From Sept. 10 2008 to March 10 2010 Bernanke raise our monetary base 2.5 % from 850 BILLION to 2.1 Trillion IN 18 MONTHS What this means anything that cost $1.00 in 2008 will cost 2.50 now or when ever the hyper inflation catches up to us. So being there was no cost of living increase this year and none planned for next year, the money S.S. RECIPIENTS receive will not buy them what they have been buying and most of them are below poverty level now. Germany was printing monopoly money just like Benanke does now back in the 20's. Here is the result. A 500,000 Mark note that would buy a house in 1921, would not buy a loaf of bread in 1929. Soin fact we are comparing apple to oranges here because each time Benanke fires p the presses the value of the dollar you have in you wallet decreases. Don't worry about S.S., WORRY ABOUT ENSLAVEMENT TO THE COUNTRIES WE HAVE BORROWED MONEY FROM.
Recent studies show that over 50% of people in Generation X believe there will be no Social Security, and an even higher percentage of those who are younger have no faith in Social Security. So, what do you think will be the status of Social Security when you retire? Some project that the funds will be exhausted in as few as 15 years, others are more optimistic and think we can stay on our present course and not deplete the funds until 2040 or beyond.
Personally, I’m not betting on receiving any benefits. If I do, hey that’s great, but I wouldn’t be surprised if there was nothing there for me. At the same time, I do think that Social Security won’t just go away. It may not exist as we know it today, but there is more to Social Security than just receiving a monthly check once you reach retirement. Our Social Security taxes fund everything from retirement income benefits to disability and survivor benefits. I can’t imagine we would end up having no social welfare system at all, but I don’t think the amount of benefits paid out will resemble the current system.
I don’t have the answer, and I have no idea how the issue will eventually be addressed, but it would be interesting to hear how others feel about the system and what you expect out of it.
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About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.
I am very fearful of the social security status. My mother just recently retired (I will be 36 this year) and I see the difficulties she faces, not only in her ss benefits, but Medicare and the rising cost of living. It upsets me when we finance a war that has cost the US tax payers over $500 billion dollars. Now I don't want to make this into a political argument, I'm simply saying, we are spending over 8 billion dollars a MONTH on this war. Lets take a month or two and replenish (or kick start) the social security program. Lets put the money back into our country and the people. Now of course we need to do this without jeopardizing our troops. Here's a thought, lets bring them home and start reversing this huge expense that we should have never have started in the first place.
You have got to be kidding. Save? I can barely make it on my salary. My 401 is getting killed. My contributions are barely keeping up with my losses. Forget the social security folly, the question must be how much of my 401 k will be there? The damage has alredy been done years ago.
A crumbling economic foundation including rising healthcare costs, housing costs and negative real middle class salary growth has been ignored over the past 30 years by all administrations. Why? Reform would hurt the masses. Basic law of society, "why risk all to save a few" has applied.
Gen X, we are on our own.
Re: "those who fail to plan for retirement."
I earn minimum wage and started out with student loan debt, and I still have student loan debt.
How much do you realistically expect me to save and invest for retirement?
When I was younger (teens and 20's), I would have said there would be *no* SS when I retired. Now that I’m in my 30's, I say there will be some - just nowhere near enough to maintain my lifestyle.
We need more MoneyNing's, and full-blown immigrants, to fund future Social Security obligations. Open the gates; they'll work a lot harder than the rest of us day-blogging slackers. ;-)
Here is an informative piece by Shiller from a couple of years ago:
It specifically analyzes Bush's proposal for private accounts to fix Social Security, but also gives a more general background about what it is exactly that is wrong with the present system.
Completely ending Social Security would be political suicide. Any attempt would require control of the presidency and Congress with 60 votes in the Senate, or supermajorities in both legislative houses, and the willingness of at least 280 politicians to find new careers when their terms expire.
But there's no way the status quo can last without massive tax increases--which may happen in any case. My guess/hope is that we'll eventually shift away from the current Ponzi scheme to government-sponsored private savings accounts, or a hybrid of the two, similar to what the Bush administration proposed last year.
That being said, political inertia is bipartisan; almost nothing has changed in 20 years, so it's possible nothing will have changed in the 40 years (I'm 27) until I retire. So although I expect Social Security or some variant to be around, I'm saving and investing like it won't.
I'm a Canadian citizen working in the states but I'm helping pay for social security. I don't even know if I will get any benefits even if the whole system is working great. I just hope that I can somehow recoup some of the money I have put into the system but realistically I do not think I will get any.
Current benefits are paid from current taxes, that is correct. And for now, revenues exceed payouts. The problem is that we are transitioning into a time where there are going to be a very large jump in social security payments that need to be made while at the same time a lot of new revenue is going to stop coming in.
