October 16, 2013

5 facts about Social Security

SocialSecurity1As negotiations continue between Congress and the White House on resolving the fiscal impasse that has shut down large swaths of the federal government and threatens a default on U.S. government debt, some are hoping for an eventual “grand bargain” that would also overhaul the tax code and reform so-called “entitlement” programs such as Social Security and Medicare.

As far as Social Security is concerned, convincing the public to accept — or even consider — significant cuts could be difficult. Social Security remains one of the most popular federal programs: In a Pew Research Center survey from February, in fact, 41% of Americans said spending on Social Security should be increased, with just 10% saying it should be cut. While Republicans are more likely than Democrats to support cutting Social Security, that’s still a decidedly minority position: 35% of Republicans said Social Security funding should be increased, compared with 17% saying it should be decreased.

Despite its popularity, there’s often considerable confusion on just how Social Security works. After our recent Fact Tank post “5 facts about the national debt,” several readers asked for a similar primer on Social Security. Who are we to say no?

1 Social Security touches more people than just about any other federal program. As of the end of 2012, some 57 million Americans were receiving retirement, disability or survivors’ benefits from the system, at a cost of about $786 billion; 161 million people paid payroll taxes into the system.

2 At its root Social Security is, and always has been, an inter-generational transfer of wealth. The taxes paid by today’s workers and their employers don’t  go into a dedicated individual account, nor do Social Security checks represent a return on invested capital. (Although you might be forgiven for thinking so, since the “personalized Social Security statements” that used to be mailed out once a year and now are available online detail your payment history and projected monthly benefits.) Rather, the benefits received by today’s retirees are funded by the taxes paid by today’s workers; when those workers retire, their benefits will be paid for by the next generation of workers’ taxes (caveat: see Point 3). Your benefit amount is based on your earnings history and age at retirement, not on how much you and your employer paid in Social Security taxes (although taxes paid are, for most people, closely tied to their earnings.)

3 For much of its history, Social Security was a strictly pay-as-you-go system, with current tax receipts funding current benefits. That changed in 1983, when Congress (as part of a comprehensive overhaul of the program) raised the payroll taxes that provide the bulk of Social Security’s revenue, to build up a cushion for the coming onslaught of Baby-Boomer retirees. For nearly three decades, the system took in far more revenue than it paid out in benefits; the surplus was invested in special non-tradable Treasury bonds, with interest credited to the system’s two trust funds (one for old-age and survivors’ benefits, the other for disability payments). As of Sept. 30, the trust funds together held more than $2.8 trillion in Treasuries. (Some people characterize that as the government “borrowing from” or “raiding” Social Security, but the system is in essentially the same position as any other investor who buys Treasuries.)

4 However, since 2010 Social Security’s cash expenses have exceeded its cash receipts; negative cash flow last year was about $55 billion, according to the latest report from the system’s trustees. While credited interest is still more than enough to cover the deficit, that will only be true until 2020. After that, Social Security will begin redeeming its hoard of Treasuries for cash to continue paying benefits — as was the plan all along.

Social Security5 Social Security’s reserves will be fully depleted by 2033, according to the trustees’ report. (The Congressional Budget Office, in a separate report that uses somewhat different demographic assumptions, puts the date at 2031.) After that, while the system will still be receiving tax revenue, it will only be enough to pay about three-quarters of scheduled benefits — unless Congress changes the benefit formulas, raises the payroll tax, or makes other changes such as raising the cap on taxable wage income (currently $113,700).

Category: 5 Facts

Topics: Government Spending and the Deficit

  1. Photo of Drew DeSilver

    is a senior writer at Pew Research Center.

Leave a Comment

Or

All comments must follow the Pew Research comment policy and will be moderated before posting.

98 Comments

  1. Harriette Holder3 weeks ago

    Dear Mr. DeSilver, I’ve read the report and just to let you know, I’m 79 years old and have a good memory of how Social Security was to work. It was never intended to be a “slush fund” for the federal government to raid when it needed money to support social programs to benefit those who never paid into it or who weren’t even legal citizens. What is the solution to the specter of running out of funds in 2031? Cut out spending! Go back to the original intent of Social Security. The solution I feel will hasten this situation is to force government employees (current politicians and retired ones) to merge their “account” with Social Security. After all, we are all supposed to be in the “same boat” – USA citizens.

    Reply
  2. Wayne3 weeks ago

    Two Questions:

    1 – How many people on SS actually PAID the SS tax ?

    2 – If those that did NOT pay into SS were removed and the top end tax amount was removed so as long as you work you pay the SS tax rate would the SS fund survive ?
    Wayne

    Reply
  3. Bruce Porter4 weeks ago

    So in effect the US government has created it’s own Ponzi scheme since 1983. It would be interesting to separate true SS (those that paid in) from the disability payments and see if it could support itself. I have suspicion the disability payments have caused the negative impact on the program.

    Reply
    1. Acadium2 weeks ago

      Yes. Welcome to 21st Century Fleecing Of The American Middle Class by the RICH AND POWERFUL.

