Social Security trust fund to run dry in 2033

[Dakota731]

In their annual report, the trustees who oversee Social Security’s two trust funds said reserves for the fund that pays disability benefits would be exhausted by 2016. Combined with the fund that pays benefits to retirees, all Social Security reserves would be exhausted by 2033.

Wall Street Journal

We do have a 401k, but it still makes me sick to think that we may never see the thousands of dollars that we paid into this account. I wish we would have had the option to invest it ourselves instead of letting the government "take care" of our money.

 

[okeydokey]

Most of the money paid out to those on social security come from payroll taxes. Those will continue to be collected and paid to out to recipients of social security. You are making it sound like the entire program will end in 2033, which it will not.

 

[TwoMisfits]

Anyone Gen X or later (and even most Boomers) will be faced with the unpleasant realization that they will have paid in much more to Social Security than they will ever receive (as a whole group). It is a situation that will only get worse as the program continues. So, anyone paying Social Security today should look at it as a straight extra tax - anything you may receive later (and yes, you will get some trickle even if the fund is dry b/c there will be payroll taxes taken in every year) will be a bonus to you. I would not count on it to be anywhere near sufficient to live a lower middle class retirement.

 

[ICF]

any $'s I get from there when I'm retired will be a bonus....it's sure not my expectation that it will fund my retirement.

 

[eliza61]

any $'s I get from there when I'm retired will be a bonus....it's sure not my expectation that it will fund my retirement.

Which is exactly what the program was intended, actually it was supposed to be a safety net for the poor. It was never designed for people to retire on.

 

[dex08]

any $'s I get from there when I'm retired will be a bonus....it's sure not my expectation that it will fund my retirement.

Ditto! I'm so grateful that I was smart enough to start contributing to my former employer's 401K plan when I was 20 yrs old and have rolled it over. Plus with my 401K at my current employer and my pension, I know I'll be more than set for retirement. We have not calculated social security benefits into our financial plan for retirement at all.

 

[TheRustyScupper]

1) Alas, people have yet to fully realize that Social Security is truly a PONZI SCHEME.
. . . payments to retirees do not come from their own Soc Sec taxes
. . . Soc Sec payments to retirees/disabled are paid by those still working
. . . so what is collected from one is paid to another
. . . there never has been an investment of one's Soc Sec taxes into their own account
2) The so-called Trust Fund does not really exist as an entity.
. . . no one can point to an account and show actual cash balances for Soc Sec
. . . no one can see a savings account from which Soc Sec is paid
3) Congress has used the funds as part of the general budget for years.
4) When used, the money is backed by an IOU.
5) And, of course, the IOU's are paid from current Soc Sec taxes.
6) When the Soc Sec taxes aren't enough, the General Fund must make up the difference.
7) In other words, taxes for normal government expenses will be siphoned to retirees.
8) Then, the generational wars begin - - -
. . . will younger workers want their Soc Sec taxes AND regular taxes paying retirees?
. . . how can we manage/fund the huge national debt AND extra Soc Sec payments?
. . . how will those who haven't saved for retirement live on reduced Soc Sec payments?

NOTE: I am just so pleased that we provided for our current retirement not counting upon Soc Sec.

 

[MillauFr]

Which is exactly what the program was intended, actually it was supposed to be a safety net for the poor. It was never designed for people to retire on.

Ditto. It is simply another entitlement program designed to help out the poor.

 

[ziravan]

Wall Street Journal

We do have a 401k, but it still makes me sick to think that we may never see the thousands of dollars that we paid into this account. I wish we would have had the option to invest it ourselves instead of letting the government "take care" of our money.

There is no trust fund. The gov't borrowed all that money and doesn't have it to put back. RIGHT NOW, SS and Medicare are more than 1 Trillion/yr and more than a fourth of a 3.6 TR budget. That's without the government adding payback of the trust fund to that total. If the gov't actually paid back those dollars, it would so impinge on other spending that the Fed would have no choice but to wildly print dollars (more so than now). The inflationary avalanche that will set off will not only degrade the value of SS, but of every other retirement dollar as well.

