The reality is that there are solutions to our Social Security program, but no politician would ever dare to suggest them because they only care about staying in office. There is no doubt that taxes will go up in the next 5-7 years to address the shortfall…for the same reason.
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The reality is, is that there is way too much special interest money involved in our current political system.
There oughta be a law.
Congress has stolen $2.9 TRILLION from the Social Security Trust Fund for their pet projects. We need to cut off the salary, benefits and pension of everyone in Congress until the $2.9 Trillion is paid back. If it is not paid back within 1 year then no one in Congress can ever run for elected office again. I bet they would figure out how to pay it back then. Source: How Much Money Has Congress Taken From Social Security
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I am a CPA and believe retirees should only wait until 70 to collect Social Security if that income is a substantial amount of retirement income. If you really need it to live on, work longer and secure a larger Social Security check when you need it most. The earlier you take Social Security the greater the chances are you will recover your investment. If you wait until 70 and die at 75, you have left money on the table.
Your statement/supposition is wrong.
It is a reasonable statement for the so called average person, but does not take into account widow/widower or other less common scenarios where that would be a loss of many thousands of dollars.
Yes, social secutity will run out of money unless Congress addresses the issues. Which they have not. Conventional wisdom says they will, but probably at the last minute. My life experience says don’t trust the conventional wisdom…they may kick the can down the road too many times to salvage it. Or they may decide not to preserve promised benefits. In today’s Congress, that last sentence may be scarily true… They can’t even manage to keep the country open and functioning!
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I think the breakeven age is somewhere around 81 where your total distributions from SS would equal if you took starting at 62 vs 70. This does not include any returns that you made on your distributions.
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Social Security fails for the same reason Pensions fail. Its a completely flawed model. Of course Congress will wait until the last minute so that they can increase taxes while claiming they had no choice. No one in Congress really wants to fix the problem…
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Most of us are living on less than $1800 a month, a reduction to 75% of current amounts is a disgrace and poverty level. Funds I had saved in a retirement account were lost during the last recession in 2008. And there was not enough time to recover before retirement. A bill is already being presented by the Democratic Party but Republicans will not vote on —it they say they don’t like it that it raises taxes, but what they don’t say is that those taxes are on individuals earning over $400,000 a year. And yet, Republicans only meet behind closed doors and offer no alternative. When asked by members of AARP, if we should expect something soon from Republicans, the answer was not within the next two years.
We are expected to lose these funds in 2034. This is the time to act to shore up our retirement. We need to yell, get it done!
Show us in a bill where that amount is stipulated.
Are there enough people with incomes above 400K to fix the mess that SS is in?
Bill Larson again presented the Social Security 2100 Act in 2021. It “includes a host of provisions aimed at increasing benefits while adding more revenue through additional taxes on the wealthy.
Notably, the bill would not include ideas like raising the retirement age, which Larson and other advocates oppose.
It would provide a benefit increase for new and current beneficiaries amounting to about 2% of the average benefit.
To pay for those changes, the legislation calls for increasing Social Security taxes paid by higher-wage earners. In 2021, those taxes are capped at $142,800 in wages, and in 2022 that will rise to $147,000. This proposal reapplies taxes on wages at $400,000 and up.”
No, its not a “final fix” However, our legislators can take a look at it, revise it, revamp it, or add to it, but that dream remains to be seen since nothing gets done! I can only hope…
Not so easy if employers let go of or won’t hire older workers. Older people don’t always have the choice to work.
Yes, I did that calculation myself, and it was right around 80-81 years old.
My friend and her husband started collecting at 62 (they don’t need the $$). I think their reasoning is that they don’t expect to live really long…??
I’m going to hold off on collecting – I live OK now, not nearly the income they have, but it’s fine.
To each their own, I guess.
A simple solution to the Social Security problem is to have Congress raise the cap on taxation of income, which is now $168,000 per year.
Thanks for your useful information.
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Huh? Not sure what you mean here, and check your spelling.
Its over $165,000 now. I’m sure it can go higher, after all those below pay into SS on 100% of their income. A millionaire making $1,650,000 only pays on the first 10%.
The “simple” solution for all of our ridiculous entitlement programs and irresponsible spending seems to always be to tax the successful people. The SS program is a Ponzi scheme and is following the natural progression in which you eventually run out of other people’s money. It needs to be completely overhauled, but no one is going to do that. Heck, no one is going to touch the problem until the year before we can’t fund 100% of benefits. That’s the way the US political system works…
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The solution isn’t that difficult. Remove the cap on earned income subject to FICA tax so that the wealthy pay the same percentage as the rest of us. That preserves Social Security for another generation. We can also (don’t all jump on me at once) increase immigration so that our labor participation rate goes up. Another solution would be to increase the interest rate the government pays the Trust Fund to loan money to the general fund. If we make it the equivalent of I-Bonds it keeps up with inflation.
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