      If SS isn’t there when I retire after paying in at a substantial rate for almost 50 years I will go off the deep end.

      Reply
  4. Asa Ferguson1 month ago

    How many people recive S.S. checks each mounth who never paid into fund?
    How many disabilities are paid out to people who didn’t pay into the fund?
    Why is the real reason we are running out of money?
    What Gender collects the most S.S. ?

    Reply
  5. steven Barone1 month ago

    I would say that the OHP insurance company and Medicate or medicare or congress should pay for people to wear hearing aids and for the congress to pay for people with learning disabilities or all types of disabilities for braces to be worn on their teeth even for when people have TMJ stress to their jaw grinding their teeth. Even that braces cost 6,030. Come on Congressman grow up are you afraid of losing money of paying to everyone and have people pay more taxes are you kidden me. That is not good. Congressman get a grip out of it stop asking people to raise their taxes or asking them if it is good idea . I receive SSI live in Oregon in Eugene . Boo at Congressman or at SSI or the benefits. Give people a break Congressman please? stop forcing them to pay more taxes. You pay for all of us and please say yes to hearing aids or braces. I have a learning disability. Tired of people complaining at you congressman start helping out? Thank you and stop ignoring people?

    Reply
  6. Bob2 months ago

    A big thing on occasion has been the accounting that says – the average person “contributed” X amount of dollars to the system but will DRAW Y amount of dollars – generally shown as a much higher amount than what was contributed. What I want to know is this – if that money had been saved and earning interest (as it currently is in treasuries) and that interest rate (rate of return) were applied to the money that the average person “contributed” to the system, how much would they (and their employer) have actually “contributed”? For instance, if, for example, I had $200k taken from my pay over the course of my life (I think the average is actually higher) and the government had been saving that money and collecting interest on it during my working years, how much interest would I have built up – or, in other words, how much would I have saved with that interest? You guys might know the ACTUAL average amount and can do the math from there, but you get the idea…

    Reply
  7. Anglyn Hays2 months ago

    The Boomers have known all along that any social security benefits were dependent on the success of future generations. They choose, quite consciously, to NOT invest in future generations. However well the Millennials and their middle management elders Gen X can support the Boomers is exactly what they planned for. They never thought later groups would exceed their accomplishments and made that plain in all their published works. Why are they surprised that unless their personal wealth building scheme worked out, they would be leveled out where ever their inferior children ended up as the end times approached. The ideology of the Boomers did not include making a better world for their children, just for themselves as they enjoyed ridiculing those who came after as if they had no responsibility at all. If they must accept a lower standard of living in their senior years as a result, I see no way of preventing that.

    Reply
  8. Lily3 months ago

    I have always understood that the benefits I pay in go to the current generation that is collecting benefits/entitlements… what has been withheld in payroll taxes is NOT a personal savings/ trust account to be drawn on upon reaching eligible age to receive benefits (In my case 67).
    ….in other words, the taxes that I have paid are going to the Baby Boomer generation and the generation prior.

    I will not be eligible for benefits until 2030, so to you those of you who feel that you are “entitled”, I am pretty much kissing what I paid in to social security goodbye….this is a hard pill to swallow for the generations that follow the baby boomers.

    Frankly, seeing the incredible waste that takes place, and living with the knowledge that I most likely will never see benefits, I would have preferred to have put everything that has been deducted from my earnings into a PERSONAL trust account…I think that this would allow for far more personal oversight, and less waste…(do I really want to see my withholdings going to boomer’s greens fees, viagra, and their weekly weed?) ….seriously

    (I know this is not all baby boomers, but really I do feel that this the rule and not the
    exception)

    On a separate note, I just had a conversation with with someone who is in their 60’s, the remark to me goes as paraphrased… “I don’t care what happens to the generation that follows me, as long as I get my benefits, as long as I got to have a fun life…can’t the government just print more money?”….uckk, uckk, uckkk (this was a real conversation)
    what incredible hubris and ignorance.

    Reply
    1. mako2 months ago

      I can see why any young one will be annoyed. But you covered a lot of stuff in there.
      I will say that the attitude of today’s youth is different than the past. I doubt many of you will put in as many hours trying to give you every opportunity.

      Perhaps that’s a good thing. I sometimes thing the desire to outdo your parents is a slippery slope to disappointment. Much success is fortuitous, no matter how hard you work.