The reality is that SS will have to be seriously limited. The only three ways to do so that could have a real effect are 1. Huge tax increase, 2. Increase retirement age drastically (72), or 3. Means tests.

You are citing a report from the SS trustees. If you read the reports, they have been screaming my last paragraph for over a decade.

 

[tvguy]

Wall Street Journal

We do have a 401k, but it still makes me sick to think that we may never see the thousands of dollars that we paid into this account. I wish we would have had the option to invest it ourselves instead of letting the government "take care" of our money.

I'll be 76 then, and hope to be around still drawing money.

When I look at my estimated benefit and what I paid it, it really doesn't take very many years to get your money back.

 

[Planogirl]

Actually if you read the long pamphlet released at the time when Social Security was implemented, it was meant to be both an aid to the poor and a guaranteed insurance for all workers. It was created back during an economic time when it was virtually impossible to save though and of course people needed something to fall back on.

I hate to think of all the people who will be relying on social security. I hope that they're made very aware that things could change drastically. They still have time.

 

[ziravan]

Actually if you read the long pamphlet released at the time when Social Security was implemented, it was meant to be both an aid to the poor and a guaranteed insurance for all workers. It was created back during an economic time when it was virtually impossible to save though and of course people needed something to fall back on.

I hate to think of all the people who will be relying on social security. I hope that they're made very aware that things could change drastically. They still have time.

When SS was created, there were something like 15 workers per recipient. That was sustainable.

Now, it's 3:1, well on its way to 2:1. That's not sustainable.

 

[Tinkerdreams]

Years ago, when I started working, they were talking about this subject and how it would be handled. Knowing that the amount of retirees vs. those working would be skewed in the negative, they spoke of the dispersment of SS to a retirement eligible person by a "means test".

Basically, they would look at all assests, savings, 401K, etc and determine how much, if anything, a person would receive for their retirement. So basically, those who planned get little and those who didn't would receive a greater share.

The scary thing is that I hear many people say they have saved very little and will be working for many years to come.

 

[manning]

Yes, the government borrows (raids) the social security trust fund for other purposes. I have seen reports that if this was stopped you would see what the true deficit is.

Talk about raiding, guess what they are doing with the highway trust fund.

Aren't we easily fooled.

 

[Planogirl]

When SS was created, there were something like 15 workers per recipient. That was sustainable.

Now, it's 3:1, well on its way to 2:1. That's not sustainable.

I'm making no claims that it's sustainable. Just pointing out the original intent included more than the poor and disabled. Intent is nice but doesn't provide funding.

 

[eliza61]

Yes, the government borrows (raids) the social security trust fund for other purposes. I have seen reports that if this was stopped you would see what the true deficit is.

Talk about raiding, guess what they are doing with the highway trust fund.

Aren't we easily fooled.

Fooled about what?

This problem has existed for the last 20 years at least, who was fooled?

Everyone in this country has huge entitlement issues so nothing gets done.

Seniors are a huge group and getting bigger and they are not about to let anyone in congress mess with their ss.
No one wants more taxes.
As much as we like to pretend, poor folks are not going away and in some fashion will cost society.

Rich blame the folks on welfare.
Poor folks blame the 1%
Unemployed blame illegal immigrants
Poor workers blame the big corporation.

I saw a speech from Jimmy Carter about the broken ss system.

No one is fooled, no one also wants "their life" to be negatively impacted.

 

[Flamingeaux]

I saw a speech from Jimmy Carter about the broken ss system.

This was the only time Carter had something right.

 

[trinchick]

With regards to means testing... All of us patting ourselves on the back for being so clever to save and not need SS in retirement are the big losers in having paid into the system for our entire careers only to receive less of our money than our less careful peers.

Personally I am more of an ant than a grasshopper, but it may actually pay off to sing in the summer in this instance.

 

[Forum Jumper]

The Baby Boomers will come and go. Their (larger) draw won't last forever. What will SS Retirement be after they are gone? Better? Worse?

 

[North of Mouse]

Really get tired hearing this same old story - I don't believe it at all.