page 16 of the linked report (https://fas.org/sgp/crs/misc/RL32896.pdf) to see how this works.
A small increase in the tax rate from the present 12.4% to 13.8% makes the system solvent for 75 years. Keep in mind that the payment into Medicare from earned income is not capped at all. All earned income is Medicare taxed.

Another issue is that employers are paying a lower amount of their benefit to employees as earned income. This is mostly true of higher earners. The working poor get paid a salary all of which is subject to FICA and Medicare tax, period. The better off get a salary subject to FICA, and health insurance, not taxed, life insurance not taxed, 401K match not taxed, Flexible spending account not taxed, Disability insurance not taxed. Just including the cost benefit of fringes in the Soc Sec taxable base would eliminate 43% of the solvency gap (https://www.cbpp.org/research/social-security/increasing-payroll-taxes-would-strengthen-social-security)

Lastly I'd like to ask what the OP meant by
lots of new people being added to the qualified recipient list, There has been no change in the requirements to qualify for Social Security in decades.

[DAVES]

Wondering why the depleted SS funding is not being restored to cover expected expenditures for the next 50 years?

With all the trillions of $$$ being given away and lots of new people being added to the qualified recipient list, it seems like a good time to invest a few billion $$$ in SS funding.

Economics, REALITY. If, any company ran it's accounting as our government does, we the people would scream and demand they investigate and close down that business.

Social security. They and we the people allowed, demanded it get out of hand. I recall reading when FDR created, allowed the plan to be created, there were 14 plus people paying in for everyone collecting. Today, the number is 2.5. To make it worse, prescription coverage has been added, funding for national health care has been added.
With no additional tax to cover it.

The choice, cut back what is paying out. Wait! I paid in for 45 years. What do you mean you spent my money to buy our parent's votes? Increase taxes on young people? Wait
we want to tax them into poverty they will scream. What we are doing. We are increasing the deficit. A battle cry of the American Revolution-No taxation without representation. We are taxing people that have not even been born yet.

We the people are guilty but blame others. It is glorious to spend more, pay out more.
Paying old debts. There is no glory in that, till after it explodes and there is no other choice.

[Stu from NYC]

There have been serious proposals on shoring up the Social security finances for years. The last significant changes happened in 1980s. There are yearly changes in the cap subject to FICA but those don't keep up with the increased cost of SSec. For 2021 the earned income cap will be 142800 after which any earned income is free of SSec taxation.

In 1982 90% of the earnings of Americans was taxed for SSec. But only 84% was taxed in 2017. This is because of increased income inequality. Eliminating the cap would make SSec solvent for 40 years per the Congressional Research Service (https://fas.org/sgp/crs/misc/RL32896.pdf), as long as the benefit calculations remained the same.

For those who are unaware, the benefits are NOT the same percentage (https://www.aarp.org/retirement/social-security/questions-answers/social-security-benefits-calculation.html#:~:text=In%202021%2C%20it%20is%3A ,of%20any%20amount%20over%20%246.002.) of payout for pay-in at all income levels. Someone whose average earned income was $70,000/year does not get double the benefit of someone who averaged $35,000/yr. The system is weighted to give a higher retirement benefit to the lower earner relative to the amount paid in. Obviously the higher earner does get a higher absolute SSec payment

Read page 16 of the linked report (https://fas.org/sgp/crs/misc/RL32896.pdf) to see how this works.
A small increase in the tax rate from the present 12.4% to 13.8% makes the system solvent for 75 years. Keep in mind that the payment into Medicare from earned income is not capped at all. All earned income is Medicare taxed.

Another issue is that employers are paying a lower amount of their benefit to employees as earned income. This is mostly true of higher earners. The working poor get paid a salary all of which is subject to FICA and Medicare tax, period. The better off get a salary subject to FICA, and health insurance, not taxed, life insurance not taxed, 401K match not taxed, Flexible spending account not taxed, Disability insurance not taxed. Just including the cost benefit of fringes in the Soc Sec taxable base would eliminate 43% of the solvency gap (https://www.cbpp.org/research/social-security/increasing-payroll-taxes-would-strengthen-social-security)

Lastly I'd like to ask what the OP meant by
There has been no change in the requirements to qualify for Social Security in decades.