      Reply
  9. EP3 months ago

    When it comes to SSI we need to differentiate between retirement benefits and welfare. Do not take away retirement in fact it should be increased but ENOUGH of the free ride for all the people getting a free ride and never contributing.They get free housing, food, health and utilitiy bills subsidized. They are driving up apt costs because owners know the gov will pay the cost (meaning we the working and retired americans who pay taxes) Im sick and tired of the special interest groups taking more and more never putting into the system. Every group has been persecuted at some point in time and they all have the same opportunity to better themselves. These people have in our country now are committing crimes stealing SS numbers and just standing around with their hands open and we just throw money at them enough cut out ALL subsidies for the ddeadbeats. America is the worst our own citizens who have worked are the only ones we should be helping. Go to any emergency room and look who is in there the deadbeats why because they dont pay anything but of course I cant afford to go to the doctor so my taxes pay for them. Ridiculous!! Wake up America

    Reply
    1. steve3 months ago

      Who is “they” EP? You are lumping disabled people in with deadbeats and “people we have in our country now (who) are committing crimes…). No, every group has not had the same opportunity, and some whom are born with disabilities (whether mental or physical) never will. The majority of disabled people collecting benefits were born with, or have suffered, a loss that robs them of an opportunity to work or enjoy much of what life has to offer. You say you are sick and tired of everyone who didn’t “work” for their benefits taking your share of the pie, but most of “they” have indeed paid their dues, and are every bit as deserving as you. God forbid you should have a disabled child or relative who needs SS disability help. But I don’t know, maybe you would be willing to bear that burden of support for them, fund two retirements instead of one, while your fellow citizens wish you the best of luck.

      Reply
  10. Maggie4 months ago

    What happens to the money collected thru the years of people who died, and have no children, or spouse living to collect on their s/s.?I remember being told that the Fed taxes was for our retirement, for disability or for time of unemployment, but when times comes for anyone that’s has been paying their taxes since day 1 always a problem, but one that never paid a ¢ or worked a day in their life get it quick without long waiting or obstacle s. Why they make it hard to give back the money that was taken from every paycheck when is needed? isn’t it why they tell tax payers is there, for when is needed?

    Reply
  11. Pat9 months ago

    Why can’t we earn as much as we want when we keep working after age 66.

    Reply
  12. LARRY9 months ago

    IF S/S WAS A TRUST FUND HOW CAN THE GOV BORROW MONEY FROM IT I THOUGH TRUST LAWS FORBID THAT JUST A LITTLE SOBER THORT THERE HAS NOT BIN A REPUBLIC THAT LASTEDMORE THEN 250YRS WE ARE COMEING UP TO THAT IN A FEW YEARS.YOU CAN SEE US GOING DOWN HILL NOW WITH IMERGRATION & DEPT SO DONT CARE ABOUT S/S.I THINK WE WILL HAVE A REBELING IN THE STREETS.

    Reply
    1. Diane8 months ago

      They don’t “borrow” it, legally, it has to be loaned. Dumb right?

      Reply
  13. Fred Morgan10 months ago

    According to Forbes.. the entire “Trust Fund” was borrowed out and is in fact a fictional amount relying on the government to make good on it’s payments… This “FACT” seems to be ABSENT from your little fact list…????

    Reply
  14. Sam10 months ago

    How about the federal government start paying back all those IOU’S for trillions of dollars they called “borrowing”. Why should I have to take a cut on my 50 yrs of paying into the system because the feds don’t know how to manage money?

    Reply
    1. Sean7 months ago

      The federal government DOES pay back those IOU’s all the time. Nobody has ever had their SS direct deposit or check bounce. In fact, I have never seen a federal check bounce. You can redeem your IOU at the agreed upon date and there will be no problem

      Reply
      1. deb7 months ago

        That is a lie. If that were true, they would not be telling me that social security will not be available when I am of retirement age. They also do not say what happens to all the money collected from people who never reach the age of retirement and have no dependents or spouses that collect. I personally want my money, I have been working since the age of 15.

        Reply
    2. Keith5 months ago

      They also need to repay the interest on the principal they borrowed. Taking money out and simply putting it back years later does not address the lost opportunity of those funds to grow.

      Reply
  15. zotquix12 months ago

    Came here looking for facts about Social Security. Got fear mongering hatchet job.

    Reply
  16. Kevin1 year ago

    Just take the cap off and tax all income.

    Reply
    1. David1 year ago

      That’s a pretty crooked idea, because if your earnings are high when you retire, you don’t even get to collect, in spite of all the years you paid in. What you wants amounts to increasing the theft and doubling down on the only ponzi scheme that will put you in jail for not paying in.

      Reply
    2. Kathleen Taylor5 months ago

      There you go. It’s ridiculous that some CEO making millions a year is only paying into social security on a little over $113,000 dollars.

      Reply
      1. Mdep12xy1 month ago

        That CEO’s social security benefits will not go beyond earnings of $113K so why should he/she pay more if he/she won’t receive benefits beyond the cap?

        Reply
  17. Sherry Mckay1 year ago

    I would certainly like to know why social security is always referenced by the government as something they are giving away, I know countless people who paid in to there SS retirement fund that only lived 4 to 5 years after retirement, so with that said where did all of there money go, Our own government has robbed the SS coffers and has depleted them down to a little bit of nothing, , Our government is worried about keeping a triple A credit score with the world but it can’t afford to pay back all the IOU’S TO THE AMERICAN PEOPLE that they have stolen right out of the elders mouth, I have seen old people at the store buying cat food bread n milk, makes me wonder if that’s what they are eating.

