The future of Social Security is based on economic forecast for the entire nation projected over several decades. Anyone really put a lot of stock in that?? Seriously? Social Security was predicted in 2009 to be solvent till 2039. 13 years ago in 1997 they thought it would only last till 2029. So in 13 years the prediction moved forward 10 years. And thats even including the recent horrible recession. Hmmm. In another 13 years will it move forward another 10 years?

Even if nothing is changed and the prediction is accurate it will still be able to pay about 70% or so of current benefit levels with no increases in taxes or change in retirement age.

If they make a couple tweaks to the system (increase tax / increase retirement age) then social security will be solvent indefinitely. Of course that will eventually change 50 or 100 years from now.

This isn’t unprecedented either. They raised SS tax rates 10-20 times over the decades. It was in imminent jeopardy of bankruptcy in the early 80’s and they averted disaster then.

The SS-trust fund is owe’d $3 trillion by the federal government / all tax-payers.

Social-Security, if looked at in isolation, is actually solvent for another 30-40 years. It has collected a surplus of taxes since its inception and has a $3 trillion war-chest of excess funds — so no drastic changes to social security really need to be made (at least for 30-40 years).

But we all know that the fed can’t pay back the $3 trillion, so who are we going to screw? If we reduce benefits for SS, then retirees are screwed royally. They paid the tax, and an overly excessive amount on top of that (the surpluses), just to have their benefits crushed.

These are the types of games you must play when we’ve gone so long without a balanced budget. Back in the 90’s we had a PAY-GO policy that required the budget to be flat (no new spending without a cut somewhere else, or an increase in taxes to pay for the new spending).

To fix this mess, we need to:

Step #1: stop the bleeding by reinstating PAY-GO.

Step #2: figure out how to pay the massive federal debt off (including the IOUs to the SS-trust fund). Either by reducing spending (and keeping taxes the same), or increase taxes drastically.

But we can’t even do Step #1, with the previous administration or under the new one. Something is going to blow if this problem is not addressed.

Politics aside, we need to change the system by either putting more money in (higher taxes, oh joy) or taking less money out (higher retirement age, lower benefits, etc.).

Unless, of course, someone comes up with a brilliant idea…and there are already many out there.

The federal government can’t pay for it’s current spending, let alone an increasing cost for SSA benefits. Now that SSA is getting to the point of spending more in benefits than they are collecting in SSA payroll taxes, the Federal Deficit is going to grow exponentially.

The only hope here is for the federal government to drastically cut spending AND increase income taxes. For the ‘conservatives’ that fight tax increases — all you are doing is pushing YOUR problem to a younger generation. For the ‘liberals’ who refuse to cut spending — you are the other side to the same coin.

Both spending must decrease, and taxes must increase — no other way around it.

OK mini-rant over

If you are a 76%’er like myself, get on with saving and prepare like the SSA will vaporize. If you get a reduced benefit, at age 80. Then lucky you!

Else take pride in you funded your own retirement through: savings, employer sponsored plans, and investments (R/E, etc..).