People are having fewer children, and the boomers are a huge group of people who have been paying into Social security for decades, and suddenly their SS revenue will cease while they also need to begin to collect. There aren't enough people in our generation and beyond to sustain that forever. Sure, it may last another 30+ years, but eventually there will be more going out than coming in, and something about the system will have to change.
At worst, they say that benefits could be paid for at 75% of mandated levels based on current tax levels and retirement estimates.
David, you say that like it's a good thing. Oh, we'll just reduce benefits by another 25% and everything will be fine. The Social Security tax rate has already been increased 665% since inception. The contribution base has been increased 125% OVER INFLATION since inception. And the reform of 1983 reduced benefits by raising the retirement age!
When will the bleeding stop? I'm already guaranteed a negative rate of return on my FICA dollars. You're saying I should be greatful for a 75% reduction, pushing my return even further negative? This nonsense has got to stop. Social Security is a total ripoff. The only people it benefits are the politicans who use it to literally scare up votes.
I have to criticize Jeremy for parroting the SS is doomed mantra on a site supposed to be devoted to sound financial information.
Jeremy, why are you posting on here about Social Security if you don't realize it's paid for by SS taxes rather than the trust fund?
Do you expect the tax to go away, to be called something else and the money sent elsewhere? What?
Just being pessimistic?
There's a delicious irony in having a post about Social Security immediately following a post about whole vs. term life insurance. Social Security, as it currently stands, is kind of like whole life insurance. As you pay in to it, you accrue value, which is eventually paid out in annuity payments. If Social Security is altered to be means-tested, it will become more like term life insurance. Your "policy" has no value and you only collect if you need it (meaning you have no means).
I would love to see Social Security become means-tested but only if it translates to a drastic reduction in taxes. Unfortunately, I don't see that happening. It's just not the government's way.
SS benefits aren't paid out of the trust fund anyway, they are paid for out of current SS taxes, that 6% you pay from your paychecks. At worst, they say that benefits could be paid for at 75% of mandated levels based on current tax levels and retirement estimates.
The fear is based on ignorance and that fear, fellow X'ers and ignorance is the opening for the politicians to take away your SS benefits when they are entirely affordable.
We need to brainwash today's children and teenagers into funding our retirement. I suggest plenty of emotional blackmail as a good start.
I've always saved under the assumption that I won't get a darn thing from SS. If I turn out to be wrong, it'll be a pleasant surprise.
Although all web-based polls are biased due to self-selection, I would suggust that you leave off your opinion until after you gather some/most of the polling data. Describing your belief first has most likely acted as a strong suggustion for others to vote that way.
Just a thought.
I voted that it would vanish and I would not get a cent.
If you can make a 2 question poll, then adding the age question (just clump the answers for certain age ranges) as mentioned above is a good idea.
@Webomatica: I understand the feeling of not wanting to put into a fund that won't pay you back. On the other hand, here's my take: I see it as paying the retirement of folks who were paid very little to put together the support and infrastructure that we currently enjoy - folks who built the roads, provided firefighter support, swept the streets, etc, yet were paid penury wages. With that in mind, I doesn't bother me so much. Definitely YMMV, tho!
The related issue that kind of bugs me is how currently, all us younger folks are having SS taken out of our paychecks that we may or may not receive when we retire.
It's one thing to say well, social security may not exist in the future so plan ahead, but another to realize that the money being taken away from us in the present is really just going to fund those who are currently retired because the government doesn't actually keep the money in savings.
So what I mean by mentioning this is, perhaps there should be a method for people to "opt out" of social security. I'm not saying I would do it, but if someone doesn't expect there to be any social security for them in the future perhaps they'd like to get the money they're currently putting into the system given to them now so they can fund retirement in another manner.
Just a thought - I'm enjoying reading this blog.
Good point, Brian. I guess that would have made sense, as you said, depending on your age you may very well be receiving all of your benefits if you are close to retirement.
ciwood, you bring up a good point. Social Security was never meant to be someone's sole source of retirement income. It is a welfare system, and should be a last resort if there are no other funds available. Unfortunately, it has become something everyone expects to receive.
I think a means tested method is the way to go, unfortunately, getting to that point could be a long and bumpy road.
Social security will always be there for those who fail to plan for retirement. I teach financial planning at a college and assure my students that they will be taken care of in their old age either by their own investments or by their government. Future Social Security Benefits will be means tested and available for financial failures. Your task, if you choose to accept it, is to save and invest so that you will NOT be eligible for Social Security. That way, you get to live the way you choose, not the way a government check forces you to live--at a welfare level.
The only thing I would have added to the poll would be some type of age qualifier (not sure how to incorporate). Young readers will probably answer "don't expect anything" while older readers may select the "full benefits" option.
In any case, I like these polls you are doing. Very interesting.