    Reply
    1. corey doughty1 year ago

      because some people who get ss is because they dont get enough income and cant do much on there on

      Reply
    2. Barbara6 days ago

      i think the point he was trying to make was there are so many drawing for disability that should not be drawing. There are many that have handicaps that are deserving of the benefits.
      I know people collecting that the government disability checks that needs smart phone instead of taking the government free phone. And they l have a BIG SCREEN TV! Long before I could afford one. And I worked for a living. As a woman my pay check was a lot less than any Mans would be for sure but I worked just as hard if not harder in many instnces. Women don’t get. Fair shake here either.

      Reply
  18. Almost2 years ago

    I’m sorry but your transfer of wealth idea is incorrect. Social Security was never intended to be a transfer of wealth. The only reason tax dollars are currently refilling the Social Security fund is because the government decided they could borrow funds from it to pay for other things. They’ve been taking money out and leaving IOU’s, which when forced to, they repay using the income they generate from taxes. It’s no different than those taxes repaying any other loans our government has. When we pay China or Japan what we owe them, we are not supporting their governments with our taxes, and neither are we supporting Social Security recipients. They paid their entire lives into a government sponsored pension plan and receiving their own money back as they were promised is not an entitlement program or a transfer of wealth.

    Reply
    1. Dick Rasmussen2 years ago

      Very difficult to get the cattle back in the corral after they’ve been turned loose.
      Doesn’t matter how you explain it. There’s gonna be less as the population ages. Going from 5 or 6 workers per retiree to 3 and less per retiree is pretty straight forward arithmetic !

      Reply
      1. Paul10 months ago

        Dick, you seemed to not understand the following passage from Mr DeSilver’s piece:
        For much of its history, Social Security was a strictly pay-as-you-go system, with current tax receipts funding current benefits. That changed in 1983, when Congress (as part of a comprehensive overhaul of the program) raised the payroll taxes that provide the bulk of Social Security’s revenue, to build up a cushion for the coming onslaught of Baby-Boomer retirees.

        Reply
    2. David1 year ago

      Social security began paying out benefits to people who hadn’t paid in the year it was enacted. That’s money from one generation to the previous. It has never given back money that was paid in to the same generation.

      Reply
      1. Paul10 months ago

        I do not understand your statement. Are you criticizing Social Security payments, or justifying them?

        Reply
    3. Sean7 months ago

      You have no clue what you are talking about, It is the same as taking a401K loan. If you borrow say $10k from your 401k, it is paid back BY YOU, with interest. It still is your own money. It takes more from your income and puts more into your 401K

      Reply
    4. deb7 months ago

      so true!!!

      Reply
  19. Greg M2 years ago

    Take the cap off and increase the payroll tax by .25% and the problem is solved for the foreseeable future. Your benefits are figured on your work history and money contributed so benefits would increase accordingly. As far as raising the retirement age, having been a keg ,(168lbs.), driver for Budweiser, you do not do that physical of a job until age 67! There are many physical jobs that wear your body out before retirement age. Dismantle the culture in WA. DC so congress receives the same pay and benefits as the congressional districts they represent.

    Reply
    1. deb7 months ago

      I agree!

      Reply
  20. James allen2 years ago

    SS benefits is a very wrong name for SS disbursements. I paid (involuntarily) into the SS fund for ~60 years.

    If I withdraw fund from my bank savings account…is that a benefit ??? DUH

    Reply
    1. ann6 months ago

      yeah, you are so right.
      Also, what accounting firms advised Administrations to ‘borrow” from the ss fund when any simpleton can figure out ‘boomer’ meant UNUSUALLY high birth rates, but computers were predicted since the 70’s to eliminate jobs??
      Now Obummer is flooding our country with people due ‘entitlements’ who never contributed into the ss system and cannot speak English for employment! But they get food, housing free medical now doled out by **OUR** kids who we slaved for to send to college now picking fruit or bad job, cannot buy a home until college loans are paid off??
      Huh?

      Reply
  21. Phil Bogdonoff2 years ago

    Privatization of SS certainly may not guarantee successful returns.

    The debacle of Wall Street in 2008 is an indication of what could happen.

    They are NOT to be trusted. The US government with its regulatory powers is the best

    guarantor. Enforcement of those powers must be the key.

    Reply
    1. Colyn9 months ago

      False dichotomy.

      Reply
  22. Dan2 years ago

    The most contentious point on SS is whether you have “earned” it through past contributions. In our area, AARP has begun running ads about the way to fix America is by making sure we don’t “gut” SS. They then say retirees have “earned” the benefits. Talk about convoluted thinking.

    It is my contention that the average contributions, compounded, do not equal the benefits derived. As best as I can tell, that is true in my case.

    The idea that we “pay forward” is really nice if it weren’t for once inconvenient truth. Demographics don’t support it. At the macro level, the U.S. is barely at replacement birth rates. Most OEDC members are not. So there is no pyramid of workers ready and able to stand up and make the contributions needed to keep SS solvent.