Social Security is not meant to be a way of transferring money from rich to others but a pension system so you more or less get back what you put into it.

To me the best way to fix this is to increase the retirement age on a gradual basis to somewhere in the early 70's and keep increasing the age as our lifespans increase.

When they started this shell game and payments started at 65 they kind of forgot to remind people that the vast majority would not live that long so they amassed a large nest egg that the govt decided to borrow with so far no intention to repay.

And remarkably we keep voting in the same people who have mismanaged our economy for years and years.

[Bucco]

I suggest to all. A simple trick. I am not as rich or as famous as those caught in that College admissions scandal. In fact I grew up poor, my dad was a WWII wounded combat vet. Real wounds, physical and mental. His legs were badly burned and he had a piece of a shell too close to his spinal cord to be removed.

Those people buying their kids into schools. The real problem is that you nor I could afford to do it so it is not fair. Those same schools. It is ok, legal for parents to buy a wing a building a scholarship fund. Unfair advantage? I had unfair advantages too.
My parents were married. I knew if I got into trouble my parents were there to help me.
My dad, I still have it. First think he ever gave me was a book. Amusing in terms of reality. My dad must have thought I would learn to read by six months old.

We do not choose the cards we are dealt. We do choose how we play them. My fault,
my parents fault? Failure is not, was not an option.

Thanks for your post but frankly i do not understand your post in relation to the thread topic.

I simply made an observation about taxes, and then shared how your life was blessed (and great for you). I do however read that type of post on here quite a bit and not sure what to make of it. Poor, rich, middle, whatever.....we all had options and decisions. I do not accept the basis that rich did not put anyone other than "ahead of the pack" in any race......still dependent on living a good life, working hard, etc. Those things apply to poor or rich, but poor or rich does not guarantee success. Seems many think they are alone in making good decisions and also think that if you make those decisions, you will be successful. That is not true, as we all know. People who are immoral, corrupt, etc are living the good life but not because they made all the right decisions.....people who are very moral, good folks who did it all right are living a tough life, not because they made all the right decisions either. Generality do not cover it.

If all we needed to do was live a good clean, moral life and play by the rules, it would be great, but that is not real life. Some do not even have to worry if they play the cards right.

[Bucco]

Social Security is not meant to be a way of transferring money from rich to others but a pension system so you more or less get back what you put into it.

To me the best way to fix this is to increase the retirement age on a gradual basis to somewhere in the early 70's and keep increasing the age as our lifespans increase.

When they started this shell game and payments started at 65 they kind of forgot to remind people that the vast majority would not live that long so they amassed a large nest egg that the govt decided to borrow with so far no intention to repay.

And remarkably we keep voting in the same people who have mismanaged our economy for years and years.

A suggested recent read.....

High Income Inequality Hurts Social Security's Finances (https://www.forbes.com/sites/christianweller/2019/04/24/high-income-inequality-hurts-social-securitys-finances/?sh=198d0f04826a)

"Yet, income inequality adversely affects Social Security’s finances at time when American families need Social Security benefits more. Income inequality rose starting in the 1980s and remained persistently high in recent decades. Income growth at the bottom and in the middle of the income distribution have slowed, but accelerated at the top and grown faster at the top."

[DAVES]

Social Security is not meant to be a way of transferring money from rich to others but a pension system so you more or less get back what you put into it.

To me the best way to fix this is to increase the retirement age on a gradual basis to somewhere in the early 70's and keep increasing the age as our lifespans increase.

When they started this shell game and payments started at 65 they kind of forgot to remind people that the vast majority would not live that long so they amassed a large nest egg that the govt decided to borrow with so far no intention to repay.

And remarkably we keep voting in the same people who have mismanaged our economy for years and years.

We the people, all people are the same and have always been the same. We want, we demand and yet we think someone anyone but us should pay.

