Sunday, August 3, 2014

We need to reduce future Social Security benefits


Here's one of the reasons why we need to change Social Security benefits for future retirees:

Roughly 10,000 Baby Boomers now reach nominal retirement age (65) every day—this will keep happening for the next 15 years, until the youngest Baby Boomer reaches age 65 in 2029.

In the 1950s and 1960s and 1970s and even in the 1980s, no one in government or anywhere else ever thought that all these tens of millions of Baby Boomers would live long enough to collect Social Security benefits for years and years.

There isn’t enough money on the surface of the planet to pay all current working Americans a Social Security retirement check according to the current schedule of benefits.

We need to raise Social Security taxes—now—and reduce future payments to future retirees—now. Apologies to the young folks who are just entering the work force, and to those who are only mid-way through their work careers.

Historical note: in 1935, when the Social Security Act was signed by President Roosevelt, the government’s actuaries privately estimated that half of Americans wouldn’t live long enough to collect any benefits. The first monthly Social Security benefit check, for $22.54, was issued in January 1940. The recipient, Ida May Fuller, had paid a total of $24.75 in Social Security taxes during her working career, and before she died in 1975 she received $22,888.92 from the Social Security administration.

Here’s another aside: although it’s true that seniors are working longer (past age 65) than anyone ever guessed they would, still they’re going to retire sometime. Last year, for example, the Social Security Administration noted that “By 2015, almost 33 percent of our workforce, including 48 percent of our supervisors, will be eligible to retire. In FY [fiscal year] 2011, we lost over 4,000 employees due to retirement and other reasons. We expect this trend to continue. During this same time frame, the baby boomer retirement wave continues to have a significant effect on our workloads.”
  





No comments:

Post a Comment