    The SS plan is the least of our worries. Adjustments in COLA, starting age and removing caps will address many of the problems for now.

    As far as projecting mortality rates goes, using todays estimates for future mortality is actually looking in the rear view mirror. We are on the verge of incredible advances in healthspan, not just life span.

    Finally, if you look around, baby boomers are already taking their own steps to work beyond SS retirement ages. It is one of the reasons young people are struggling to find jobs.

    Reply
    1. Bill H1 year ago

      There are some people who have put in plenty & have earned social security. Personally I’ve been paying into the system for 36 years & I should not expect anything back? No I should be taking care of with money I’ve been paying all my life into Social Security. I was told this was retirement funds for when i could no longer work. Fact of the matter is its running out of money because of crooked politicians & the millions of illegals & people who live here that never worked that are collecting the money. Millions of hard working americans paid into the system thier whole lives & they deserve to be token care of instead of lazy people who don’t want to work & illegal people that politicians are letting into the country just to get votes!

      Reply
      1. Paul10 months ago

        Social Security benefits were never meant to be the sole source of income for a retiree, but one of the sources that could also include pensions and veteran’s benefits.
        “The Congressional Budget Office…puts the date at 2031 [for Social Security to become insolvent]. After that, while the system will still be receiving tax revenue, it will only be enough to pay about three-quarters of scheduled benefits — unless Congress changes the benefit formulas, raises the payroll tax, or makes other changes such as raising the cap on taxable wage income (currently $113,700).”

        This means that Social Security will have FULL benefits until at least 2031, after which time they will have sufficient funds to pay 3/4 of the total benefits that people have paid into the fund.

        Reply
      2. ann6 months ago

        NEVER vote Democrat… Oops.I mean for socialism…

        Reply
        1. 333 only 1/2 evil5 months ago

          You need more, perhaps Tom Paine the voice of the Revolution, Agrarian Justice or his 1st Common Sense???

          In my own words, the greater portion of wealth created by us the majority, the working class, must be kept in circulation. That is the function of taxes and spending by institutions of governance under this republic and in our names, e.g., social safety nets, infrastructure, etc. An expectation of 0% unemployment under a strictly private property structure is a pipe dream.

          The problem is that buying into anti-tax rhetoric and voting its proponents has never benefited workers only the <1%ers, corporate and real persons. Open your eyes to them paying little to no tax in some cases receiving refunds. On the other hand my wife and I were at an adjusted 23% marginal tax rate last year. Frankly, I'm proud to share my wealth (misnomer I know) we live well. We have revenue problem because of the <1%ers because we no longer tax them in proportion to their incomes, wealth and profits.

          Allow less than 1% of the society to amass and sequester over a third of annual wealth to their sole advantage and you have an anemic economy as much as would occur if you would permit a third of your blood to be removed and similarly used or as life would suffer if a third of the planets oxygen were similarly used, i.e., removed and sequestered to the sole advantage of a super minority

          Reply
        2. Chris5 months ago

          Or for Republickers!

          No matter how many times the Social Security Trust Fund and it’s benefits are explained to the Republic Party Moonbats, they still insist on repeating Fox News propaganda.

          Please use your brains, People.

          Reply
  23. dAn2 years ago

    There is NO money in the trust funds. It is just an accounting gimmick. Congress can at any time change the benefit formula and collection structure to anything they want. The 1983 increase in the SS tax percentage didn’t change the pay-as-you-go system. This said there is a MORAL obligation here which any politician can only avoid at their peril, as the system is so popular. Minor adjustments will be needed unless general tax revenue will be used (as recently became the case) in the future too. Biggest saving will come out of Defense spending going forward and unless something unforeseen happens both sides will have to acknowledge that.

    Reply
  24. Rose2 years ago

    I would like to know the results of the remedies that have been proposed. For instance, what would happen if there were no cap to the tax on earnings? What would be the likely result of privatizing? How much would the tax have to be raised to cover the projected costs. Until the facts and/or probabilities are laid out, it is impossible to make a sound decision.

    Reply
  25. melody stewart2 years ago

    It is interesting to me, that since I became a teacher in later life, that my social security benefit amount was dollar for dollar diminished by the amount of my teacher’s pension. This certainly does not make me want to spread the news about how rewarding teaching can be.

    Reply
  26. Ann Garton2 years ago

    Why do the press and the government keep referring to Medicare and Social Security as entitlement programs. They have been and are still being paid for by the individuals who are working and or have worked for the benefits. Also all seniors receiving Medicare benefits are paying a monthly premium of a $100.00 per month. That premium rate has been going up steadily since I became eligible for benefits in 2005. Entitlement programs are AFDC, SSI,HUD housing, Medicaid, free school breakfast and lunch and anything else the tax payers have to pay for those who do not pay taxes because they do not make enough income. Since you are a research org. You need to correct this information as the general public DOES NOT know the difference.

    Reply
    1. Rando2 years ago

      It is not an entitlement until you draw out more than you pay in.