Government of the people by the people and for the people and all that stuff. Government will do what we demand. We demand more and yet we say any body but us should pay for it

The national debt, last time I collected my courage enough to look is 29 Trillion dollars.
Does anybody think as I do? First thing is how many of us understand what one trillion dollars is let alone 29 of them? If, we inherited a billion or so and decided we wanted to pay off part of the national debt, who would you make the check out to? Simple questions sometimes seem funny or foolish.

The answer is a rude awakening. Many would say China. The reality is shocking.
Last time I looked, it was Japan and China. We owe slightly more to Japan than to China. More important, more shocking is that we owe about 20% of the national debt to
Japan and China together. Social Security holds 40% of the national debt. The reality,
we are buying our own debt. As said elsewhere if any company was being run this way
we would, we should demand our government close it down.

We are the problem. We fight among ourselves. We refuse to see the real problem
we blame anyone but ourselves. Sadly, throughout history that has been and will continue to be so.

[blueash]

Social Security is not meant to be a way of transferring money from rich to others but a pension system so you more or less get back what you put into it.

...

This simply is not true. From the very beginning the formula for calculating benefits gave a greater payment to lower earning workers, thus the wealthy were paying more dollars into the system per dollar received back. It has always functioned in part as a wealth transfer.
Individuals were insured (https://www.ssa.gov/history/reports/crsleghist2.html#:~:text=Individuals%20were%20insu red%20if%20they,before%20they%20reached%20age%2065 .) if they had worked at least 5 years in jobs covered by the program, and earned total wages of at least $2,000 in those jobs, before they reached age 65. The amount of the benefit was related to the amount of total wages covered by the program, but the formula was weighted to give a greater return, on payroll taxes paid, to low-wage earners.

As the original legislation in 1935 required a five year pay in to get a payout from age 65 until death, it actually was more generous than what we have now which requires a ten year pay in. Additionally Soc Sec originally only covered the worker, but quickly was amended to include a widow, and children, then a spouse. So now a single worker can collect his own benefit, his spouse can collect 50% of his benefit, and as many ex-wives of 10 years who do not remarry can also collect. All based on one worker's contribution. Also your FICA paid for disability coverage for all your working years and bought coverage for disability of your children. SSI coverage is income limited. Thus although the wealthy paid into the system, they are not eligible for the benefit.

Social Security is not a pension system, it is a program to provide several benefits to workers and their families throughout life and beyond and has always paid a proportionally greater benefit to the working poor, and that's a good thing.

[OrangeBlossomBaby]

Wondering why the depleted SS funding is not being restored to cover expected expenditures for the next 50 years?

With all the trillions of $$$ being given away and lots of new people being added to the qualified recipient list, it seems like a good time to invest a few billion $$$ in SS funding.

I dunno. Why are all the people who retired at age 65 and started collecting their monthly check back in the 1990's earning more than they put in now, in 2021? That means it was MY money they're taking in their check, since I didn't retire until this past December.

That's how it works though. I'll be getting checks that came out of your grandson's pay, and your kids will get SS checks that will come out of their neighbor's grandkids' pay.

Here's a little trivia: Ida May Fuller worked for only 3 years under the Social Security program, when it first was formalized in 1937. In 1940 she received her very first monthly check, for $22.54. She died in 1975 at the ripe old age of 100. During her lifetime, she collected $22,888.92 (that's almost twenty-three thousand dollars for those who have trouble seeing decimal points) in Social Security checks.

She paid IN a total of $22.75 (twenty-two dollars, seventy-five cents for decimal-impaired folks) in Social Security taxes during the 3 years she worked at the start of the program.

You get out MUCH more than you put in, as long as you don't earn too much in the first place. There is a cap on how much you can earn, even though you still have to pay into the system.

[davem4616]

it's a political football that will generate votes based on their campaign lies

[Bucco]

it's a political football that will generate votes based on their campaign lies

Not sure who “their” refers to, but in my experience, if people and parties stick to issues, not personal slander, the economic issues are relatively easier to discern positions.

Lots of spread sheet “nerds” will show the facts and then we can discern what we want.

My fear is that recently, the personal slander and accusations become the standard.