      For instance; My neighbor probably paid into Medicare $40,000 dollars over the course of his career since he retired early and his employer contributed the same.

      My neighbor has had since he retired, more operations than Seal Team Six. He told me one operation totaled $60,000 dollars and another one amounted to $70,000.

      God only knows how much extra has been thrown into the mix since he’s on more medication than Michael Jackson in his afterlife. Maybe I should make that AFTERLIFE.

      God bless Social Security and Medicare. I can’t imagine where we would be without them.

      Reply
    2. Sean7 months ago

      A lie. housing subsidies are no more an entitlement than your Medicare., Yes, you paid, BUT most people who receive housing subsidies paid in as well. It just was not a separate line item on your paycheck

      Reply
  27. Fran2 years ago

    This was a very clarifying and concise summary of the SS situation. Probably More senior citizens need to be educated so that AARP doesn’t ramp up the anxieties of the elderly. Reform is necessary. Possibly a small reduction in benefits (2-3%) and a small raise in in the taxable wage cap (2-3%) might be helpful. Should the programs now offered be reassessed? Absolutely! Privatization would be a nightmare. Please take a poll on your summary points when this topic “heats up” and maybe the politicians will “hear” it.

    Reply
  28. Linwood2 years ago

    I wholeheartedly agree with Roy!

    Reply
  29. David2 years ago

    I would support increasing the cap. I do not want to see any reductions in benefits. One of the problems is that many of our citizens, still jobless and who have run out of unemployment are turning to Disability Insurance, guided by the lawyers and medical hacks. SSI is another drain as well. I’m not certain how many, who have not paid into the system, are drawing checks. I’ve never quite understood why the death of a parent sends the children to college, while the rest of America struggles. I don’t see how the cap can remain where it is. Privatization is definitely not the answer.

    Reply
    1. deb7 months ago

      Trust me, social security for minor dependents does not send them to college. My children s father died when they were ages two and four. The amount of money I received for them in a month was enough to pay daycare for a month and that was about it. It did not buy food, clothing, pay school fees, dr bills, dentist bills or pay for any other activities or things my children wanted to do. After daycare it did pay for braces because at the time braces were not paid for by insurance. It was considered cosmetic. Then paid for clothes, etc. But never did it pay for everything my child needed that had their father been alive and helping out would not have been a issue.

      Reply
  30. Roy2 years ago

    I say get rid of the cap. If I have to pay the tax on 100% of my income then those making more should too. This is just another case of something being built on the backs the poor.

    Reply
    1. Steve1 year ago

      Yes Roy but your tax bracket isn’t already at 35% roughly. Add an extra 6% that’s 41%. Let’s see you pay 41% of your income every month to State and Federal taxes and see how much you want to raise taxes.

      Reply
  31. rod2 years ago

    The greatest Ponzi scheme in history. Only the government could pull off this scam and get away with it.

    Reply
    1. Leslie2 years ago

      Old age income security and disability income security for my grandparents, my parents, and now me, is no “Ponzi scheme.”

      A “Ponzi scheme” entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Social Security does none of those things.

      Each generation in my family paid into a system that ensured (and insured) we would not spend our final years in poverty, die of starvation, or work until the moment of death. And it helped my brother who became disabled and died in middle age – after drawing only a tiny fraction of what he contributed. All tolled, none of my grandparents or parents received anything near the contributions they made to Social Security.

      Yes. I might collect more than I contributed, after just 7 years. Social Security says I may live (the average) of 15 years longer. There’s the problem. And the solution. Longer life – longer work life for many. More contributions.

      Taking the income cap off would do much to help, too.

      Reply
  32. Sara2 years ago

    If the cap on F.I.C.A. salary deductions is eliminated, Social Security would never have a funding problem.

    Reply
  33. Bob Cox2 years ago

    Just fix it!! Cap this. Means test that. Admit that the system is just plain screed up and not sustainable. We’ll maybe not because then you need to deal with reason and equity.

    As long as the goobers in Congress equate fixing anything with a tax increase, nothing is going to get fixed regardless of what the majority of us think about the issue. The extreme right wing is running the zoo because the rest of the (fill in the blank) are more worried about a Tea Party primary challenge than doing a credible job. Liberals are afraid to be Liberals and moderates are afraid of their own shadows, Sarah Palin, Ted Cruz, primary challenges, Glenn Beck, Rush and you name it. Democracy isn’t democracy when the operable premise is minority rule.

    I really wish the “media” and pew would stop throwing out gross research numbers about the percentage in favor or against something without the additional information about the particulars of the groups for and against. If the 17% against is Romney’s group, then the info seems to be somewhat spurious at best and at the very least casts the survey results in a different light.

    Can’t wait to see the new bipartisan budget negotiation committee crash and burn because fixing anything is a tax increase.

    Reply
    1. Bob1 year ago

      “Just fix it!” Totally agree. Why that doesn’t happen? Legislators are more worried about getting re-elected than serving the citizens. Term-limits is the solution to many if not most of our political impasses. As John Connally (late Texas governor) said almost 30 years ago. “Legislators should go to Washington, serve their country, then come back and live with the laws they made.”

      Reply
  34. Joe Adams2 years ago

    Cap on income should be TOTALLY removed.

    Reply
  35. Joe2 years ago

    The real “Entitlement” programs are those given to past and present members of congress. Social Security retirement benefits are the result of years of worker contributions. The problem with Social Security funding is due to congressional meddling. They should be included on the Social Security like the rest of us ordinary citizens.

    Reply
  36. Maria A. Sweet2 years ago

    The existing cap in contributions of Social Security System needs to be eliminated. It does not make sense.

    Reply
  37. @euonymous2 years ago

    “Unless”… one other option is to bring jobs back to the US. It seems to me we are long overdue for a Legislature and Administration who will make it less desirable economically to have US companies move and retain jobs overseas. We need to re-invigorate our manufacturing sector which provides employment and a certain degree of independence to our economy.

    Of course there’s always “Eat the Rich.” Just kidding. It’s getting close to dinnertime.

    Reply
    1. Dee5 months ago

      This is the problem & the solution in a nut shell… the return of JOBS to America.
      If the business that make their Millions & Billions in America would actually invest in the American economy instead of transferring our economic wealth overseas, we wouldn’t have the (unemployed, baby boomer, next generation, longer life expectancy) issues we are currently struggling with.
      More jobs means that more people are paying into the system of taxation that supports both social security & Medicare.
      Unfortunately, our “job creators” are only creating jobs – and building economies- for other countries. They are enjoying the American profits but not investing in the same country that has made them rich.

      Reply
  38. Daniel2 years ago

    It seems that raising the cap is the answer. I never did understand the reason for the cap. But this will watch out for accountants and tax lawyers to start developing ways around it. Like deferring income until they reach retirement or instead of income they will get some in stock options. The machinery to detect fraud must be diligent and funded in order to prevent, as much as possible, back door methods of avoidance. No one has mentioned the way that cola adjustments are figured to increase or stay stagnant. We need real figures not some arbitrary cherry picked numbers to.

    Reply
  39. frank2 years ago

    Social Security retirement benefits are tied to the contributions and contributions are a function of covered pay. The covered pay cap was removed for Medicare because there is no correlation between contributions and benefits. If the covered pay cap is removed for Social Security either of two things need to happen: i) The benefits for very highly paid people will increase significantly due to the increase of their contributions; ii) If the benefit no longer correlates to the contributions we all admit that the program is not a retirement program but in fact an intergenerational welfare program. There’s not enough courage in our political class to stand up and admit that Social Security is and has always been an intergenerational welfare program. If removing the pay cap was so easy the Social Security covered pay cap would have been removed when the cap was removed for Medicare.

    Reply
  40. PaulaK2 years ago

    Why do choose to use the term entitlement, even in parentheses? I’ve paid for both social security & medicare throughout my working life. This is an insurance policy not a gift.

    Reply
  41. Don2 years ago

    I have been representing disability claimants for 33 years. Nearly every claimant who is disabled by depression or back pain will have to appear before an administrative law judge, where the national average approval rate (for all illnesses and conditions) is 46%. And to be approved one must have qualifying medical records of diagnosis and treatment. Very difficult to commit fraud, certainly not to the tune of 50% of all claims.

    I did not see the 60 Minutes report. It sounds like they cherry-picked some statistics to make an alarmist TV show.

    Reply
  42. Timothy2 years ago

    There is a simple fix – (1) set up a separate fund – (2) call in all the IOU’s (3) have Social Security and Medicare contributions attached to all earned income – and (4) verify that all receiving distributions from the fund are eligible to receive the distribution.

    There is no accountability anywhere in our Federal government – $1 trillion has been distributed by the Treasury for three years (all funds were printed) but there is isn’t a clear record as where the money in excess of the faux budget went to.

    Reply
  43. Brenda Sue2 years ago

    The income limit on Social Security income distributions should be increased
    to double the present income limit to income of $226,000. This would help
    the Social Security fund to remain solvent for a longer period.

    Reply
  44. Benji2 years ago

    Why doesn’t congress raise the taxable wage income cap? Why are they delaying action now that will help millions in later years? Is it because the “rich” people are really the ones running this country and not ordinary middle income people, as they want us to believe.

    Reply
  45. Garry Herron2 years ago

    Is it possible that Social Security revenues could also be raised by extending its tax to cover other types of incomes, such as dividends, distributions and private equity earnings?

    Reply
  46. B. Beech2 years ago

    Until there is an agreement on how to fund Social Security programs I think the benefits should be frozen at current rate. Increasing benefits will only add to the debt problem on this entitlement program.
    Taxes should be collected on much higher level of income, up to $350,000 which be more rational. That would bring in much needed refinancing.

    Reply
  47. TJ2 years ago

    Eliminate the cap on salaries, yes, and do a means test for recipients – Social Security was meant to be insurance, not a pension plan. Retired folks getting income of $75,000 or more a year (from whatever/all sources) don’t need – and shouldn’t get – Social Security benefits. Make those two changes, there is no funding problem.