Heck we had one national party who just flat out refused to even present a platform.

[FG111]

Question and I hope my message is not deleted once again by the message board police, but if I wait until my full retirement age and start collecting social security, am I able to collect my full monthly social security benefits of $3113 (current maximum amount for single ) and still collect my own monthly retirement of approximately $35,000 in pensions, investments, annuities, royalties for a yearly grand total of $450,000 for the rest of my life with a yearly cost of living increase?

I understand the answer is yes and this is one of the many reasons Social Security is so messed-up. People like myself should not be collecting Social Security and I hope someone in congress will have the intestinal fortitude to change how we as a society collect Social Security.

[Topspinmo]

Wondering why the depleted SS funding is not being restored to cover expected expenditures for the next 50 years?

With all the trillions of $$$ being given away and lots of new people being added to the qualified recipient list, it seems like a good time to invest a few billion $$$ in SS funding.

IMO Covid reduced future payouts along with Medicare projection down. Notice I didn’t say Medicaid or any of the entitlements. And for ones that says SS is entitlement? some of use actually earned it working 40 to 50 years by paycheck deductions. In my case I’ll have to live to about 79 to get my deductions to break even.

[Topspinmo]

Question and I hope my message is not deleted once again by the message board police, but if I wait until my full retirement age and start collecting social security, am I able to collect my full monthly social security benefits of $3113 (current maximum amount for single ) and still collect my own monthly retirement of approximately $35,000 in pensions, investments, annuities, royalties for a yearly grand total of $450,000 for the rest of my life with a yearly cost of living increase?

I understand the answer is yes and this is one of the many reasons Social Security is so messed-up. People like myself should not be collecting Social Security and I hope someone in congress will have the intestinal fortitude to change how we as a society collect Social Security.

You don’t have to collect it if you’re so well off. It not mandatory. for some of use we worked at meaningless jobs surviving, scraping, and saving for 50 years to be able to retire. Obeyed laws, not getting DWIs, divorces, on drugs, or any other career wreaking habits.

[Topspinmo]

Economics, REALITY. If, any company ran it's accounting as our government does, we the people would scream and demand they investigate and close down that business.

Social security. They and we the people allowed, demanded it get out of hand. I recall reading when FDR created, allowed the plan to be created, there were 14 plus people paying in for everyone collecting. Today, the number is 2.5. To make it worse, prescription coverage has been added, funding for national health care has been added.
With no additional tax to cover it.

The choice, cut back what is paying out. Wait! I paid in for 45 years. What do you mean you spent my money to buy our parent's votes? Increase taxes on young people? Wait
we want to tax them into poverty they will scream. What we are doing. We are increasing the deficit. A battle cry of the American Revolution-No taxation without representation. We are taxing people that have not even been born yet.

We the people are guilty but blame others. It is glorious to spend more, pay out more.
Paying old debts. There is no glory in that, till after it explodes and there is no other choice.


No we the people are not. It career politicians that create laws and projection bean counters’ that can’t count. We The people however are responsible for voting in career politicians decade after decade with same poor results.

[Topspinmo]

I'm not sure what you are asking. All Federal programs are funded with borrowed money because there is a national debt. You can pretend that there is a Social Security "trust" fund, but it really doesn't exist.

Yes, borrowed from taxpayer.

[FG111]

You don’t have to collect it if you’re so well off. It not mandatory. for some of use we worked at meaningless jobs surviving, scraping, and saving for 50 years to be able to retire. Obeyed laws, not getting DWIs, divorces, on drugs, or any other career wreaking habits.

Hello Sir-
I apologize if you misunderstood my response, but my point is that Social Security needs to be "fixed" in order that the next generation will also benefit from Social Security. Since "fixing" means higher contribution rates and lower pay-out benefits, no politician is going to risk his ass in order to fix Social Security.

[JoelJohnson]

In 2006 congress passed a law that made the post office PRE PAY 75 years of their retirement account within 10 years, which is why they claim the post office is losing money.

Maybe they should pass a law that they prefund SS for the next 100 years!