    Reply
  48. Micki2 years ago

    If some retired people opted out of receiving monthly Social Security payments in exchange for not having to pay income tax on pension income, does anyone out there know what effect this would have on the SS program? Right now my income taxes pretty much match my income from SS, nearly a wash and it puts me in a higher tax bracket.

    Reply
  49. Howard2 years ago

    Simply eliminate the cap on salaries altogether. It is time for the superrich to pay their fair share.

    Reply
    1. Elaine2 years ago

      Howard, if you had left off the last sentence, I would have thought you were being reasonable. Now, I suspect that you are part of the problem. I am in no way super rich, but I do not begrudge anyone who works hard enough to become super rich. I guess I was just brought up different.

      Reply
      1. Bald Eagle2 years ago

        It’s not about working hard. If it were, there would be a ton of men and women who really worked hard and a lot less among the very wealthy whose hardest work was managing their investments.

        Reply
        1. Dan2 years ago

          There would also be a ton of people who don’t deserve what they get. Plus I guess you never met an entrepreneur who built his fortune by taking a second mortgage on their home. Or who failed repeatedly only to persevere. Who created jobs for others.

          Another example of envy.

          Reply
    2. Rick2 years ago

      I agree with doing away with the salary cap but we also need to let high earners get higher SS payments. This is not a rich vs poor solution but will go a long way towards making SS solvent.

      Reply
  50. Brad Patterson2 years ago

    A simple fix would be to raise the payroll cap on Social Security.

    Reply
    1. Rick2 years ago

      Totally agree

      Reply
  51. Donald2 years ago

    Must change retirement age to reflect health of older retires,average age of death is now 85-90

    Reply
    1. Kris2 years ago

      Which companies are hiring 65 year old computer programers, 67 year old roofers and 66 year old nurses?

      Reply
      1. Barbara2 years ago

        Amen!

        Reply
      2. Deethorn2 years ago

        Actually, many – my over 65 years old boss, president of a non-profit – my over 74 years old Mother, a senior tax preparer at H&R Block – my 78 year old uncle, a property manager. All are working full-time, or as much as they want. In fields they love and are experts at. And they all intend to continue working for the forseeable future. My father-in-law worked as a minister until he was over 80. Yes, the retirement age must be raised. And not 6 months over 6 years. That will have virtually no impact.

        Reply
    2. Leslie2 years ago

      Donald, you make a big mistake in unstated assumptions.

      The average age of death in the United States in 2012 is 78.7 years of age – for someone BORN IN 2010.

      That’s the last year finalized data and calculations are available from the US Census Bureau. It uses all people, of all ages, across the US, all causes of death – including accidental at early ages.

      The older you get, the less likely the average age of death, in a given year, but only up to a certain age range, then it falls off sharply.

      It’s about 81 for women and 76 for men (all ages ranges counted, all population used, crude death rates of 2012 population estimates).

      Living longer or into an older age does NOT mean the population is healthier, or more able to work. It just means people live longer. That says nothing about HOW they live, work or die.

      A 93 year old with Alzheimer’s disease for the past 10 years would not make a good President, would he? That’s why Ronald Reagan left office at 78 years of age – our current average age of death.

      P.S. Most people who draw Social Security benefits still pay income taxes on some of that income.

      Reply
      1. Kathy h2 years ago

        Leslie: I think history will show that the reason why Ronald Reagan left office at 78 years of age was because he was term limited to two four-year terms.

        Reply
  52. denny powers2 years ago

    what happens to the benefits from people that pass away shortly after they start to draw from ssi

    Reply
    1. Leslie2 years ago

      frank’s link answers the question for a single monthly payment.

      You draw a monthly Social Security check in any month for the prior month’s benefit due you. The month anyone dies, their check is their’s or their heirs. Then Social Security stops. No check is issued the following month after the month when someone dies.

      All benefits for people who die, stop when they die. If they are married their spouse, or divorced, their qualified former spouse, or children who are of a certain age or disabled – THOSE benefits can continue, or start later in the survivor’s life.

      A spouse who has never worked – will never qualify for Social Security benefits of their own, can still draw Social Security as a widow/widower, or former spouse (divorced). The benefit is smaller and the group of individuals these benefits go to is quite small among all Social Security beneficiaries.

      Reply
      1. Cindy1 year ago

        I think that our government is not good at handling money or social security contributions. So much money contributions for so many years will be just gone in 2033? Any company’s insurance policies or annuity policies are much better than that. Baby boomers contributed a lot more money in the past. Now when that’s time for them to get benefits, the money just gone!!! That’s really unfair. In my opinion, better let people handle their own retirement plan. That will be much, much better. Our government is not competent in investing the contributed money entrusted to them, especially in this matter. If just increases tax or remove the cap, the money may meet the quota for a very short time, and will soon diminish in not too long futures. Why just remove the social security tax and let workers to use the money to do their own investing for retirement??

        Reply